Happy equal pay day! Or is it?

pay
Chloe Hava

By

written on September 1, 2017

Data shows that equal pay is still a long way off. Is inherent bias to blame? How can organisations work to close the gap?

As Australia marks equal pay day on 4th September, the stats are hardly a cause for celebration. The gap closed slightly from 2016 to 2017, reducing from 16.2 per cent to 15.3 per cent, however the Workplace Gender Equality Agency claims it could up to 50 years to eradicate the gap.

But at least will still collect the data. In the US, self- appointed champion of women’s rights Ivanka Trump recently supported the end of an Obama-era initiative requiring organisations to supply wage pay data which would quantify the gender pay gap.

Subtle, entrenched discrimination?

Back to home turf and the ever present question is why, for the past two decades, the gender pay gap in Australia has barely budged, oscillating between 15 and 19 per cent?

The reasons listed for the gender pay gap worldwide range from women having less work experience than men due to their being more likely to have caring commitments. Or the tendency for women to pursue careers that offer less competitive pay. Then there is the other old chestnut — women just don’t know how to cut a deal and bargain their way to a better wage. While some of these factors may play a part, is it the unconscious bias that is really keeping women down?

A timely study conducted by Motu Economic and Public Policy in New Zealand seems to say so. The study found that the wage disparity between men and women who are considered to be of equal value to an organisation is 16 per cent. Whats is more, the study demonstrates that as women progress in their careers, the pay gap becomes more evident, increasing to 20 per cent.

Lead researcher Isabelle Sin stated, “For both genders, productivity is higher for workers who have been at the firm for longer, but the wages of women with greater tenure are not commensurately higher. The gender wage-productivity gap does not go away once women have had the chance to demonstrate their worth to their employers.”

“To put it simply, our research suggests sexism is likely to be a major driver of the gender wage gap. What we’re going to do about it is another matter.”

How to close the gap?

Male Champions of Change, a group of CEOs committed to publicly challenging gender inequality, recently released an initiative titled Closing the Gender Gap. In this report, 122 signatories from organisations around the country have committed to bridging the pay gap. Data collection and analysis are fundamental to creating transparency around pay, says CEO of Lendlease Steve McCann. “Having regular, scrutinised and actioned reporting is a game-changer – real-time access to relevant data becomes hard to ignore and demands action,” he says.

Key takeaways from the report include:

  • Identifying what people are paid by looking at fixed pay, variable pay benefits and total remuneration.
  • When measuring the gap, conduct analysis through variable lenses: like by like, level per level, organisation–wide and wider market figures.
  • Take action through reviews (pay and performance), one off adjustments and budgetary allocations, and focussing on recruitment and retention of women.

Importantly, the report addresses the issue of complacency and explaining away the pay gap, which could be why it’s so slow to close. One listed bias, “I am paying her more than she got in her last role,” could be inherited and can be tackled by pricing the role as opposed to the person.

It appears that addressing these subtle biases is the best way forward.

For more tips on closing the gender gap, visit the AHRI Inclusion and Diversity Conferences in Canberra on 26 October and Melbourne on 2 November. Register online.

 

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