Finance sector’s gender pay gap exposed in new WGEA report

Women dominate Australia’s finance workforce but earn 22.3 per cent less than men on average. See which firms have biggest disparity.

Women in the finance sector make up 53 per cent of employees, yet on average face a pay gap of 22.3 per cent against their male colleagues.

Australia’s banking, finance and insurance system has an almost perfect gender balance in its workforce, with women making up 53 per cent of employees, yet women on average face a pay gap of 22.3 per cent against their male colleagues.

The gender pay gap figure for the sector, released on Tuesday, is almost double the national figure of 12.1 per cent.

It is the second-highest of any industry after construction which comes in at 25.3 per cent and higher than mining where the gendered pay gap is 19.8 per cent.

The annual report of the Workplace Gender Equality Agency reveals the average total remuneration paid by individual employers and for the first time includes the pay of CEOs and heads of business and other top executives. The addition of the high salaries of these executives skew the averages, but is considered by the WGEA to give a good picture of the true dynamic in the workforce where there are often more men in higher paid jobs.

The data, which covers about 7800 employers and 5.3 million employees across the country, is also used by the WGEA to calculate national and sectoral midpoints or medians so employers can benchmark themselves against other companies and the overall figure in their sector.

This report reveals that while there is a differential in the base salaries of men and women in finance, the gap widens considerably when extras such as bonuses, superannuation, overtime and allowances are added in.

While the pay gaps of the big four banks come in at 18.8 per cent (ANZ); 19 per cent (NAB) and 22.4 per cent (Westpac and Commonwealth), some firms have much bigger pay differentials.

Macquarie Bank’s average pay gap is 41.8 per cent, Morgan Stanley 58.6 per cent, Bell Potter 54.7 per cent, UBS 48.5 per cent and Barrenjoey 42.3 per cent.

At Macquarie, the figure, which covers total remuneration, is much higher than the base salary gap of 16.2 per cent, reflecting how much bonuses and allowances add to the pay of top operators there. Similarly, Morgan Stanley Australia’s base salary gap of 37.3 per cent is much lower than its total remuneration number.

The WGEA report uses various calculations of averages and medians to demonstrate that while equal pay has been law since 1969, the skewed composition of the workforce – more men in higher-paid jobs and sectors – still results in a gender-based pay gap.

When it comes to financial services, one problem is that while overall women make up 53 per cent of the workforce – where average remuneration is $161, 598 – they comprise only 36 per cent of the top remuneration quartile where people take home $306,934 on average. Instead they are clustered around the lower pay scale where they comprise 67 per cent of workers and earn just $76,079 on average.

The WGEA argues that the over-representation of men in the upper quartile of pay scales “may be a significant driver for two-thirds of employer gender pay gaps”. It notes that the majority of employers across all sectors have small differences between base salary and total remuneration. But large gaps are evident in several high-paying industries with the additional payments tending to benefit employees in the highest-paid roles “who are more likely to be men”.

On average, Australian men earn $11,204 more in superannuation and discretionary payments but that triples to $36,242 in the financial and insurance services sector.

At the national level, 56 per cent of employers reduced their average total remuneration gender pay gap compared to last year, while 44 per cent increased the gap. In financial and insurance services, 62 per cent of employers improved while 38 per cent ended up with a worse pay gap.

Originally published as Finance sector’s gender pay gap exposed in new WGEA report