Closing the Gender Pay Gap: A Roadmap for Australian Corporates

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The gender pay gap remains a persistent issue globally, including in Australia. Despite progress in gender equality, the disparity between male and female earnings is a tangible measure of inequity in workplaces. For Australian corporates, closing this gap is not just a moral imperative but also a legal and economic one. Legislative requirements such as the Workplace Gender Equality Act 2012 and other evolving frameworks make it clear: corporates must act with intentionality to foster fairness and compliance.

This article explores strategies for Australian corporates to close the gender pay gap, emphasising adherence to legislative requirements and the broader benefits of equitable pay practices.

The Current Landscape of the Gender Pay Gap in Australia

As of May 2024, the Australian Bureau of Statistics (ABS) reported a national gender pay gap of 11.5%. This figure represents the difference between the average full-time weekly earnings of men and women, with men earning an average of $2,014.30 and women earning $1,782.80, resulting in a weekly difference of $231.50.

The Workplace Gender Equality Agency (WGEA) provides a broader measure, reporting a total remuneration gender pay gap of 21.8%. This metric includes base salary along with additional earnings such as bonuses and superannuation. According to WGEA, women earn 78 cents for every dollar earned by men, amounting to an average annual difference of $28,425.

Gender pay gaps vary significantly across industries. According to WGEA data, industries with the highest gender pay gaps include:

• Financial and Insurance Services: 24.1%
• Construction: 23.5%
• Professional, Scientific, and Technical Services: 22.3%

Conversely, industries with the lowest gender pay gaps are:

• Public Administration and Safety: 6.6%
• Accommodation and Food Services: 7.8%
• Retail Trade: 8.6%

These disparities highlight the varying challenges and progress across different sectors in achieving gender pay equity.

While structural factors such as the overrepresentation of women in lower-paying industries and underrepresentation in leadership roles contribute to the gap, workplace practices, biases, and culture also play significant roles. The legal landscape requires corporates to report and act on pay disparities, presenting an opportunity to accelerate change.

Legislative Framework Driving Change

Workplace Gender Equality Act 2012

Under this Act, businesses with 100 or more employees must report annually to WGEA on six key gender equality indicators:

1. Gender composition of the workforce.
2. Gender composition of governing bodies.
3. Equal remuneration between women and men.
4. Availability of flexible working arrangements.
5. Consultation on gender equality issues.
6. Sexual harassment, discrimination, and bullying policies.

This reporting obligation fosters transparency and encourages companies to analyse their pay data, identify gaps, and implement corrective actions.

Fair Work Act 2009

Amendments to the Fair Work Act include provisions to address gender equality, such as protections against discrimination and the enforcement of equal remuneration orders. This ensures that women performing work of equal or comparable value receive equitable pay.

New Initiatives in Pay Transparency

Recent legislative trends emphasise pay transparency as a mechanism to close the gender pay gap. For instance, the federal government has committed to making employer pay gap data public by 2025, pushing corporates to take preemptive actions to avoid reputational damage.

Strategies for Australian Corporates to Close the Gender Pay Gap

1. Conduct Regular Pay Audits

Pay audits are foundational to identifying and addressing gender pay gaps. By analysing data on salaries, bonuses, and benefits across gender lines, organisations can pinpoint discrepancies. These audits should:

• Cover all job classifications and levels.
• Account for both base pay and discretionary bonuses.
• Be conducted annually for continuous improvement.

For example, companies like Westpac and PwC Australia have publicly committed to pay equity reviews, demonstrating leadership in tackling pay disparity.

2. Embed Pay Transparency

Transparency in pay practices reduces secrecy around remuneration and helps address unconscious biases. Steps to achieve this include:

• Publishing salary bands and ranges in job advertisements.
• Educating managers on equitable pay practices.
• Publicly reporting on progress toward closing the gender pay gap.

Pay transparency not only builds trust but also ensures compliance with forthcoming legislative changes requiring public disclosure of gender pay gap data.

3. Review Recruitment and Promotion Processes

Recruitment and promotion are critical stages where biases can perpetuate gender pay gaps. To counter this:

• Ensure job descriptions and criteria are gender-neutral.
• Implement diverse hiring panels.
• Track promotion rates across genders to identify disparities.

For example, BHP’s gender-balanced recruitment policy has driven significant progress toward its target of 50% female representation by 2025.

4. Offer Flexible Work and Parental Leave Policies

Lack of flexibility disproportionately affects women, who often shoulder greater caregiving responsibilities. Corporates can:

• Provide equitable parental leave policies for all genders.
• Promote flexible work arrangements without stigma.
• Encourage male employees to take parental leave, normalising shared caregiving.

Research indicates that workplaces offering flexible arrangements experience higher retention and satisfaction rates, which indirectly reduce pay disparities.

5. Invest in Leadership Development for Women

The underrepresentation of women in leadership roles is a key driver of the gender pay gap. Companies should:

• Offer targeted leadership programs for women.
• Set measurable targets for female representation in leadership roles.
• Regularly review succession plans to ensure gender balance.

For instance, Telstra has committed to having 50% female representation in senior leadership by embedding these practices.

6. Champion Inclusive Workplace Cultures

An inclusive culture is crucial for sustainable gender pay equity. Companies can:

• Train leaders on unconscious bias and inclusive practices.
• Celebrate diversity milestones and achievements.
• Establish employee networks to support underrepresented groups.

Inclusive cultures not only attract diverse talent but also improve organisational performance, as shown by numerous studies.

The Business Case for Closing the Gender Pay Gap

Beyond compliance, closing the gender pay gap delivers tangible benefits for businesses. Studies consistently link gender diversity to improved financial performance, innovation, and employee engagement. Moreover, addressing pay equity:

• Enhances reputation: Companies with equitable pay practices attract top talent and maintain strong employer brands.
• Reduces turnover: Fair pay fosters employee loyalty, reducing recruitment costs.
• Meets stakeholder expectations: Investors increasingly prioritise environmental, social, and governance (ESG) metrics, including gender equality.

Measuring Success: Reporting and Accountability

Corporates must establish robust reporting mechanisms to measure progress. This includes:

• Setting clear, time-bound targets for reducing the gender pay gap.
• Publicly sharing progress reports to enhance accountability.
• Seeking third-party verification of pay equity analyses.

WGEA’s Employer of Choice for Gender Equality (EOCGE) citation provides a framework for best practice, recognising organisations that demonstrate measurable gender equality outcomes.

Looking Ahead: The Role of Leadership

Closing the gender pay gap requires leadership commitment. CEOs and boards must champion gender equality as a strategic priority. Leadership accountability can be driven through:

• Linking executive remuneration to diversity and inclusion (D&I) metrics.
• Allocating dedicated resources to implement D&I strategies.
• Regularly communicating progress to stakeholders.

Conclusion

For Australian corporates, closing the gender pay gap is no longer optional—it is a legal, ethical, and strategic imperative. By leveraging legislative frameworks such as the Workplace Gender Equality Act 2012, conducting pay audits, embedding pay transparency, and fostering inclusive cultures, businesses can make significant strides toward equity.

Achieving gender pay equity is not only about compliance; it reflects a company’s values and commitment to fairness. In doing so, corporates will position themselves as leaders in equality, benefitting their employees, stakeholders, and society at large. The path to closing the gender pay gap may be challenging, but the rewards—economic, social, and reputational—are well worth the effort.