The Gender Pay Gap –Why all the fuss?

by Judith Barnes sourced (WGEA)

You may have noticed a bit of talk over the past month on the gender pay gap. This is because in February a whole new range of statistics were made public for the first time. Every year, companies with more than 100 employees, are required to report to Federal Government Workplace Gender Equality Agency (WGEA) on a range of indicators, including employee pay. This year the data collected by the WGEA was made public and released on the WGEA website, searchable by company name. This means anyone can now look up a company with more than 100 staff and find out what their gender pay gap is and how that may compare to other companies in the same industry.

What is the Gender Pay Gap?

The gender pay gap can be hard to understand and there's a lot of misinformation. The gender pay gap is not the same as equal pay. Equal pay is where workers are paid the same, regardless of gender, for performing the same role or different work of equal or comparable value. In Australia, this has been a legal requirement since 1969.

Instead, the gender pay gap shows the difference between the average or median pay of women and men across organisations, industries and the workforce as a whole.

It is calculated as the difference between the average earnings for men and women, expressed as a percentage of men's average earnings.

Snapshot of Australia’s workforce

The pay gap is slowly creeping down. In 2013/2014 (the start of data collection) the average pay gap was a bit under 30%. This year the national gender pay gap is 21.7 %.

Source: https://www.wgea.gov.au/data-statistics/data-explorer
 

How does our industry compare?

While WGEA has several broad industry categories, the majority of ALGA companies fall into the Professional, Scientific and Technical Services category. Gender pay gap statistics for this group (without computer system design) show, as an industry, we have a pay gap slightly higher than the national average. This year, based on average total remuneration, our industry pay gap is 22.8%.

Looking at environmental companies specifically (those with more than 100 employees) the gender gap provided on the WGEA website ranges from approximately 8 % to 31 %. Which is a surprisingly broad range.

Statistics sourced from Source: https://www.wgea.gov.au/data-statistics/data-explorer

What factors influence the Gender Pay Gap?

There are a range of factors that affect the gender pay gap. It is the result of social and economic factors that combine to reduce women’s earning capacity over their lifetime. The WGEA identifies the following causes:

• Conscious and unconscious 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.
• Lack of workplace flexibility to accommodate caring and other responsibilities, especially in senior roles.
• High rates of part-time work for women.
• Women’s greater time out of the workforce for caring responsibilities impacting career progression and opportunities.
• Women’s disproportionate share of unpaid caring and domestic work.

An in depth evaluation of the causes of the gender pay gap is provided in the ‘She’s Price(d)less’ report (https://www.wgea.gov.au/sites/default/files/documents/FINAL%20VERSION_She%27s%20Pricedless_2022.pdf) which was last released in 2022 based on data collected in 2020. The report identifies the following three key drivers of the gender pay gap:

Source: ‘She’s Price(d)less’ KPMG 2022

The causes of and solutions to the gender pay gap are complex. The fact that 36% could be attributed to nothing other than gender discrimination is shocking.

The new visibility of a company’s gender pay gap statistics through the WGEA website will hopefully focus company attention on this persistent issue. I encourage everyone to hop on the website (https://www.wgea.gov.au/) and look at the gender statistics of the industry and think about what can be done to reduce the pay gap.

These new reporting requirements are encouraging and will hopefully drive organisations to implement appropriate targets and processes to achieve pay parity. This exposure should prompt companies to be transparent with stakeholders, and to explain why gaps exist and their plan to address them.

Article Published on 28/03/2024

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