Gender pay gaps have been published. Where does this leave you?

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The Workplace Gender Equality Agency has published gender pay gaps for private sector employers. Here’s what HR leaders need to be prepared for to navigate this new environment

UNTIL NOW, gender pay gap data in Australia has been collected but kept under wraps. However, on 27 February that changed. The Workplace Gender Equality Agency (WGEA) now publishes data on gender pay gaps for all private sector employers with 100-plus employees, along with each company’s proportion of female employees and average total remuneration per pay quartile. The move has been described as “game changing” and marks the start of a new era of salary transparency. So, how should HR leaders navigate this daunting new environment? According to Natalie Flynn, founder of gender equity platform Equidi, there is a lot to consider – from fielding questions from current and prospective employees, through to public reputation. Preparedness is key, as is a genuine commitment to taking positive steps to close the pay gap.

Equidi's vision is to create a more equitable and inclusive future for everyone, one business at a time. Its data-driven platform allows you to compare pay gaps and representation across every part of your business, and to track your progress towards levelling the ledger on gender in real time. Its platform is designed to make gender equity achievable and actionable for all businesses, giving your company a competitive edge.

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“Existing employees may start asking questions, and prospective employees will be able to see if there’s a values alignment between what the company says it’s doing on gender equity progress and what its metrics actually say”

Natalie Flynn, Equidi

Although the gender pay gap has seen some improvement in recent years, Australia’s figure currently sits at 21.7%, well above the OECD average of 11.9%. The World Economic Forum estimates that it’ll take 131 years to fully close the gender pay gap – a stark number and one that indicates a painfully slow rate of progress. The upcoming move to publish gender pay gaps in Australia is based on a similar policy implemented in the UK in 2017, which has seen the UK’s pay gap reduced continually year-on-year. According to Flynn, the publication of this data will be a “seismic shift” for HR leaders who have never had to deal with this level of transparency before. “Existing employees may start asking questions if their salary is below the average, and prospective employees will be able to see if there’s a values alignment between what the company says it’s doing on gender equity progress and what its metrics actually say,” Flynn tells HRD.

“Shareholders, customers and partners will also be able to see this data, so if they want to look at your gender diversity progress, that’ll be very evident. It’ll impact recruitment and talent, and HR teams need to be prepared to field a lot of questions that they haven’t had to in the past.” According to Flynn, preparedness is currently at “a mix” of levels, and many companies simply aren’t aware of the extent of the reporting that will take place. She notes that there are a lot of dynamics to think about, one of which is how your board will handle the information and how they’ll manage the potential reputational risk.

Companies listed on the ASX will need to consider how to approach the data with stakeholders. And most importantly, you’ll need to prepare the people on the frontlines – from your HR business partners to your recruiters. “Even in HR, not everyone is an expert on the gender pay gap and all of the elements that need to be considered,” Flynn says. “If an organisation is posting a 30–40% pay gap, they’ll need to think about what the response of their key partners will be around that.” While this is a new environment for everyone, Flynn says the companies that will do the best are the ones that understand and acknowledge their data and chart a clear path forward. “When reporting rolls around again next year, it’ll be even more important to show that you took meaningful action,” she says. “So, if you look at your numbers today and they aren’t what you hoped, what can you do about it?”

The goal of gender pay gap reporting is clear: to reduce the gap and promote gender equity. But according to Flynn, organisations need to shift their focus from ‘fixing’ the gap to preventing it from happening in the first place. She notes that the pay gap usually begins at key decision-making points. These include at the point of hire, at the time of a promotion or salary adjustment, or at an exit from the business. There’s normally a human element in each of these decision points, so what steps can you put in place to prevent a gender pay gap from happening? “You can use data to make the right decisions, which helps a lot with unconscious bias,” Flynn explains.

“The gender pay gap usually starts at key decision-making points such as hiring, promotion or salary adjustments. There could be an anchoring bias as a result of asking prospective hires about their current salary”

Natalie Flynn, Equidi

“The gender pay gap can start at the point of hire, and there’s been a lot of talk about salary transparency in job ads from what we’ve seen in the USA. There could be an anchoring bias as a result of asking prospective hires about their current salary. We don’t need to ask that any more – instead, you should understand your remuneration strategy and stay true to that. This leads to much better decisions at point of hire.” Flynn notes that when it comes to the pay gap, the devil is in the detail. An ‘unadjusted’ pay gap won’t account for root causes, but when you look at detailed and specific pay gaps, that might begin to tell a story. Is your pay gap caused by an underrepresentation of women in certain roles or departments? Once you dig into the data and get a more granular view of what’s happening, you can use that to inform your strategy. “This can’t just be a once-a-year activity,” Flynn adds. “The data evolves all the time – every day in a business you have people coming in, moving around and going out, and so you need to understand your data in real time. I think that’s the key to solving the gender pay gap.”

Flynn's experience of the gender pay gap started when she reached the C-suite. After spending her career in HR, she reached the senior level – and found that her pay was roughly half of the benchmark for what the role should have been paying and substantially lower than that of her male peer group. “When I went to the CEO with the data, he was horrified and fixed it straight away, but he couldn’t change what he couldn’t see. I had a fantastic career with that business,” Flynn recalls. “But it made me realise how difficult it is for executives and leaders to understand data in real time, and to see the impact of the daily decisions that they make.” With this in mind, Flynn went on to found Equidi – a platform that provides in-depth analysis of the gender pay gap in your organisation, information on high-risk roles and departments, as well as actionable steps to take in closing the gap.

Analysing Australia’s gender pay gap

Prevention is better than cure

Published 18 Mar 2024

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gender pay gap in Australia

21.7%

is the current gender pay gap

of CEOs in Australia are women

22%

of manager roles are part-time

Source: Workplace Gender Equality Agency

Freeing up HR to focus on what matters

Flynn notes that one of HR’s biggest pain points in this space is the sheer amount of data they have to analyse, so taking this off HR’s plate allows leaders to focus on actions and strategy. “I found out how difficult it was to complete the Workplace Gender Equality reporting that you need to do once a year,” Flynn says. “It was such a manual process because you have to provide all of your remuneration data and people movements across the whole business, and by the end of the report submission you’d think that your work in the gender space was done for another year, but it was really just the beginning.

Source: Workplace Gender Equality Agency

of board members are women

34%

of boards have a gender balance

25%

boards have no women

1 in 4

Women at board level nationally

“Part of our platform is about automating those processes so that companies can spend time actually making progress on gender equity.” To find out more about Equidi and how it can help you to close the gender pay gap in your organisation, click here.

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Natalie Flynn, Equidi