What is the gender pay gap?
The gender pay gap in Australia refers to systemic inequities in the workforce, such as pay differences for equal work, unequal representation in leadership roles and barriers to high-paying industries. According to the Workplace Gender Equality Agency (WGEA), the current pay gap in Australia stands at 21.8%, indicating that women earn $0.78 for every dollar men make in comparable full-time roles. This gap is even wider in some industries, particularly male-dominated fields like technology and construction.
It is important to distinguish between equal pay and the gender pay gap. Equal pay refers to paying men and women the same for the same work. The gender pay gap, however, also encompasses broader systemic issues such as occupational segregation, differences in opportunities and biases in hiring and promotion practices.
Related: Pay transparency: Australia closes the pay gap – considerations and opportunities for employers
Historical context and current data
Australia has made progress in addressing gender-based wage inequality, but working towards full parity is an ongoing process. Historical data indicates that women have consistently earned less than men since entering the workforce in significant numbers during the 20th century. Although societal attitudes have shifted and some remedial legislation has been introduced, prevailing practices and structural challenges still perpetuate these disparities.
Reports from the Workplace Gender Equality Agency Australia (WGEA) show that women are underrepresented in high-paying roles and industries and overrepresented in lower-paying sectors like aged care, education and hospitality. For example, according to WGEA gender pay gap data, fewer women hold leadership roles in male-dominated industries, and the so-called glass ceiling remains a widespread barrier.
Importantly, the consequences of this inequality extend beyond individuals. Employers failing to address gender pay disparities risk losing highly qualified staff, damaging their reputation and, ultimately, facing reduced productivity within their organisations.
Related: Complete Guide to Being an Equal Opportunities Employer
Why diversity and inclusion matters
Diversity and inclusion play a critical role in addressing the gender pay gap by fostering a workplace culture where all employees, regardless of gender, have equal opportunities to thrive. Companies prioritising these values typically experience reduced pay disparities as they are more likely to implement equitable hiring, promotion and pay practices.
What’s more, promoting workplace diversity provides access to a broader range of perspectives and ideas in addition to supporting innovation and collaboration, while inclusion fosters an environment where all employees feel valued and fairly compensated. By incorporating diversity and inclusion initiatives into their workplace policies, organisations can tackle the gender pay gap and improve employee well-being and overall performance.
Related: Employer’s Guide to Hiring for Diversity and Inclusion
What are the legal obligations of employers?
Regarding the gender pay gap in Australia in 2024, employers are subject to legal requirements that promote gender equality in the workplace. The Workplace Gender Equality Act 2012 mandates that non-public sector employers with 100 or more employees report annually on six gender equality indicators, including remuneration. Failure to comply can result in penalties and exclusion from future government tendering opportunities.
Furthermore, the Fair Work Act 2009 contains provisions to ensure equal remuneration for work of equal or comparable value, further strengthening the legal framework for pay equity.
Read more: Building A Gender-Inclusive and Balanced Workplace
10 strategies to close the gender pay gap
The following are ten actionable strategies employers can take to close the gender pay gap in their organisations:
1) Conducting a comprehensive pay audit
Ideally, organisations begin by analysing pay data across roles, departments and levels to identify potential disparities. This process will highlight areas requiring immediate attention and ensure transparency. For example, if women in similar roles earn less than men, this is a clear area that needs prompt correction.
2) Implementing transparent pay structures
Establishing clear, standardised pay bands for each role can help to eliminate subjectivity. Transparency ensures that employees know how pay decisions are made, which fosters trust in the organisation’s practices. For instance, some Australian organisations now publish their salary bands to ensure fairness and consistency in their compensation decisions.
3) Reviewing recruitment and promotion practices
Biases in hiring and promotion decisions can contribute to ongoing pay disparities. Organisations need to review their recruitment processes to ensure equal opportunities for all candidates. This could include using diverse hiring panels, implementing blind resume screening and setting clear, measurable promotion criteria. In addition, leadership pathways need to be equally accessible to women.
4) Fostering flexible work arrangements
Flexible working arrangements are essential for promoting gender equality, particularly as women are disproportionately assuming caregiving responsibilities. Providing options for remote work, flexible hours and job-sharing can help retain talented female employees who might otherwise leave the workforce.
5) Investing in leadership development programs
Women often still face barriers to advancing into leadership roles. By creating mentorship and sponsorship programs specifically for women, organisations can help break down these barriers. Targeted leadership training can also help prepare women for senior roles and create a more balanced talent pool for future promotions.
6) Regularly monitoring pay equity
Addressing the gender pay gap is not a one-time task. Rather, companies need to commit to regular reviews of pay data to ensure fairness on an ongoing basis. These reviews need to assess whether progress is being made and whether additional measures are being taken to address remaining disparities. Moreover, such monitoring can also uncover new challenges like emerging trends in hiring or promotion practices that inadvertently disadvantage women.
7) Teaming up with industry bodies
Working with organisations like WGEA can provide employers with valuable resources and insights for addressing pay inequities. Many industry associations also offer tools and guidelines tailored to specific sectors to help employers navigate the sometimes complex challenges in this area.
8) Promoting open dialogue
Creating a workplace culture where employees feel comfortable discussing pay equity is key. Open dialogue can help identify issues early and build trust between employees and management. For instance, holding regular forums to discuss workplace equality initiatives can promote engagement and give employees opportunities to share their experiences, insights or concerns.
9) Setting clear diversity and inclusion goals
Defining measurable objectives related to diversity and inclusion demonstrates a commitment to change. These goals need to be integrated into the organisation’s broader strategic plans and regularly reviewed to evaluate progress. Concrete steps like setting targets for female representation in leadership positions are a practical way to work towards achieving gender balance.
10) Offering unconscious bias training
Educating employees and management about unconscious biases can help reduce their impact on decision-making processes. Tailored training programs can raise awareness and give staff practical tools to recognise and address biases, supporting fairer hiring, promotion and salary decisions. By raising awareness, unconscious bias training can, therefore, help create a more equitable workplace where decisions are based on merit rather than unconsciously held stereotypes.
Related: June 2024 AU Wages: Past Their Peak
Closing the gender pay gap is not just a legal obligation, but a strategic decision that benefits organisations and employees alike. By adopting the above strategies, businesses can foster equity, improve employee satisfaction and build stronger, more inclusive workplaces.
