New research has demonstrated that the COVID19 pandemic widened the pay gap between the sexes, driving greater future inequality with lower pay and hours resulting in decade-spanning knock-on effects that only widen the equity gap.
Ashley Speers, executive officer for CEOs for Gender Equity, says facilitating women’s participation in the workforce is simply good sense.
“It blows my mind. The research out there, it says the cost for universal free childcare for Australia would be about 12 billion, and the return in GDP would be 60 billion,” Speers explained.
“So, if you ask me that's a pretty smart investment, not only from a talent opportunity, but also from a really tangible financial point of view as well.”
Not-for-profit organisations like CEOS for Gender Equity have been working toward more equitable outcomes for both men and women in the workplace, and believe companies and governments can be empowered to bridge the gender gaps within Australian society and create a more equal outcome for us all.
In this article:
- What is the gender pay gap?
- Why does the pay gap exist?
- What changes will be required to bridge the gap?
- Gender equity as a financial prerogative
What is the gender pay gap?
Much ado has been made about the gender pay gap over the last two decades or so, but what is it?
While some research concerns the gap in pay between the genders in ‘like-for-like’ comparisons (i.e, similar job descriptions, experience levels etc) the gender pay gap specifically concerns the difference in average weekly earnings between men and women.
The Australian national gender pay gap increased 0.3% over the last six months to sit at 14.1% in 2022, amounting to a difference of $263.90 per week between men and women’s average weekly income.
These numbers are sourced directly from the Australian Bureau of Statistics (ABS) and include data from full-time work only.
“If we take into consideration part time work, things outside of pay such as discretionary bonuses, I can't fathom what the actual figure would be,” Speers stated.
Research from the superannuation fund Equip has found that a third (32%) of Australian men received a boost to their annual income during COVID19, compared to just one in four (23%) women.
“The data shows us that since COVID, women, when compared to men, are not only earning less and have less leftover at the end of the month, but they also have fewer investments at play to build what wealth they do have,” Equip CEO Scott Cameron said.
“There is a risk this all comes together to leave women short-changed when they come to later life. “
In a previous article, Proactive also investigated the Super gender gap, which sits at 23.3% and has concerning implications for the future of gender equity in Australia.
Why does the pay gap exist?
This is a loaded question, and one that deserves an expert’s explanation.
“There’re a few contributors to it from my perspective,” said Ashley Speers, who has been working on a PhD dissertation assessing methods to accelerate female inclusion and diversity in the Western Australian mining industry and beyond.
“First of all, is the fundamental structural differences in the industries we have in Australia.
“We have some traditional feminised industries; being education, health care, childcare, and we have some traditional male and male dominated industries; being mining, construction, utilities.
“During the COVID pandemic, those core male dominated industries were booming, and government spending reflected that.”
Hospitality and retail – which were the worst hit by the pandemic – are gender neutral industries, Speer explained, but the sectors that benefited most were almost entirely male-dominated, which widened the gap.
“Another huge impact was also an issue that existed before the COVID pandemic – which was exacerbated – and that is unpaid caring and healthcare responsibilities,” Speers continued.
“Due mainly to social norms, women default to those roles. Even when women work full time, we still partake in an unfair amount of that relative to our partners.”
The Australian Government’s Workplace Gender Equality Agency concurs; women spend 64.4% of their average weekly working time on unpaid care work, compared to 36.1% for men.
The monetary value of this unpaid labour has been estimated at $650.1 billion, the equivalent to 50.6% of Australia’s current GDP.
These differences in pay and hours worked have ongoing effects that reach far beyond a difference in cash on hand.
“Since women were defaulting to the unpaid domestic and caring responsibilities, we've also put a pause on our careers. We've been losing out on superannuation contributions. There’s a kind of roll-on effect, which we need to think about,” Speers emphasised.
The final structural issue Speers highlighted is one of part time and flexible work. Women are far more likely to work part time or flexible jobs, often in order to keep up with family responsibilities.
“Again, the social norm says, ‘oh, it's easier for you to just deal with the kids’, so there was a lot of that happening.”
What changes will be required to bridge the gap?
There is a plethora of complex policy, cultural and structural changes that will be required to fully bridge the gender pay gap, but no one said it would be easy.
“I've been working on a PhD in gender equity for two years, and I don't have all the answers,” Speers admitted.
“It's really complex. It's really complicated, it's really hard to get right. Therefore, you need to dedicate resources to it, because if you don't, it's just never gonna happen.”
Now we’ve acknowledged how difficult the problem will be to fix, let’s talk about solutions.
Paid parental leave and childcare
“In my experience, and from speaking to my network, the number one inhibitor to women's workforce participation is the availability, quality, and cost of childcare,” Speers said.
While the Federal Australian Government appears to be making some effort in this regard, Speers strongly recommends companies look at their own policies with an eye to talent retention.
Paid parental leave, in particular policies that encourage equal participation by parents, are absolutely necessary for retaining women in the workplace long-term.
“If I'm an accountant and my company doesn't have paid parental leave, I have to default to the government's minimum wage.” Speers explained, “Now, my bills aren't built on that amount, my commitments are not built on minimum wage.”
The cost from this lack of effective policy is often passed on to companies when women are unable to stay in work.
“It costs you seven times more to recruit someone than to retain someone,” Speers stressed.
The discussion of childcare and parental leave bonuses is a common topic among women’s groups, said Speers, with many women choosing to retain long-term positions in companies with good support policies over those with higher pay or other similar monetary benefits.
“So, my message is, if you don't have one [a parental leave policy], please put one in place, your employees will be eternally grateful, and it will impact the talent that you attract and the talent that you retain.”
Inclusive, flexible work culture
Childcare policies are the first port of call, but inclusive, flexible working culture and policy structures are important for both men and women’s working health.
“If the inclusion isn't right, not only is that not attracting women, you're also likely losing women,” Speers said.
“The retention of female talent is a rife issue, which I've experienced from talking to our members and other organisations in Western Australia and beyond.”
The solution, according to CEOS for Gender Equity, is executives leading from the front.
“One of the main themes in the research which I'm seeing so far, is that when the CEO doesn't get it, doesn't believe in it, can't articulate it, and isn't providing regular engagement and updates on any initiative – not just gender equity, by the way – it never works,” Speers asserted.
“It's all starts from the top. Many of our members have a policy of entering loudly and leaving loudly.”
CEOs for Gender Equity encourage their members to loudly and visibly take advantage of available flexible working, parental leave, and support policies, personally demonstrating that it’s okay for employees to use these benefits.
This might involve announcing to the office that they’re leaving early for a child’s schooling event or sharing images and videos of attending them with employees and colleagues.
“That’s leading from the top. That's being really practical. That's normalising it. It’s visible.”
Speers hopes this kind of normalisation will allow employees to follow the executive team’s example without fear of damage to their careers. She’s also passionate about ensuring men’s inclusion in this healthier work-life balance.
“The beauty about all this is everyone benefits,” she said, “If we can get more men engaged with those parenting and caring responsibilities, that frees women up to come back to the workplace earlier, or work more hours, or try a new career.
“This is a historic, structural, and social issue where men carry the burden of feeling like they need to be the breadwinner, they have to be tough, the provider, have to work all the hours.
“I think the reason it [flexible working] hasn't been embraced fully, is because men don't feel psychologically safe to really engage with it. They’re missing out.”
Gender equity as a financial prerogative
Over the last few years – and especially the last few months – the issue of gender equity has gained more traction among business and government stakeholders.
Childcare subsidy rates took centre stage at the recent Jobs and Skills Summit, with both the Australian Council of Trade Unions (ACTU) and the Business Council of Australia (BCA) throwing their support behind increased federal subsidies.
State governments – specifically the Victorian and Western Australian governments – have also begun to give gender equity outcomes within companies financial weighting, using equality metrics to inform government contract and tender processes.
“It's called the Building Equality Policy,” Speers explained, outlining the Victorian state policy.
“If you're a construction company in Victoria, and you want to bid for work which is $20 million or above in value, you're gonna have to have at least 4% of your trades female 7% of your trainees and apprentices.
“They want to see your gender equity plan for your organisation, and they want to see a specific project gender equity plan.”
In Western Australia, the policy is called Stronger Together, and focuses on leveraging the states’ Gender Equality Agency to ensure companies applying for state tender are complying with reporting requirements.
“I'm really excited about the potential for the use of procurement to drive gender equity outcomes,” Speers emphasised.
“Don't get me wrong, I don't think it should be something really harsh and really brutal, because that turns people away.
“It needs to be done with the end goal in mind, of improving gender equity and supporting organisations on the journey.”
When it comes down to it, the benefits from improving gender equity outcomes in the workplace are not only social in nature; there is a huge – and growing – financial incentive to the effort, with far-reaching implications for productivity, talent retention, profit margins and government tender preferences.
There are several practical actions companies can take, right now, to improve their gender equity outcomes and thus their bottom line:
- Create robust flexible work, childcare and parental leave policies.
- Encourage your executive team and others in positions of power to take advantage of these policies regularly and visibly.
- Devote real capital, labour and consideration to maintaining and improving your gender equity policies.
- Engage with not-for-profits and other CEOs to improve your policies and reporting practices.
- Continuously iterate on those policies with feedback from your employees.
- Engage with governments and other stakeholders to get the most out of your efforts.