I’m often asked about the reality of the gender pay gap in organisations – people always seemed shocked that these gaps occur and question whether they are gender related.
So here’s the first thing I always say – it’s great to ask questions about gender pay gaps and be open to a discussion.
The kinds of questions usually asked are
- Aren’t the pay gaps just related to women who work part-time?
- How can it be commercial for small businesses to address gender pay gaps?
- Aren’t pay gaps just about the national average, which is more about participation in the workforce?
- How do I know if my business has gaps?
- What can I do if I find any gaps?
These questions are totally understandable because what we often hear reported in the media is the national gender pay gap – which can be harder for individuals to then understand how gender gaps may relate to their own role and organisation.
For you to take action, focus on organisational gender pay gaps
For individuals to feel they can take meaningful action on pay gaps within their organisation, it is more useful to focus on the three types of gaps that typically arise in organisations:
- Organisation-wide gender pay gap
- By-level gender pay gaps
- Like-for-like gender pay gaps
The strategies to address each of these types of pay gaps are different and I’m going to focus on how best to address like-for-like gender pay gaps (same job, same performance rating, different pay) – as these are the gaps that are primarily related to conscious and unconscious gender bias in recruitment, promotion, pay and performance decisions.
Identifying like-for-like gender pay gaps – they are real
Like-for-like gaps are pay gaps between women and men undertaking work of equal or comparable value (comparing jobs at the same performance standard), for example, comparing two senior management consultants in the same organisation who perform at the same level.
These like-for-like gender pay gaps are caused by*:
- Inequality in commencement salaries
- Bias in performance ratings
- Bias in performance management system
- Inequality in access to discretionary pay
- Negative impact when women negotiate (because either women negotiate less or because there is often a gender backlash when women do negotiate)
- Cumulative effects of pay inequality
- Impact of long term leave
- Impact of part-time employment
- Discrimination (conscious and unconscious)
And yes these are real, with evidence and anecdotes from both the employee and employer side. Many employers who I have worked with over the years initially could not believe they had like-for-like gender pay gaps and it was only after conducting a payroll analysis they identified these gaps were occurring.
I have been contacted by numerous women since working in the field of gender equality who have shared reasons given by employers for receiving lower pay than their male colleagues in the same role such as ‘well he has a family to look after’ and ‘he has financial commitments’. To be clear remuneration needs to be based on the role and responsibilities, performance and outcomes. Personal circumstances are irrelevant in determining how much an employee is paid.
And what can you do about it?
It is important is to recognise that like-for-like gender pays gaps are rarely intentional and may have been the result of a range of pay and performance decisions. Addressing these gaps is not about placing blame or pointing fingers – it is about looking objectively at the data to understand if there are issues and tailoring solutions to addressing them. Here’s some simple steps that both large and small organisations can do:
- Become aware of the issues, what causes gender pay gaps and the business case for addressing these issues
- Ensure commitment from the top level of leadership to address pay equity
- Conduct a payroll analysis (there’s great resources you can download for free to do this)
- Develop a strategy and action plan specific to the issues you find
- Continue to review and monitor gaps
Detailed resources on specific pay equity strategies and actions can be found on the WGEA website here.
It is a core value of Australians that everyone deserves a fair go, but we also have the approach that ‘she’ll be right’ – we want fairness, but we often assume it or passively support it, often ignoring the issues when they arise rather than being proactive.
Sometimes we have to stare at the cold hard reality of data, if you conduct a gender payroll analysis and find no like-for-like gaps, that’s awesome, keep it up, but if you do – then it’s a great opportunity to demonstrate that you are serious about addressing the issue and promoting a truly fair, merit and performance based workplace by taking real action.
I’d love to hear your questions and experiences related to addressing gender pay gaps within organisations.
*Workplace Gender Equality Agency, Guide to gender pay equity, Practical steps to improve pay equity between women and men in your organisation (available at https://www.wgea.gov.au/sites/default/files/Pay_Equity_Toolkit_Main.pdf)