More than 5000 Australian employers will soon have their gender pay gap made public

The good news is that Australia’s total remuneration gender pay gap has dropped slightly, down 1.1 percentage points to a new low of 21.7%.

But the real story could be in what’s to come over the next year, especially with employers now scrambling to prepare for the day their individual gender pay gaps are published.

On that so far unspecified date – likely to occur in late February or early March – the individual median gender pay gaps of more than 5000 employers across Australia will be publicly accessible for everyone from current team members to clients, competitors and future talent to see.

The Workplace Gender Equality Agency (WEGA) has just released its annual analysis of data today, based on the results of their employer census, covering a massive 5.82 million Australian workers employed in businesses with 100 or more employees.

This year’s Gender Equality Scorecard 2022-23 shows that an annual pay difference of $26,393 remains between men and women in Australia, down by $1322 on the previous Gender Equality Scorecard.

Meanwhile, the representation of women on boards has stayed the same at 34%, while one in four boards has no women. The proportion of women CEOs has actually decreased slightly to 22% (down from 22.3%). As we noted in the early release of WGEA figures regarding the ‘part-time promotions cliff‘, just seven percent of all manager roles are being done part-time indicating a significant barrier for women in leadership, given that 58% of women work part-time or casually.

While WGEA has been analysing this data to present comprehensive gender pay and workforce gap trends across industries, publishing the employers-specific pay gap data will mark a significant transparency shift – meaning that employers can no longer hide behind industry-wide or even Australia-wide trends.

What they will be able to do is prepare a statement that can be published alongside their median gender pay gap and workforce compositions, offering an opportunity to state just what they are doing about the gap.

This is important, given that almost a third (30%) of employers don’t currently have any kind of strategy or policy in place for achieving remuneration. Even for employers with such a strategy or policy, only half (55%) have undertaken an analysis to understand what is driving their gender pay gaps.

WGEA CEO Mary Wooldridge spoke to the media, including Women’s Agenda, in the lead-up to the latest scorecard figures being made public.

Asked if workplaces are already making adjustments in preparation for their gender pay gap being published next year, she believes they have been making considerations based on the interest and engagement WGEA has seen from employers.

She said the focus of WGEA on supporting employers will be to support them on what they need to do to take action concerning the gender pay gap. “It’s up to them what that looks like, but we’ve provided some guidance already and people are engaging with that,” she said.

Wooldridge said information was provided to employers earlier this month regarding their gender pay gap, giving them time to analyse their gender pay gaps further, consider what’s driving their gaps, and start putting plans in action in advance of being able to publish an employer statement alongside their gender pay gap.

She cited evidence from the UK showing a decline in the gender pay gap when employer pay gaps are published, noting that transparency is powerful.

“It wasn’t a huge jump, but it reduced, and it’s been sustained over time,” she said. “So we’re not saying that it is [publishing pay gaps] is a silver bullet, but that is the next tool mechanism by which we continue to focus the minds of employers on the importance of embedding gender equality.”

She also highlighted the value of transparency in achieving change.

“Accountability and transparency are fundamental to both celebrating those who are doing well and challenging those who can do more. And I think year two is going to be really interesting as well because you’ll be able to look at progress against what was clear in the numbers but also what was said in the statements. What did they say they were going to do? Have they done it? And what has that translated to in terms of improvement?”

The total remuneration gender pay gap that WGEA has been calculating since 2014 is more comprehensive than the average weekly earnings calculated by the Australian Bureau of Statistics to determine the national gender pay gap. WGEA’s data covers all employees working full-time, part-time, and casually. Rather than calculating trends on base salary alone, the data includes all forms of remuneration, meaning bonuses are also considered. Bonuses make a significant difference because they tend to be associated with full-time work, and also with employers in more senior-level positions. The data does not currently include CEO pay, which will make a significant difference when this is factored in for the first time next year, given that 78% of CEOs are men.

Wooldridge said that it is “very encouraging” to see a drop in the gender pay gap this year, largely thanks to that increase in the proportion of women in senior management and manager roles, up one percentage point to 42% this year and allowing a corresponding increase in pay.

But she warned against taking the downward trend for granted or becoming complacent in believing the trajectory will merely continue. She also highlighted a number of key changes in the works at the agency, including the move to collect broader diversity data in the future.

“What we really need to do is interrogate while we still have these persistent gaps, and that needs to happen at the employer and industry and at the national level.

“It definitely needs purposeful action and targeting across the right things. We are seeing more women coming into leadership roles and management roles, and we are seeing some of those pay differentials being reduced. That’s a start. But it’s not the full solution, and we really need to recalibrate competition across jobs and levels.

Wooldridge highlighted a need to examine why leadership and management positions are synonymous with full-time work, and why part-time positions are synonymous with women and primary care. She also addressed the need to examine why so many jobs and occupations remain associated with one gender.

Positive actions WGEA has observed include the shift in relation to employers offering universal paid parental leave, where there is no distinction between men and women who receive it, nor ‘primary’ or ‘secondary’ labels applied.

However, this same positive shift also highlights where well-intentioned policies can come undone. Men are still not taking this leave anywhere close to equal numbers to women. As Wooldridge said, it demonstrates how a policy is a good start but, “the real hard work comes in changing the culture and the environment, addressing any stigma or underlying stereotypes that inhabit those policies being taken up and put into place”.

This article was first published by Women’s Agenda.