Late August every year, Australia “celebrates” Equal Pay Day. This day marks the approximately 60 days after the end of the financial year that the gender pay gap exists.
According to the Australian Bureau of Statistics (ABS), the gender pay gap has remained fairly stable at 13.4%; this means the average woman earns $12,594 pa less than the average man!
Does the gap disappear when women break through the glass ceiling?
Unfortunately the gap for senior women is even bigger than the 13.4%.
Research at UniSA shows that even female executives experience a pay gap; the average pay for executive women is 80.7% of the average pay earned by male executives – a gap of 19.3% and 5.9% greater than the average across the whole population, according to the Workplace Gender Equality Agency (WGEA).
Some of this gap is due to individual factors such as role and tenure, and organisational factors such as size and industry. But even after taking these factors into account, we find a gap of 15.1% — and that’s still higher than the overall gap calculated by the WGEA.
What’s so important about a gender pay gap?
The gender pay gap has negative implications for both individuals and organisations.
Imagine being paid less because of a demographic characteristic that has no bearing on your knowledge, abilities or skills. Well, this is a reality for women, one that has serious long-term consequences.
The gender pay gap begins at graduation and widens over time.
One outcome of this gap is women retire with half the superannuation compared to men – 40% of single retired women live in poverty and 44% of women with a partner must rely on their partner’s income to support their retirement.
There is a clear business case for diversity and women’s remuneration should reflect the value they bring to organisations.
Women bring new ideas and perspectives; challenge the status quo so that decision making improves; are important for serving female customers; and are generally more risk averse than men.
These characteristics contribute to improved organisational outcomes through diversity.
Organisations that underpay women risk demotivating them, which has negative implications for productivity and organisational performance.
When this underpayment is at executive level, female executives may not provide as much input to strategic direction and decisions compared to executive groups where pay is equal.
What can YOU do about it?
What does the organisation’s executive group look like? What about the board? Is there female representation at these senior levels? We know that organisations with gender diversity on their boards have smaller pay gaps than male dominated boards. And having a woman on the compensation committee narrows the gap too.
Do some benchmarking
The gender pay gap varies across location, industry, sector age and occupation. You can check these variables in the WGEA site, or more broadly in the Financy Women’s Index quarterly reports, to see if you’re likely to have a gender pay gap in your organisation. If you have a good relationship with your HR manager, ask them if new graduates are paid equally. As mentioned previously, the gender pay gap begins at the first stages of the career ladder.
Talk to your HR department
Ask your HR manager if the organisation has conducted a pay audit. There is less than a 50% chance that your organisation has conducted a pay audit to identify any wage gaps. To get started, organisations can use a gender pay gap calculator provided on the WGEA website. The WGEA also provides a wide range of fact sheets and guides to help organisations address pay inequity.
Report your results to those who can effect change
Only 26.7% of organisations report results from pay gap analyses to senior management. Why not ask if senior management have been advised about pay audit analyses undertaken within the organisation? If you’re in a senior role yourself, ask for information on gender and pay.
We still have some way to go to remove this gap between women’s and men’s pay. But, as we’ve highlighted, there are actions that individuals can take to raise awareness of the issue of gender pay gaps and to provide resources for organisations (and HR departments in particular) to calculate whether a pay gap exists and what to do about it.