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Gender pay gap reporting - a change is coming
18 November 2022
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The gender pay gap has become an increasingly important agenda item for Australian organisations. Following the recent changes announced at the Federal Government’s Jobs and Skills Summit in September 2022, it is even more critical for organisations to understand their gender pay gap (GPG) and reporting obligations and to commit to meaningful action to address their GPG.
What’s changing?
According to data published by the Workplace Gender Equality Agency (WGEA), Australia’s GPG currently stands at 14.1% (based on ordinary full-time average weekly earnings), which means that on average, women get paid $263.90 less than men each week1. When we couple this with the average weekly earnings data for both part-time and full-time workers, the pay gap widens to 29.7%2.
To tackle this issue, we saw the Government announce a range of commitments at the recent Jobs and Skills Summit3 (the Summit) to address the GPG and foster greater gender equality across Australian workplaces including:
- Requiring businesses with 100 employees or more to publicly report their GPG to the Workplace Gender Equality Agency (WGEA)
- Requiring the Australian Public Service to report to WGEA and to set targets to improve gender equity in the public service.
On the 27th of October 2022, the Government introduced their Secure Jobs, Better Pay Bill into the Lower House, which began to legislate the Summit commitments, including provisions to promote pay transparency and outlaw pay secrecy clauses.
Reporting alone is not enough
Many organisations now regularly audit and track data surrounding their GPG. Whilst such reporting is valuable, alone it will do little to address the GPG. The real value of GPG reporting is realised when data analysis is used to inform decisive, tailored, targeted and specific actions to address the GPG at your organisation. This transformation of insights into action is the most challenging part of any change initiative.
Why should organisations commit to addressing GPG?
The GPG is a key focus area of the Government's agenda to embed fairness in Australia’s workplace relations system. Including the above, we expect there to be further initiatives and GPG requirements over the coming years, just as there have been in other countries such as in the United Kingdom and New Zealand. Acting now will prepare organisations for these changes and provide other key benefits, such as:
- Reducing legal risk and potential wage trust exposure;
- Strengthening an organisation’s employee value proposition as a workplace that is committed to equality and fairness;
- Build reputational value and brand goodwill;
- Provide quantitative insights to inform further targeted diversity and inclusion initiatives;
- Allowing organisations to better understand their current state and identify systemic issues within leadership, practices and processes impacting fairness and inclusivity.
Key considerations when preparing for the new reporting requirements and addressing the gender pay gap
Leadership knowledge and capability
Do our leaders understand the GPG, the risks of not doing an GPG analysis and the role they can play in fostering more equal workplaces?
Understanding WGEA requirements
Do we understand how the mandatory reporting requirements will apply to us?
Pay transparency
Do we still have legacy pay secrecy clauses in employee contracts? If yes, and these were to be removed, what are the implications for our business?
Data-driven gender pay gap reporting
Have we optimised our tools, processes and policies (HR operating systems, payroll technology, people reporting, etc.) to ensure we can collect, analyse and maintain data to understand our GPG and the factors contributing to it?
Measurement and targets
How are we holding organisational leaders accountable for improving the GPG?
Alignment with values and policies
How do the realities of pay and progression stack up against our values and aspirations? To what extent are pay equity objectives built into the organisation’s remuneration and related policies?
The upcoming changes demonstrate how expectations around GPG transparency are rapidly shifting. Leaders have the opportunity to get ahead of the curve and take proactive steps to better understand their GPG. By investing the time to analyse the immediate and broader systemic and cultural factors driving their GPG, organisations can set themselves up to drive meaningful and sustainable cultural change on gender equality and on inclusion more broadly.
1Workplace Gender Equality Agency: Gender Pay Gap Data
2Workplace Gender Equality Agency: Hard choices on necessities for Australian women as gender pay gap persists
3Australian Government Treasury - Jobs and Skills Summit September 2022 – Outcomes
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