Gender wage gap is slowly but inevitably closing

Slowly, more companies are appreciating that it makes all-round sense for women to receive the same salaries as men.

Helen Fraser, human resources director at global professional services firm AECOM. Photo: Stuart McEvoy.

Inside a Collins Street office tower at Melbourne’s Docklands, female staff are awarded pay rises without asking and even when they are not working.

When men working at global engineering firm AECOM win pay increases, female members on the same team also get salary rises. Women on parental leave ­receive pay rises and female staff are ­offered coaching sessions about how to discuss remuneration with their managers.

The strategy to confront the significant gender pay gap in the traditionally male-dominated pro­fessional, scientific and technical services sector is making a difference. Among the company’s middle managers, the gap, after three years, is less than 5 per cent.

“It’s really putting our money where our mouth is,” AECOM human resources director Helen Fraser tells The Australian. “We can talk about the gender pay gap, but what’s made the biggest difference is actually paying people more.”

The latest national gender equality scorecard released by the Workplace Gender Equality Agency shows more employers than ever are prioritising gender pay as a business imperative.

There have been gains in the number of employers implementing policies to support gender equality in succession planning, talent identification, promotions and retention.

The percentage of employers analysing their company’s gender pay gap has jumped 10.8 percentage points to 37.7 per cent.

But while the overall gender pay gap is trending down marginally, men still out-earn women by $26,527 on average, equivalent to 22.4 per cent.

Pay gaps persist in every industry and occupation, and the ­female-dominated sectors of healthcare and education even ­recorded an increase in the gender pay gap over the past 12 months.

The gap between men and women salaries

WGEA director Libby Lyons says the data shows there has been “really strong improvement” in employer action.

“We have seen a big jump in employers that are actually analysing their pay data,’’ she says.

“Organisations are recognising that there is a very strong business case for gender equality and if they don’t start addressing these issues now, they’re going to lag behind their competitors.”

Fraser says AECOM, which has 3300 staff across Australia, ­decided it had to take tangible ­action to address the gender pay gap after then-chief executive Lara Poloni became a WGEA equal pay ambassador in 2015.

The first stage involved a comprehensive gender pay analysis.

“We went in and we looked for the problems,’’ she says. “It’s very easy to go in and do an analysis and say it’s all all right. But we ­actually went in and said, ‘Actually, there must be a problem, we know our industry is one of the worst.’

The gap between men and women salaries

“All the WGEA data tells us that professional and technical services has one of the biggest pay gaps (fourth highest at 25.4 per cent) and we are one of the biggest employers. There’s every reason to think that we had a problem, so we went in and looked for the problems which told us we had to ­address it with some money.”

Unsurprisingly, the biggest pay gap emerged after female staff took leave to have children. Typically, these workers, largely engineers and scientists, had been in the workforce for eight to 15 years.

“It’s that gap when they are taking a career break to have babies or where they are coming back part-time,’’ Fraser says. “That’s definitely the problem that we found and we believe that unconscious bias can creep into decision-­making around salary at those points in time. So we have really focused our efforts at that mid-­career level.”

One initiative was to ensure women on parental leave received wage increases. “It’s a time when people can easily be forgotten in terms of their career,’’ she says. “We also made sure that when a team member has negotiated a pay rise, we also looked at others around them.

“What we found was that we had more men coming forward and negotiating pay rises outside of the normal pay cycle. We ­wanted to make sure that women who perhaps weren’t raising issues of pay weren’t getting left behind.”

The third component was the establishment of a separate ­remuneration budget for female staff. Over three years, $1.25 million has been paid to women.

The company’s gender pay gap fell by 5.4 per cent across Australia, and the gap among mid-professional employees is below 5 per cent.

That said, the company-wide gap remains a substantial 24.5 per cent, largely driven by more men than women being in leadership positions.

“I think there are lots of big ­employers like us who are really committed to driving change,’’ Fraser says.

“One of the biggest challenges is retaining women in engineering. Women are leaving the profession at a much higher rate than men. That’s what the data tells us.

“We think it’s because there’s a bit of an impression that roles around engineering are not flexible and there’s no doubt that women, and increasingly men with young families, really want to have some flexibility. It’s the role of the large employers to really drive that change”.

Lyons welcomes the measures by AECOM.

“There are many reasons for an organisational-wide pay gap,’’ she says. “One of those is the fact that when women are on parental leave for a significant period of time, and there are pay rises given, they miss our purely because they’re not present.

“It’s common sense that if you look after your employees when they are on parental leave, they will come back to work, they will be loyal to you and they will be very productive by and large.

“So therefore it’s a win-win for the organisation. The relatively small financial outlay you are ­having to make, you’ll reap that back in spades in terms of your ­employee engagement, your ­employee productivity and your employee retention. It’s actually a very sensible business decision that AECOM has made.”

The agency results show flexible work arrangements are being increasingly embraced by employers. Men are starting work later so they can be with their children in the morning and help them ­settle into kindergarten and school. Others are starting work earlier so they can be there for the school pick up or participate in afternoon sport

An estimated 68.3 per cent of organisations that report to the agency have embraced flexible work hour practices, an increase of 5.4 percentage points in just 12 months.

“That’s fantastic because flexible working for men, in particular, is really going to help push this whole issue of gender equality, and making it acceptable for men to work flexibly as women have for a long, long time,’’ Lyons says.

“At the moment in Australia, for every hour of unpaid care that men do, women do an hour and 46 minutes, so it’s nearly double. If we see more men being able to work flexibly, for instance, to pick children up from school, do the school drop off or go to the end of year concert that does free women up. That hour and 46 minutes will drop and women will get those extra minutes and extra hours to work if they choose to do so.”

Scott Barklamb, workplace ­relations director with the Australian Chamber of Commerce and Industry, says the agency results show leading employers are translating commitment into action.

“More organisations are recognising gender pay gaps in their business and taking action,’’ Barklamb says.

“Greater flexibility in the workplace also has an important role to play. More managers and staff need to be able to agree, where possible, how work and other commitments can be balanced.”

But ACTU president Ged Kearney says the data highlights the government’s inaction on seeking to reduce the gender pay gap.

“When women are earning $26,000 less than men every year, the rules are broken,’’ Kearney says.

“As a result, women get less super and too many women are ­retiring in poverty. The Turnbull government has done nothing to improve the gender pay gap. In fact, they have made the situation for many women worse as women are over-represented in casual jobs, rely on penalty rates and minimum wages and face discrimination on a daily basis.”

While 68 per cent of employers have flexibility policies, only a quarter of workplaces have manager training to help implement the policy.

“Until flexible working ­arrangements are available in all workplaces, women will be left worse off,” Kearney says.

Employment Minister Michaelia Cash says female workforce participation rates are at a record high and there is a record number of women in employment.

“Year-on-year statistics demonstrate the gender pay gap continues to narrow, but there is still more to be done,’’ Cash says. “Getting more women engaged in the workforce is an economic priority for the Turnbull government. We are putting in place the policies to deliver flexible and affordable childcare, and to support more women become job-ready.”

A breakdown of the statistics shows financial and insurance ­services remains the sector with the highest total remuneration pay gap at 31.9 per cent, although the gap had fallen from 36.1 per cent in 2013-14.

The total remuneration gap in rental, hiring and real estate ser­vices has risen markedly and now sits a close second at 31.4 per cent, a rise of almost six percentage points in four years. The base salary gap is just 20.9 per cent, suggesting discretionary payments such as commissions and bonuses are a factor.

Eight sectors recorded a rise in their gender pay gaps in the past 12 months, including the female-dominated education and training sector, which increased from 9.4 per cent to 10.6 per cent.

Another female-dominated sector, healthcare and social ­assistance, dropped dramatically from 18.1 per cent to 14.7 per cent last year but has increased to 15.7 per cent this year.

Lyons says female-dominated industries believe the gender pay gap does not affect them and ­leaders in these sectors need to take action.

Female representation on boards has stalled at 24.9 per cent, compared with 24.7 per cent a year earlier, with few management teams reporting pay equity metrics to boards.

Lyons says it is disappointing that there had been little change over three years in the gender balance of boardrooms.

“If I hear another chairman say that they would love more women on the board but they can’t find women who are skilled, competent and experienced, I think I’ll scream, because there are plenty of skilled, competent, experienced women out there,’’ she says.

Like Fraser, she cites “unconscious bias” by men.

“They are looking to their own networks and their own networks are, by and large, men,’’ she says.

“They are not looking beyond their networks. They are looking at their all-male club where they go to dinner on a Wednesday night. They’re looking at their ­cycling mates who are, by and large, men. They are looking at their ­tennis club (and) they are not playing mixed doubles.

“They are not looking broader. They are only looking at their own social and business networks that tend to be men.

“What we’re not seeing is cultural change at board level. We are seeing cultural change start to happen within an organisation. We are seeing action start to be taken by executives who recognise that diverse and gender-balanced workforces work better and are more productive.

“But because boards are perhaps that little bit more removed from the day-to-day running of the organisation, they’re not seeing the real change that it makes.

“Men need a chance at being given their first board position. So do women. Men are often using that as an excuse — that women haven’t got board experience. They’re not going to get it unless they are given the chance. Cast your net broader, give me a call, I’ll give you a list of women. It’s just an excuse, an excuse I hear far too often.”