The Indigenous employment gap is actually widening

Mikaela Dery


written on January 12, 2018

Can quotas and constitutional reform help? And what do organisations need to do to ensure these initiatives are successful?

A recent government report shows that the Close the Gap framework, an initiative aimed at reducing the disparity between Indigenous Australians and their non-Indigenous counterparts in the workforce, is yet again going to fall woefully short of its targets. In fact, it looks like the gap is widening.

Some researchers have suggested that the program has been unsuccessful due to a lack of clarity, and a failure to meaningfully involve members of the Indigenous community in the conversation.

Close the Gap, which was created in 2008, was a response to the startling disparity between Indigenous and non-Indigenous Australians across many areas, particularly representation in the workplace. At the time, Indigenous Australians had an employment rate of 53.8 per cent. According to the report, that number fell to 48.4 per cent in 2014-15. While it’s true that rates of employment of non-Indigenous Australians also dropped from 75 per cent to 72.6 per cent in the same period, the numbers show that the employment gap itself has not experienced significant change.

What can organisations do?

Australian National University researchers Francis Markham and Nicholas Biddie called for a “radical rethink” of the scheme in a recent article in the Conversation.

“If statistical gaps are to be closed, structural inequalities must be tackled, such as through constitutional reform to create a representative Indigenous voice to parliament,” says Markham and Biddie.  

In the absence of a reliable government framework, organisations can look to overseas examples for ways to contribute to the creation of a more equitable workforce in Australia.

A notable example is Norway’s gender diversity program, which has dramatically increased female representation in the workforce, and has lead to a deeper cultural shift. The law, which was passed in 2008, required publicly owned companies and private sector publicly listed organisations to have a 40 per cent female board representation.

Initially controversial, the scheme ultimately led to greater diversity across the board, including within companies that were not legally required to implement the quotas. Furthermore, in a 2015 study done by the Harvard Business Review, researchers found that the impact of quotas in Norway was not only beneficial for diversity, but for board selection process more generally.

“We found that the imposition of quotas and goals has resulted not just in greater gender diversity, but to a more professional and formal approach to board selection,” says researchers Margarethe Wiersema and Marie Louise Mors.

A former Norwegian male CEO elaborated on this point.

“In my opinion, what happened in Norway when affirmative action was introduced was that the entire recruitment process of boards was sharpened,” he says.

While women in Norway don’t experience the same level of inequality that Indigenous Australians do, the structured nature of the program has had long-term benefits for organisations and employees.

Are quotas enough?

For quotas to really be effective in an organisation, it depends how employees feel about them, says University of Melbourne researcher Edwin Ip. He surveyed over 1,000 people in the US and asked them how they felt about senior leadership roles being reserved for women, without providing any context. Approximately half disagreed with the prospect. But it was explained that there was a hiring bias against women, 70 per cent were in agreement with the quota.

We found that whether gender quotas are good or bad for an organisation’s performance is reflected in these attitudes towards gender quotas,” says Ip. “If they are applied in industries where discrimination against women is thought not to be a problem, then the organisation’s performance can deteriorate significantly.”

According to Ip, perceived bias is the key to successfully implementing quotas.

“If your organisation wants to impose gender quotas then they should first educate their employees about whether any gender skill gap in the field is actually justified in the first place, and whether there is gender discrimination in the sector,” he says. “Otherwise, without this understanding, implementing gender quotas could backfire.”

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One thought on “The Indigenous employment gap is actually widening

  1. Setting a target by itself isn’t enough. Organisations need to ensure that the organisation is a culturally appropriate workplace. Partnering with Reconciliation Australia to develop a Reconciliation Action Plan is a good way to start.

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