Workplace Gender Equality
This blog discusses gender equality in the workplace and this years WGEA report on the Australian gender pay gap, from our podcast Season 2 Episode 2.
Let’s Create A Brighter Future for Gender Pay Equality
Beneath the commercialism of our society there is a complex and embedded issue of gender roles, particularly on display in the context of the workplace. This year The Workplace Gender Equality Agency released a report on the mandatory disclosure of gender roles and pay gaps in private enterprises with over 100 employees in Australia.
The Workplace Gender Equality Agency published the data publicly on 27 February 2024. They reported base salary and total remuneration median gender pay gaps, and revealed a stark reality: in Australia, women are paid 21.7% less than men on average. For every $1 a man makes, women earn 78 cents. It is the lowest gap there has ever been, but it also means there is a lot of work still ahead.
Over the course of a year, the difference in pay is $26,393. The report shows this disparity stems from several factors, including the concentration of women in lower-paid roles, part-time work, their underrepresentation in leadership positions, and the societal expectation that women bear the brunt of caregiving responsibilities, overall combining to reduce their earning capacity over their lifetime.
| 62% of median employer gender pay gaps are over 5% and in favour of men.
Female dominated industries such as education and healthcare are outliers, boasting lower gender pay gaps. However, even in these sectors, questions linger about the fairness of pay relative to the roles and responsibilities shouldered by women.
One of the key challenges we have noticed is the reluctance or inability of workplaces to offer flexible working arrangements, especially for men. This perpetuates the stereotype that caregiving is primarily a woman's responsibility, further entrenching gender inequality.
After a gender pay gap analysis, the most common actions employers have taken include:
57% Correcting like-for-like gaps in pay
51% Reviewing the renumeration decision-making process
48% Analysis of performance pay to ensure there is no gender bias
All this points to action and change for the better, but more can still and should still be done.
So what exactly did the WGEA report identify as the biggest contributors to the wage gap?
Conscious and unconscious discrimination and bias in hiring and pay decisions
Discrimination in the workplace can be both overt and subtle, with unconscious bias often playing a significant role in perpetuating gender inequalities. Conscious discrimination involves deliberate actions, such as offering lower salaries to women or passing them over for promotions. Unconscious bias, however, is more insidious, occurring when employers unintentionally favor male candidates over equally qualified women, often due to ingrained stereotypes about gender roles.
For instance, women might be perceived as less committed to their careers because of assumptions that they will prioritize family responsibilities over work. This bias can lead to women being offered lower starting salaries, fewer opportunities for advancement, or being overlooked for leadership roles. These biases accumulate over time, creating significant disparities in earnings and career progression between men and women.Women and men working in different industries and jobs, with female-dominated industries and jobs attracting lower wages
Gender segregation in the labor market is another factor contributing to the gender pay gap. Men and women tend to work in different industries and occupations, with women often concentrated in lower-paying sectors such as education, healthcare, and social services. These industries, traditionally seen as "female" domains, are often undervalued and underpaid compared to male-dominated fields like engineering, technology, and finance.
This segregation is partly due to societal norms and expectations that steer women toward certain careers and men toward others. The result is that even when women and men perform work of equal value, women are more likely to be in roles that pay less, contributing to a significant portion of the gender pay gap.Lack of workplace flexibility to accommodate caring and other responsibilities, especially in senior roles
Workplace flexibility is crucial for enabling employees to balance their professional and personal lives, especially for those with caregiving responsibilities. However, flexible work arrangements, such as part-time work, remote work, or flexible hours, are often less available in senior roles, which are more demanding and rigid in their structure.
For many women, the lack of flexibility in senior positions makes it challenging to advance their careers while managing caregiving responsibilities, such as raising children or caring for elderly relatives. This lack of flexibility can force women to choose between career progression and family responsibilities, leading to fewer women in leadership roles and contributing to the overall gender pay gap.High rates of part-time work for women
Part-time work is more common among women than men, often due to the need to balance work with caregiving duties. While part-time work provides flexibility, it typically comes with trade-offs, including lower hourly wages, fewer benefits, and limited opportunities for career advancement.
Women in part-time roles may also face biases that suggest they are less committed or capable, further limiting their chances for promotion or pay increases. Over time, the cumulative effect of part-time work can significantly reduce women’s lifetime earnings and hinder their ability to achieve financial security.Women’s greater time out of the workforce for caring responsibilities impacting career progression and opportunities
Women are more likely than men to take extended periods of time out of the workforce to care for children or other family members. While this time is crucial for family well-being, it can have long-term consequences for women’s careers. Career breaks can lead to skill depreciation, reduced networking opportunities, and missed chances for promotion.
When women return to work after a break, they may find themselves starting from a lower position or salary level than where they left off. This interruption in career progression can have a lasting impact on earning potential, retirement savings, and overall career satisfaction.Women’s disproportionate share of unpaid caring and domestic work
Women continue to bear a disproportionate share of unpaid caring and domestic work, such as childcare, eldercare, and household chores. This "second shift" often limits the time and energy women can devote to their careers, making it harder for them to compete for promotions, take on challenging projects, or invest in professional development.
This imbalance in unpaid labor not only affects women’s earnings and career progression but also reinforces traditional gender roles that perpetuate inequality. Addressing this issue requires both cultural change and supportive policies, such as accessible childcare, paid family leave, and incentives for shared domestic responsibilities.
Movement within parental leave
The data indicates positive trends on availability of paid parental leave. Of the 63% of employers offering some form of paid parental leave, 33% offer universally available paid parental leave – a 9 percentage point increase from last year. Universally available paid parental leave is leave offered equally to men and women, without using labels that define a carer’s role in the family unit as ‘primary’ or ‘secondary’.
Snapshot taken from the WGEA Website, July 2024
Whether you are young or old, if you’ve held employment you’ve probably got your own story when it comes to gender, bias, pay, and equality in the workplace.
With employees not so much encouraged to talk about how much their earn, but the ban in pay secrecy terms within employment contracts after June 7, 2023, conversations about wages are now able to be had – yet still taboo.
As employers, fair and equal pay is something that should be provided but when an employee does not have the confidence to ask for it, why should they pay them equal to their counterpart who does ask? How does this impact revenue and profit, and what is the impact of pay disparity when you’re running a small – medium business and don’t have the public reporting requirements of a 100+ private enterprise? These questions are valid. The most important thing to be considered is the kind of world are we cultivating, and whether we want our children to be treated that way and grow up.
Moving forward, we at The Money Collective advocate for a multifaceted approach to address the gender pay gap. This includes fostering open conversations at home and challenging traditional gender roles, as well as urging workplaces to implement policies that support gender equality and provide flexibility for all employees.
It is encouraging to note that 70% of Australian employers with over 100 employees who reported their data to the WGEA have a policy for equal renumeration, with various inclusions.
So, what more exactly do we want to see from employers in this area?
A shift to removing bias and discrimination from progression and promotion opportunities
Employers need to take proactive steps to ensure that progression and promotion opportunities are free from bias and discrimination. This involves implementing transparent and objective criteria for advancement, which are consistently applied across the organization. Regular training on unconscious bias for all employees, especially those involved in hiring and promotions, can help in recognizing and mitigating the impact of biases. Additionally, employers should establish clear pathways for career development that allow all employees, regardless of gender, to understand what is required for promotion. By doing so, companies can create a more equitable environment where women have an equal chance to advance in their careers.
Consideration ofsubconscious discrimination during pay and performance reviews
During pay and performance reviews, it’s essential for employers to be aware of and actively address subconscious discrimination. This can include implementing standardized evaluation processes to ensure consistency and fairness, as well as conducting regular audits to identify and correct any disparities in pay between men and women for similar roles. By making these processes more transparent and data-driven, companies can reduce the influence of biases, both conscious and unconscious. Employers should also provide training on how to conduct fair evaluations and offer tools that help managers assess performance based on objective criteria, rather than subjective impressions that could be influenced by stereotypes.
Lifting pay across female-dominated industries
Female-dominated industries often suffer from lower pay scales compared to male-dominated fields, even when the work requires similar levels of skill, education, and experience. Employers and industry leaders need to address this disparity by reassessing the value of work in these sectors and advocating for pay increases that reflect the true value of these roles. This might involve benchmarking salaries against similar positions in male-dominated industries and making adjustments to ensure equity. Governments and policymakers can also play a role by setting standards and encouraging wage increases in sectors like healthcare, education, and social services, where women are predominantly employed.
Increasing the number of women in leadership positions
Employers should prioritize the advancement of women into leadership roles by actively promoting gender diversity in their leadership pipelines. This can be achieved by identifying and developing female talent through mentorship programs, leadership training, and succession planning. Companies can also set targets or goals for gender representation in leadership positions, holding themselves accountable to these objectives. By creating a culture that supports and encourages women to take on leadership roles, employers can help to break the glass ceiling and pave the way for more women to ascend to executive positions. Additionally, having more women in leadership can inspire and mentor the next generation of female leaders.One key finding reported that employers with more women in key management roles are more likely to have a neutral gender pay gap.
WGEA Report, Employer Gender Pay Gaps Snapshot, 2024
Increasing the availability of flexible working arrangements to accommodate caregiving and other responsibilities
Flexible working arrangements are crucial for enabling employees, to balance work with caregiving responsibilities. Employers should expand the availability of options such as remote work, flexible hours, job sharing, and part-time roles at all levels of the organization, including senior positions. By doing so, companies can retain talented employees who might otherwise leave the workforce due to a lack of flexibility. Furthermore, promoting a culture that normalizes flexible work arrangements for all employees, regardless of gender, can help reduce the stigma that often surrounds these options. This approach not only supports employees with caregiving responsibilities but also contributes to higher job satisfaction and productivity across the board.
The link to financial wellbeing
Because financial wellbeing is impacted most by socio-economic conditions, it’s important for employers to play their part in providing a fair salary and working arrangements that encourage women to take on leadership roles and management positions. Likewise, to support re-entry to the workforce with mindful consideration of past performance and previous job title after a period of caregiving.
An ANZ report ‘Financial Wellbeing - Spotlight on Australian Women 2023’ uncovers that: Earning potential has a 7.5% impact on a persons overall financial wellbeing, and financial stability has a 5.2% influence.
Both of those key areas can be uplifted by employers who support gender pay equality in their workplace.
In conclusion
It’s not only on employers but on all individuals to examine their own biases and behaviours when it comes to gender bias and disparity. As employees we can speak up and raise concerns when we see them. As employers we can revisit policy and enact change.
The gender pay gap is reminder of our collective responsibility to strive for gender equality in every aspect of society, and that we must all be aware of and learning into the future challenges. Change is not only possible but inevitable when we commit to creating a more equitable and inclusive society for all.
See the full report and explore the interactive data here: https://www.wgea.gov.au/
Listen to the full podcast here: https://www.themoneycollective.com.au/podcast
This article provides general advice only. It does not take into account your objectives, financial situation or needs. Before acting on any information provided, you should consider the appropriateness of the information and the nature of the financial product in regards to your objectives, financial situation and needs. We recommend discussing your personal situation with a financial professional.
Blog article by:
MEL PEARCE
Financial Wellbeing Consultant and Co-Founder
The Money Collective