Women must work, on average, 50 more days per year to earn the same as men. Here’s what businesses need to do about it.
By Mary Wooldridge, WGEA CEO
August 19 marks Equal Pay Day. The 50 days into the new financial year that Australian women must work to earn the same, on average, as men did last year.
The date is based on Australian Bureau of Statistics data which shows that last year women earned, on average, 88¢ for every $1 men earned. This is the gender pay gap.
Over the past 50 days, the Workplace Gender Equality Agency has been running an Equal Pay Day campaign, themed It Doesn’t Add Up. During this campaign we called on employers to understand what the gender pay gap is and what causes it so that they can take effective action to end the gap in their workplace.
That starts with understanding the difference between equal pay and the gender pay gap. Equal pay is paying all people the same for equal or equivalent work. In Australia, this has been the law in Australia since 1969.
A gender pay gap occurs when more women are working in lower paid roles and more men are working in higher paid roles.
So, while August 19 has earned the moniker of Equal Pay Day what we are really talking about is a representation of the gender pay gap. Perhaps, when it came to settling on a name for this annual day that calls out workplace gender inequality, Gender Pay Gap Day just didn’t have the same ring to it.
You may notice the gender pay gap in your workplace when you see men dominating management or technical roles with higher salaries. This could be a sign that something is preventing women from accessing these roles. There are many drivers of the gender pay gap, including bias in recruitment processes or unequal access to promotions.
While it’s true the gender pay gap is in favour of women in some businesses, WGEA’s results show that two in three employers (62 per cent) have a gender pay gap more than 5 per cent and in favour of men. All employers should be aiming for a gender pay gap in a target range of plus or minus 5 per cent.
This isn’t about women needing to try harder or work more. That myth has been put to bed by many research studies. One of the most recent, by Harvard University, tracked men and women with sensors in an office and found that men and women did exactly the same amount of work and had the same access to management. But men were the ones that were more likely to be promoted.
Nor is it because women don’t apply for these roles. Employers we’ve worked with that identify recruitment of women as a challenge for their organisation often tell us that they found internal policies and practices were preventing women from applying.
For example, an employer who had only men applying to work in their factory took action by reviewing their recruitment procedures. They found asking the all-male-workforce to provide referrals for jobs led to male candidates applying. In addition, the job advertisement was written in such a way that it did not attract women to the role or allow for flexibility. Changing these practices resulted in more women applying and two years later applications for positions were 50 per cent women.
At a national level, the gender pay gap is also driven by industries with more men, such as construction and mining, paying more than industries with more women such as education and health care.
Recent steps by the federal government to increase pay rates for lower paid workforces made up predominantly of women, such as childcare and aged care, will help reduce the gender pay gap. So too will actions taken by the private sector, such as the construction industry, which is working to increase flexibility and enact cultural changes to encourage more women to work in the sector.
Sunlight the best disinfectant
WGEA published employer gender gaps for the first time this year and some employers took the option to provide context for their results by publishing an Employer Statement alongside their gaps.
Employers that claim they’ve addressed their gender pay gap because they pay women and men the same for doing the same work are doing the bare minimum. Eliminating unequal pay is just one piece of the puzzle.
Employers that are genuinely working to reduce their gender pay gap have done a gender pay gap analysis to identify what’s driving the pay and compensation differences in their workplace and have a gender equality action plan to address them.
Pressure to take action is widespread, both internally and externally. We have even heard from recruiters that prospective employees are asking about the gender pay gap in job interviews to help with their decision-making.
To attract and retain the best talent into the future, employers need to show they understand what their gender pay gap is, what is driving it, what options they have identified to take action and progress made on closing the gap.
The gender pay gap just does not add up and neither does women having to work an extra 50 days to earn, on average, what men earn in a year. Closing the gap is good for business, good for employees and good for our community as a whole.
This opinion article appeared in the Australian Financial Review on 18 August 2024.