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04 June 2018

Gender pay gap ‘tough love’ – Australia sits in the shadows of the UK

Virginia Haussegger, Journalist and Director of the 50/50 by 2030 Foundation

Australia’s current gender pay gap is 15.3%, or approximately AUD $26,000 dollars per year

Australia could do much more to tackle the gender pay gap
Australia could do much more to tackle the gender pay gap

As a television journalist for over 25 years I had a fixation with published lists. For as long as I can remember I collected all sorts: power lists, government ministry lists, CEO, top salary earner lists – anything that gave me data on women’s leadership progress. Or lack of it. 

Now as Director of Australia’s 50/50 by 2030 Foundation I get to indulge my fixation with lists and numbers. And right now the most fascinating numbers story is coming out of the UK, as its pay gap ‘genderquake’ reverberates around the world.

In Australia we like to think we’ve pegged pay inequity as a major issue, yet our approach shrinks in the shadows compared to what the UK has forced companies with over 250 employees to do. By 4 April some 9,000 companies were required to publish their gender pay gap data on a somewhat unassuming UK government website. So far 1,500 have failed to comply. But among the 7,500 who have added their name – to what is effectively a public salary-shame-file – there are some stunning numbers.

Here are just some of the headline grabbers: Goldman Sachs UK pays women on average 56% less than men. And although that ‘sprawling moneymaking machine’ gives 96% of women bonus payments, they average 72% less than men’s. Virgin Atlantic Airways has the same fat gap in bonus payments, and an average hourly pay rate for women that is 58% less than men. Over at EasyJet its 52% gender pay gap revelation solicited an amusing press release, as the company ducked for cover, saying: ‘This is not about unequal pay’. Instead the discount airline chose to shift blame onto the aviation industry for failing to train more female pilots.

Meanwhile, women bankers at Barclays were no doubt furious to learn they’re paid on average 48% less than men, with bonus payments 79% less. But the data is even worse at HSBC, where women’s average hourly pay rate is 59% lower than men’s, and even though a higher rate of women than men receive bonus payments, their cut is 86% lower.

As far as lists and numbers go, the UK government website is a ripper, bursting with rude shocks and naked exposure.

But no nation can take smug comfort from this fallout. Indeed we ought to congratulate the UK for its bold and muscular action.

Australia’s Workplace Gender Equality Agency (WGEA) is widely regarded as setting a global standard in the gender tally stakes. It collects data on six key gender equality indicators, including pay gaps, from all organisations with over 100 employees (excluding public sector). For the past four years that collated data has been released in the form of a gender equality ‘scorecard’.

But despite the New York Times suggesting, ‘Australia recently mandated gender pay gap reporting for most companies’ – we didn’t. And don’t. Australia has not been quite as bold, nor as courageous, as the Brits in naming and shaming.

Australian legislation actually forbids a company’s individual salary details to be made public. Instead the data is released as a national average and broken down by industry sectors. There is no direct finger pointing at the worst offenders, as we’re not privy to that level of detail.

As a single figure, Australia’s current gender pay gap is 15.3%, or approximately AUD $26,000 dollars per year. This means full-time, female workers earn on average 15.3% less than full-time, Australian males. But this is rapidly becoming a limp assessment of what is actually happening in the pay office, and how decisions are made when remuneration rates are set. All that figure really tells us is that, generally speaking, not much has changed in Australia over the past 20 years when it comes to pay parity. The pay gap has hovered between 15 and 19% for two decades, with irregular peaks and troughs. Our smallest gap was in 2004 (14.9%), and our widest gap was in 2014 (18.5%).

According to PwC’s latest Women in Work Index, Australia has slipped down the OECD ranking to 16th position, just below the UK. The same report suggests closing the gender pay gap could result in a $69 billion gain to Australia, but as it stands there is no national framework to make that happen.

Many nations could do well to follow the UK’s tough lead. It’s too easy for some of the worst offending companies to hide behind generalised industry pay gap data while assuming all is well in their own backyard. Invariably it isn’t.

Libby Lyons, Director of Australia’s WGEA, says some company CEOs are ‘flabbergasted’ when they conduct a gender pay gap analysis of their own company and find that not only do they have significant gender inequity when it comes to remuneration, but the truth of it was hidden even to the executive team. Which is a stark reminder that just as deeply rooted unconscious bias and negative gender attitudes are woven into the fabric of most organisational cultures, so too are myriad assumptions about equity.

Lyons and her team have made a gargantuan effort to encourage business leaders to voluntarily audit their own pay data, and now 38% of those required to report to WGEA do a detailed gender analysis. For those enlightened few, the data alone has been sufficient motivation, well before any public shaming, to take drastic action.

According to Lyons, the popular Australian brewer Lion was ‘astounded’ when it uncovered its pay gap and ‘action soon overcame astonishment’. The company moved quickly to give 1,600 employees a pay rise, costing Lion more than AUD $6 Million.

Not surprisingly, all employees were more than happy to toast that.