The Australian Government has published the Workplace Gender Equality Agency 2021 report, revealing the progress and red flags that demand immediate attention.
As per the report findings, the gender pay gap is at lowest in South Australia at 7% but at its highest in Western Australia at 21.9% with women on average earning $261.50 a week less than men, which equates to a 14.2% imbalance.
The biggest industry difference for gender pay gap was found in the professional, scientific and technical services industry at 25.3% while public administration and safety had the lowest pay gap differential at 7.3%.
“Addressing wage inequality in the workplace requires commitment and action,” Madeline Hill, General Manager, Diversity and Inclusion, Randstad Australia, said. “There needs to be comprehensive analysis of pay bands and job duties to assess any inequality that may exist and how pervasive it is within the organisation. Most importantly, this issue requires a proactive strategy to rectify the situation, including measurable outcomes and timeframes.”
In May 2021, the gender pay gap was 17.5% in the private sector and 10.8% in the public sector. Looking back at the last two decades, since 2001, the gender pay gap in the public sector has been lower than in the private sector. In early 2000s, the gender pay gap hovered between 16.6% and 22.1% in the private sector and between 10.5% and 13.5% in the public sector.
The Australian Government attributes the existing gender pay gap to multiple factors including:
- Discrimination and bias in hiring and pay decisions
- Women and men working in different industries and different jobs, with female-dominated industries and jobs attracting lower wages,
- Women’s disproportionate share of unpaid caring and domestic work
- Lack of workplace flexibility to accommodate caring and other responsibilities, especially in senior roles
- Women’s greater time out of the workforce impacting career progression and opportunities
Suggesting that deliberate long-term action is required to tackle this issue, Hill said, “Not many organisations have the means to address pay gaps all at once so one example of a long-term strategy is that a company might opt to put aside an annual budget to address the biggest gaps and then each year will take the company closer to removing that pay gap.
“It’s important that the cycle doesn’t perpetuate and that future hiring moves the organisation towards pay equality rather than compounding the issue; therefore, ongoing monitoring of the data is integral. However, it’s not just base salaries that need attention - bonuses and commissions are also part of the equation. Organisations should have very clear and transparent guides and formulas for what constitutes bonus payments. ‘Discretionary’ bonuses, with no defining criteria, are rarely a good idea.”
Highlighting the role of human resources to address wage and salary imbalance, Hill recommended providing advice and implementing policies in an array of areas.
“Human resources plays a critical role in addressing wage inequality - from communicating the business imperative to act on pay inequality issues to coordinating comprehensive reviews and guiding the business forward with informed strategies and initiatives to address any issues.”
While reaching absolute gender parity might still be years away, leaders need to act on narrowing the gap immediately by eliminating certain discrepancies in hiring, bonus and promotion decisions. A regular timey and measurable review of wage/salary imbalances is critical to even out the discrepancies.