On the 27th February, Australians will find out the gender pay gaps that exist in companies with 100 or more employees.
The Workplace Gender Equality Agency (WGEA) will publish the median gender pay gaps of organisations, expressed as the percentage difference between women’s and men’s earnings. It may come as a rude shock for some companies, especially for those with a high concentration of men employed in senior leadership roles and women in lower paid, “pink collar” roles.
The move will be a powerful catalyst for change on workplace gender equality, and comes as a result of amendments made to the Workplace Gender Equality Act 2012, which was passed in federal parliament in March 2023.
Katriina Tähkä, Managing Director of Cultivate Sponsorship, who has spent years of her career working to help improve outcomes for women in organisations, says the transparency that will come as a result of publicly disclosing gender pay gaps, is a total game-changer.
“We’re very lucky in Australia that we’ve got WGEA dedicated to doing the work they do on the gender pay gap. It’s one of the most impressive data sets about measurable gender equality in the world,” Tähkä told Women’s Agenda recently.
While Tähkä believes the publication of gender pay gaps is a big step forward, she also warns there is a potential for employers to simply look for a quick fix, rather than addressing the underlying factors that perpetuate gender inequality in workplaces.
“The transparency is going to be awesome because it shines a light on the issue,” she said, “but employers also need to pause and think about the deep underlying, decades-long causal factors that led to this situation.”
Tähkä says many companies may rush to give their female employees an immediate pay increase and while that is positive action, it shouldn’t come at the expense of deeper reflection.
“I’ve seen it before in one of the organisations I’ve worked with in the past. We did our WGEA report and there was a miserable pay gap. Internally, the first solution everybody had was, well, let’s just give all the women a pay increase and make it go away.’
“It does absolutely nothing to solve the underlying issues that got you there.”
There is also a significant problem in the lack of intersectional data available on the gender pay gap, which will prevent women from diverse backgrounds from experiencing the full benefits of the upcoming disclosures.
So what can employers do if they want to minimise their gender pay gap problem?
One of the key issues that Australia has when it comes to the gender pay gap, is one of job segregation, which sees women working in lower paid roles within a company and men rising to higher-paid executive positions and roles with P&L responsibility.
While we see this occur in many industries — one of the obvious ones being healthcare — it’s becoming more common in sectors including the financial services.
“Financial services is actually quite female-dominated, but if you look at the highest paid and highest seniority level roles, they’re predominantly male,” Tähkä explains. “And you get this phenomenon of ‘pink collar’ roles.”
Companies will not be able to overcome this structure until they address work value, according to Tähkä, who says many of us still hold traditional mindsets about what a leader looks like.
“Why do we have perceptions that certain roles are less paid? You’ve also got to look at career streaming and who we perceive to be good at different types of roles,” she says.
“There’s also the option of just giving people a go in non-traditional roles”.
Let’s change our perception of women’s work
Much of gender inequality in the workplace comes down to mindset and a long-term bias, according to Tähkä. Often, it exists around who does what in organisations and our instincts around what constitutes “women’s work”.
This bias is something that needs to be tackled if companies are to close their gender pay gap.
“In most Australian organisations – – I don’t think people would say it verbally anymore — but if you look at the behaviours, the systems and the mindsets, women are perceived as leaders of the clinical roles,” Tähkä says.
“Many organisations will have women on boards and women as senior executives but they’ll tend to be the General Manager, HR leader, the Chief Marketing Officer or the Chief Legal Officer.”
“It’s changing slowly but too slowly. We need to see women in leading P&L roles and taking on the CFO role and that deep sort of responsibility. Then we’ll see more women in positions of leadership, which will break that nexus of women in the lower level roles.”
Flexible work is the key
One of the key barriers that prohibits larger numbers of women from rising to senior leadership positions at work is a lack of flexible work opportunities.
As we know, women tend to take on the lion’s share of caring work and domestic labour in families in Australia, as well as the heavy ‘mental load’ of running a household. Therefore, it’s often the case that at certain points in their career, women look for roles that offer greater flexibility.
But where are those flexible roles? In many organisations, they are stuck well below the leadership levels.
“Unless we start to see executives working flexibly, you’re not going to have both a perception of the work that women do, but also the availability of roles that can balance carrying responsibilities and senior level responsibilities,” Tähkä says.
It’s one of the reasons why job-sharing, particularly at the leadership level, could be a really good option for organisations looking to bring more women into higher positions.
“Job sharing would be such a good solution for Australia. It could mean that two extremely intelligent, senior women, could balance their life responsibilities, while being able to do a leadership role. Or as people transition to retirement, it could be a great way to partner a senior leader with emerging female talent to transfer knowledge and also allow two valued employees to work part-time in a senior role.”
How can sponsorship help close the pay gap?
One of the key reasons that Cultivate Sponsorship developed their sponsorship program was to help to create a ladder and a confidence pathway for women who are progressing in their career.
Tähkä points to Australia’s high proportion of female entrepreneurship, and notes that often, talented women would rather start their own business than climb the ranks of an established organisation.
“There is this point where women tend to tap out and go, this is just too hard,” she says.
That’s where sponsorship can play such a vital role in helping to break down some of the barriers facing women in the workplace. And often, the change happens when a senior male leader is paired with an emerging female talent and hears about their concerns first-hand.
This, Tähkä explains, is her secret tactic.
“Sponsorship is often more for educating the current male senior leaders about the realities of someone who has not walked in their shoes,” she explains. “And then when they see what’s going on, they actually can make it part of their leadership legacy to drive change.”
“I would hope that companies who have a really deep, intractable gender pay gap — one of the things they could do is get more male sponsors involved in understanding and connecting to their female talent. Then, they will figure out how to resolve their gender pay gap for good, not just this year.”
Find out more about Cultivate Sponsorship here.