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Don’t pass the buck on WGEA gender pay gap reporting

How business leaders can prepare for WGEA naming and shaming on gender pay gaps and why experts say, don’t pass the buck.
Financy
February 1, 2024

In the realm of workplace equality, the countdown of gender pay gap exposure is well and truly on for many companies and the risk of being called out for underperforming industry peers is very real.

The broad strokes of overall pay gaps and pay quartiles, derived from data voluntarily provided to the Workplace Gender Equality Agency (WGEA), are known to those in the corporate sphere.

But the February 27 deadline to start naming and shaming companies on their gender pay gaps has undoubtedly got many HR teams and CEOs concerned, and busily preparing lengthy Employer Statements to explain the nuances beneath their figures and the root causes of their pay gaps.

The stakes are high from a brand perspective because the internet has a nasty habit of allowing media headlines to stick for sometime, even when they are not entirely accurate.

To help business leaders prepare, we spoke to Gender Equity expert at the University of South Australia, Professor Carol Kulik for her advice on what needs to be done and considered in the weeks and months ahead.

Understand your data and what is driving it

“It’s important that organisations drill down into their data to understand the causes of their pay gaps,” says Prof Kulik.

“For instance, is the gender pay gap primarily at upper levels, suggesting that women are underrepresented in the senior roles that pay more?

“Is the gap concentrated in particular units or role, suggesting that women are underrepresented in the trades/professions that pay more?”

The best response to backlash is having a transparent action plan in place.

“Organisations with narrow pay gaps have probably been working on this issue for years.

“Organisations with visible pay gaps today will need to be able to explain it (where and why via an Employer Statement) and be able to describe the steps they are taking to address it.

 

Consider the following:

  • Is it a leadership development program to fast track women into higher level roles?
  • Is it a review of job requirements to remove barriers to women entering high pay trades?
  • Is it a reworked recruitment strategy that speaks directly to women and provides more flexibility for caring responsibilities?

Take responsibility and don’t pass the buck

Professor Kulik says it’s important that organisations see gender pay gaps as their personal responsibility and don’t “pass the buck.”

She adds that employers should also ditch initiatives that really aren’t working.

“If recruitment firms aren’t bringing gender balanced shortlists, find a new recruitment firm that will.

“If universities aren’t encouraging women into trade roles, start an advertising campaign that will.

“If managers aren’t sponsoring women for advancement, incentivise them to do it.”

Will naming and shaming companies on gender pay gaps work?

“Unfortunately I don’t think naming and shaming companies is likely to be very effective because it is hard to get the general public to feel a sense of moral outrage about gender pay gaps.

“The public feels strongly about direct gender discrimination (paying a woman less than a man for the same job) but the gender pay gap is more complex, reflecting the pay disadvantages women experience because of the roles they occupy and the career breaks they take.

“The “person on the street” is likely to view those factors as the employee’s choice rather than the employer’s responsibility.

“But it is the employer’s responsibility to ensure that roles are compensated fairly (as a society we undervalue important service roles in education and healthcare that are dominated by women) and to ensure that career opportunities are not disadvantaged by caring responsibilities (a disruption experienced disproportionately by women).

“I do think the public information will be valuable to unions and government bodies, who will be better able to track progress toward equity in their sectors or states.

“These stakeholders will also be able to celebrate the “positive outliers” who display narrower pay gaps than their competitors – those organisations could be a source of innovative practices that help narrow the gap.

If not name and shame, what?

“I would love to see a campaign that encouraged individual stakeholders (employees, job applicants, business partners) to routinely inquire about an employer’s gender pay gap (and the accompanying action plan).

Rather than a name and shame campaign, this would be a campaign to make conversations about pay gaps routine, something that we check on alongside other indicators of an organisation’s financial position and long term sustainability.

“Our own CWeX research demonstrates the power of trickle down effects: more women in leadership roles very quickly brings more women throughout the organisational hierarchy.

“When there are more women in leadership roles, the organisation is better positioned to identify gender-related barriers and dismantle them.

“So I would strongly recommend that organisations wanting to accelerate their progress toward gender equity to focus on the top of the organisation.

“Bottom up strategies like mentoring new hires or advertising flexibility for entry roles are important, but slow moving.

“These bottom up strategies work better (and faster) alongside the top down strategies that hire women directly into senior leadership roles,” says Prof Kulik.

 

Financy covers gender finance, diversity, inclusion and ESG issues. We advocate for gender equity change through the Women’s Index report and help businesses take action on DEI through tech solutions like IMPACTER.

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Financy
February 1, 2024
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