Businesses with strong, long-term pay equity policies in place tend to be more advanced and more successful in improving gender equality and closing the gender pay gap, new research has found.
The Workplace Gender Equality Agency (WGEA) and the Bankwest Curtin Economics Centre (BCEC) released their eighth report in the Gender Equity Insights research series on Thursday, spotlighting the role of gender pay parity approaches in how well a business performs within industry sectors.
Collecting data from WGEA from 2019-2022 across 4,800 Australian employers and their gender equality strategies, the researchers found the leading 25 per cent of Australian businesses in gender equality reduced gender pay gaps by 5.3 percentage points over three years.
Report co-author and BCEC Director Professor Alan Duncan said while we are progressing in the gender equality space, Australian businesses are still many years off closing the gender pay gap.
“Crucially, the report provides a roadmap to organisations to support continuous improvement towards gender equality within their workplaces and, in doing so, ensure we do not derail the progress of women’s economic equality in Australia,” Professor Duncan said.
The report exposed a significant divide between the best and worst performing businesses in improving gender equality within certain industry sectors, including: mining, manufacturing, retail trade and professional, scientific and technical services.
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Professor Duncan said WGEA and BCEC’s latest report is important in highlighting the gaps within and between businesses, rather than approaching gender equality more broadly within industries.
“Focusing on industry-wide changes to gender pay equality and women’s workforce representation can hide some significant differences in progress between businesses,” he said.
“For example, the most advanced businesses in the mining sector are seven times more likely to set targets to reduce gender pay gaps and four times more likely to report pay equity metrics to senior executives compared to businesses that are early on in their journey towards workplace gender equity.”
How do businesses improve gender equity in the workplace?
The gender equity policies and approaches that the report found were the most effective involved conducting regular pay equity audits and reporting gender pay metrics to senior leadership and governing boards.
“The best performing businesses also have enhanced parental leave provision for secondary as well as primary carers, as well as reporting, training, and accountability for flexible work,” Professor Duncan said.
Mary Wooldridge, the CEO of WGEA, said the way to accelerate change in gender equity within workplaces can be achieved by implementing the recommended strategies.
“Employers who do more, achieve more,” Wooldridge said.
“This analysis shows that when employers pursue a deliberate strategy of long-term, meaningful change they are achieving progress to close their gender pay gaps.
On March 30 this year, the Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Bill 2023 was passed in Parliament. From early 2024, under these new changes, WGEA will publish employer gender pay gaps from all Australian employers with 100 or more employees.
Wooldridge said these legislative reforms will incentivise employers and businesses to implement strategies such as the ones suggested in their latest report with BCEC in order to fast track gender equity in the workplace.
“International experience indicates publishing the individual gender pay gap results of companies is an important step that can accelerate change,” she said.
“Industry averages can mask the true picture of progress. Publishing employer gender pay gaps offers a deeper insight into industry performance and business performance that may have been hidden by averages in the past.
“This new roadmap can help companies look at their policies and develop actions to better inform their own pathway for improvement.”
Women in managerial roles
WGEA and BCEC’s report also spotlighted problems of representation of women in high-paying or managerial positions within an organisation. Notably, the report found women are significantly under-represented among the top 20 per cent of earners in most industry sectors.
While it is important to tackle the representation issue for women in senior roles, co-author of the report Associate Professor Astghiok Mavisakalyan said leaders of businesses should aim to achieve gender equality in all levels of the organisation.
“Businesses should plan for continual improvements, enhanced actions and higher standards of practice in gender equality policies as internal and external expectations develop,” Associate Professor Mavisakalyan said.
“Business leaders need to be careful not to focus attention on one employee group at the expense of others. For example, a commitment to progress gender equality for managers and executives should not diminish the attention given to improving gender equality outcomes among non-managerial occupations.”
“Gender diversity in decision-making and on Boards is a key driver of organisational change. While there’s been progress in the past three years, employers must keep up the pace to avoid leaving women under- represented in the boardroom for decades to come.”