Employers lift their game on pay equity - Women's Agenda

Employers lift their game on pay equity

A growing number of CEOs are taking action to understand and correct pay imbalances between women and men according to new data released today by the Workplace Gender Equality Agency.

The Agency’s 2015 report card on employer action on pay equity finds a measurable increase in employers conducting pay gap analyses and taking action over the past 12 months.

Key findings:

  • 1,229 organisations reported in 2015 they had conducted a gender pay gap analysis compared with 1,045 in 2014 – a 17.6% increase
  • 26.3% of all reporting organisations said they had conducted a pay gap analysis, up from 24% last year
  • 51% of organisations that conducted a gender pay gap analysis took action to address pay imbalances, up from 46.0% last year

The findings come a year after the Agency launched its pioneering campaign – In Your Hands – which aimed to encourage and help CEOs address their like-for-like gender pay gaps by undertaking a gender pay gap analysis and addressing gender bias in performance assessment, talent management and pay decisions.

Acting Director Louise McSorley said the increase reflected growing awareness about gender pay gaps and an expectation that employers deal with them.

Gender pay gaps have been a dirty secret in Australian workplaces for too long. Today’s report reveals a 17.6% increase in the number of employers conducting a pay gap analysis in the past 12 months.

This is a promising result that also highlights there’s more work to do.

The findings are based on data provided to the Agency by over 11,000 employers representing around 4 million employees – over a third of the Australian workforce.

Of the 1,229 organisations that reported in 2015 a gender pay gap analysis was conducted, over half took action (51%) – a solid increase on last year’s result when 46.0% of employers took action.

The most common actions taken were: identifying causes of the gaps (27.7%), reviewing remuneration decision-making processes (20.5%), and reporting pay equity metrics to the executive (19.4%). Around a quarter of employers said they didn’t find any unexplainable or unjustifiable gaps.

Ms McSorley was pleased that the findings enabled organisations to take action.

While it’s pleasing to see a growing number of employers acting on the findings of their pay gap analysis, it’s disappointing to see around a quarter sit on their hands after reviewing their payroll data.

Reviewing the least popular actions highlights how organisations can lead to tackle the root causes of pay inequity and firmly place it as an important strategic and governance issue.

Less than 10% report to the board on pay equity, 7.4% train people managers in addressing gender bias, and 15.6% analyse performance pay to ensure there’s no gender bias. Conducting a gender-based job evaluation was the most uncommon activity (2.0%), which involves assessing a job’s value based on the required skills and experience, as well as value to the organisation.

Given the widely recognised under-valuing of female dominated roles and its impact on the national gender pay gap, this area is ripe for action.

According to Ms McSorley, enshrining pay equity in remuneration policies was also on the rise.

We’re delighted to see a 7.5 percentage point increase in organisations including pay equity objectives in their pay policies, growing from 18.1% last year to 25.6% in 2015.

The Agency also released today a case study by Commonwealth Bank, one of its 84 Pay Equity Ambassador organisations. The Agency’s Pay Equity Ambassadors have signed a pledge acknowledging the impact gender bias can have on pay outcomes for women and the importance of analysing payroll data and taking action. Attracting and retaining the best talent and driving productivity are primary drivers.

Commonwealth Bank’s recent pay equity review has triggered new measures including ensuring employees on parental leave don’t miss out on pay and performance reviews, as well as targeting ‘hot spots’ in the employee lifecycle such as new hires to the organisation.

Ian Narev, Commonwealth Bank Chief Executive Officer said:

We believe in a simple principle of like pay for like work. We are committed to gender pay equity across our organisation. As part of this commitment, we monitor and analyse our talent management data, including pay, by gender and take action where necessary.

Ms McSorley said she hoped momentum would continue to build and that each year the Agency could report an increase in the number of employers making pay equity a priority.

We also look forward to more leaders measuring and taking responsibility for addressing their organisation-wide pay gender gap – the ultimate gender equality performance metric.

Employees can find out whether their own organisation has conducted a gender pay gap analysis and what action they took at www.inyourhands.org.au.


About the Workplace Gender Equality Agency and its data

The Workplace Gender Equality Agency is an Australian Government statutory agency charged with promoting and improving gender equality in Australian workplaces in accordance with the Workplace Gender Equality Act 2012 (the Act). The Agency’s vision is for women and men to be equally represented, valued and rewarded in the workplace.

Under the Act), non-public sector employers with 100 or more employees must submit a report annually to the Agency against six Gender Equality Indicators:

  • Gender composition of the workforce
  • Gender composition of governing bodies of relevant employers
  • Equal remuneration between women and men
  • Availability and utility of employment terms, conditions and practices relating to flexible working arrangements for employees and to working arrangements supporting employees with family or caring responsibilities
  • Consultation with employees on issues concerning gender equality in the workplace
  • Sex-based harassment and discrimination.

The Agency’s dataset is based on 4,670 reports submitted on behalf of over 11,000 employers in accordance with the Act for reporting period 1 April 2014 to 31 March 2015. Around 4 million employees across Australia are covered – more than one-third of Australia’s total labour force. Findings from the full dataset will be released on 26 November 2015.

 

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