Here’s a shocker: Male managers out-earn their female counterparts by $100,000 per year, says a new study by the Workplace Gender Equality Agency (WGEA), in collaboration with Bankwest Curtin Economic Centre (BCEC).
The study pulled numbers from more than 12,000 employers and four million employees (or 40 per cent of the Australian workforce) to uncover details about the gender gap, wages and job status for management-level employees. For the first time, data was collected not just from full-time employees, but part-time and casual employees as well. This makes it the first of its kind anywhere in the world, says lead researcher Rebecca Cassells.
That glaring $100,000 difference takes into account take-home pay, superannuation, bonuses and other forms of compensation. All wages were standardised and converted to full-time rates for equal comparison.
The study also found that earnings shortfalls can follow women throughout their careers. If women and men move through managerial positions at the same pace, working full-time and reaching a key management personnel role (KMP) in their 10th year, men end up earning $2.3 million base salary compared to $1.7 million for women. Even if women move up the line twice as fast, there is still a wage difference to the tune of $100,000.
Another big find is that part-time and casual pay rates inflate the gender pay gap. When these groups are factored in, the gap rises to 23.1 per cent for salaries and 27.5 per cent for total remuneration. The gap falls to 19 per cent for base salary and 23.9 per cent for total remuneration when only full-time wages are considered. This statistic is especially significant, as the majority of part-time and casual workers are women.
However, not all pay gaps favour men. Cassells and her team found that women managers fared better in male-dominated industries. The same can’t be said for female-dominated industries, though, and Cassells speculates this is because male workers are at a premium and can therefore command higher wages.
“Gender pay gaps need to be taken seriously, as they represent compromised economic security for women,” Cassells says. “It impacts accumulated wealth, and shows biases within workplaces that deny women equal opportunities.”
One reason that’s often trotted out is that gender pay gaps don’t result from discrimination, but rather the choices women make that hold them back – lack of ambition, having a family, etc. A study from Hays found that men and women are equally ambitious: 43 per cent of women and 44 per cent of men surveyed have C-suite ambitions. But another survey from Robert Half found that 55 per cent of Australian HR managers agree that women aren’t moving up the ranks on par with their male colleagues.
What are the solutions? Issues such as extreme gender disparities don’t disappear overnight, but there are steps businesses can take to close the gender gap. Conducting a complete audit of wages to find where differences occur is a great first step, says WGEA director Libby Lyons. “I urge all employers to look closely at their own pay data and recruitment strategies to uncover and address the gender gap,” she says. Cassells points to the UK, where company pay data must be publicly disclosed, as a great example of how pay reporting should be handled.
Offering employees more flexibility is another way to show support for female – and in some cases male – employees who take on primary childcare responsibilities.
“The future for every business needs to be in offering flexibility. You get this right and you can attract a diverse workforce to ensure you are ahead of the game,” says Jessica May, CEO of Enabled Employment. May was one of 300 Telstra Business Women Awards alumni surveyed ahead of International Women’s Day 2016 about how business can reach gender parity. The survey found 96 per cent of respondents were taking action to improve gender equality in their workplace, including flexible work arrangements, mentoring programs and targets for women in leadership positions.
“This includes not only women, but carers, the ageing population and people with a disability. We live in a digitally connected age. There’s no reason, apart from attitude, that employers aren’t embracing flexible work conditions,” May says.
Just as important is raising awareness. The same Hays report found that 91 per cent of men think there is no gender gap within their organisation, but only 51 per cent of women feel they have the opportunity to promote themselves and communicate their ambitions in the workplace.
Having female role-models is critical to narrowing the gender gap as well, according to the WGEA study. Cassells says that equal representation by women on boards is linked to positive diversity outcomes across an organisation; increasing the share of women on boards from zero to 50/50 results in a 6.3 per cent reduction in pay gaps for full-time managers and 7.8 per cent reduction for part-time managers.
In 2015, the World Economic Forum predicted that at the current pace of progress, it will take 118 years to close the gender gap unless there is fundamental change. “Awareness is growing in Australia and around the globe that gender equality is important for economic success,” Lyons says. “Diverse and inclusive workplaces encourage participation, which in turn drives productivity.”