Understanding the gender pay gap in Australia

understanding-the-gender-pay-gap-in-australia-speech-by-helen-conway.jpg.

The biggest challenge is to change the paradigm. Gender equality is not an HR issue; it’s a business issue. You need to align it with your strategy and you need to bring it to centre stage. Until you do that you’ve got no hope of achieving it. That’s what history tells us because people haven’t done this. They haven’t moved it to centre stage. Helen Conway.

 

Helen Conway is a non-executive director. She is currently the Deputy Chair of Aon Superannuation Pty Ltd and a director of ReachOut Australia and Per Capita Australia Ltd.

She was invited to speak on the gender gap as part of CEDA leadership series in June 2013.

Director, Workplace Gender Equality Agency

 

Understanding the gender gap in Australia speech by Helen Conway

This is a wonderful report and I would like to start by congratulating CEDA for the terrific work they’ve done in putting this report together. It’s the culmination of a number of years’ work.

CEDA has facilitated some very good discussions around women in leadership over this period. It’s so important that organisations like CEDA continue this effort, particularly as we see our public debate so narrow. Our political debate, which really diminishes all of us as Australians, needs to be supplemented by other organisations. That’s why CEDA and organisations like CEDA are so important. We’re very happy in the Workplace Gender Equality Agency (Agency) that we see organisations like CEDA keeping gender on the agenda because we need to maintain the rage because the progress is so slow.

The report really is a call to action. It’s a very substantial report with a lot of information and lots of material around the barriers for women in workplaces and around some potential solutions. The time for talking is over and we need to get on with it. As we say in the Agency, we’re sick of the talk. We really need to move the needle faster than it has been to date.

So today, what I’ll do is not try to go through the report – it’s obviously quite dense and you can see lots of information, which I do urge you to read. I’ll focus on the ‘doing’ part of the report, which is a set of recommendations.

The report is titled Understanding the gender gap and the recommendations in the report are essentially under three headings.

Thfirst heading is enabling workplace meritocracies. A common assumption is that workplaces are meritocracies in Australia. That’s obviously a myth because if you assume a relatively even distribution of talent across the genders, if workplaces were truly meritocracies, you would see far more women in leadership and management positions. The first set of recommendations is all about trying to deal with this issue that we don’t have meritocracies. What are the steps that we can take to make sure that we embed true meritocracies in our Australian workplaces?

The report recommends that organisations undertake awareness and educa-
tion training around unconscious bias. The reality is we all have unconscious
biases. We often don’t know what they are until we do some work around
them. Bias in organisations is a signi cant driver of disadvantage for women.
The fact is there is actually a lot of conscious bias. I always laugh when people 6 say, “there are these unconscious bias training programs and if you take these training programs, you will be (all) right”. The reality is there are a lot of people who are very consciously biased. It doesn’t matter if it is conscious or unconscious – the impact is the same. Having said that, the Agency fully supports working within organisations to make sure that unconscious bias is understood and dealt with.

The second recommendation relates to the gender pay gap – a sustaining problem not just here but globally. The current gender pay gap is 17.6 per cent. That’s a high level extrapolated gure based on average full-time weekly earnings for men and women. It means that women are earning 17.6 per cent less than men. That gure hasn’t changed much over the last few decades. It moves between about 15 and 18 per cent.

When we talk to people, they say, “we don’t have a gender pay gap in our organisation; it’s that other organisation over there”. And we say, “well, a lot of people are saying that but someone must have a gender pay gap because we have this high level extrapolated figure at 17.6 per cent”. What we say in the Agency is, “what you need to do is understand this issue”. There are some people who don’t even know about the gender pay gap. So one of the things we’re trying to do is raise awareness of the gender pay gap. We’re asking organisations to undertake a very simple step. What this recommendation says is to conduct structured pay audits. We recognise that is an onerous task. But that’s ultimately what people should be moving to. But in the first instance, you can undertake a really simple payroll analysis.

On our website, we have a free payroll analysis tool so you don’t have to spend a cent. You can go onto our website, put your data in, and you can conduct a pretty simple payroll analysis of your organisation. That will tell you whether or not you’ve got a pay gap and it will help you analyse what the problems are, and over time you can become more sophisticated in your analysis. So we fully support this recommendation that organisations should undertake pay audits, recognising that perhaps in the rst instance, people would like to start simply with a very plain payroll analysis.

The next recommendation relates to human resources (HR) systems. It’s a really important recommendation because if you look into organisations, you often nd very signi cant gender bias embedded in HR infrastructures. The report recommends that you review some of these processes – recruitment, performance management and promotion processes – to eliminate that bias. What we say is look at all your HR infrastructure. One of the areas where bias is signi cantly embedded is in job evaluation systems. So, look at all your HR systems, look at your recruitment and promotion processes, but also look at your job evaluation systems, your talent management systems and your remuneration frameworks. You will often nd when you unpick these systems that there is bias. Whether unconsciously or consciously, the effect is the same: it’s discriminatory and ultimately it’s one of the drivers of disadvantage to women in workplaces.

The last recommendation really goes to the issue that workplaces still aren’t a level playing eld. In an effort to try to assist people, and women in par- ticular, and giving them a ‘leg up’ in what is not a level playing eld, what’s recommended is that organisations put in place mentoring and networking opportunities for women. We support that but in the case of mentoring, we think organisations should go a bit further and really should embrace spon- sorship. Sponsorship is a much more active form of mentoring where the sponsor actively advocates for the person they are sponsoring. So, until we can get through what is a fundamentally embedded disadvantaged position for women, there are some special initiatives that need to be undertaken like mentoring, sponsorship and networking opportunities to give women a bit of a leg up until that level playing field comes along, which will hopefully come along more quickly than has been the case in the past.

The next set of recommendations is under culture and, as we know, culture is a significant driver of change in organisations. It is very hard to change culture but if you don’t attack culture, you won’t get change.

The first recommendation talks about breaking down workplace gender stereotypes. We still have people who say to us in the Agency that managers should be male and they have to work full-time. In 2013, that’s a startling statement, but that’s what people say to us. Signi cant gender stereotyping is found in statements like this: “Women have got a problem – they’ve got to care for their children, so we can x, or help them x, that problem by giving them part-time work.” Caring is not a problem for women. Caring is a respon- sibility of families. Part-time work or exible work arrangements generally should be available to all – men and women. You can see how the gender ste- reotypes are embedded in the structures and attitudes within organisations.

The next two recommendations really go hand in glove and they are significant because the suggestion is that you need to review how you organise your work in the workplace and you need to design exile workplaces. There’s absolutely no doubt that our workplaces are currently structured for a society long since gone.

If you think about how we live today, workplaces are not accommodating that. So until we take a fundamental review around how we should live and work in society, workplaces will continue to disadvantage 6 women. Flexible work isn’t necessarily easy to manage. But the payoff of flexile work practices is signficant. Until flexible work practices and flexible careers are mainstreamed and considered ‘business as usual’ for both men and women in Australian workplaces, you won’t get gender equality.

If you do an analysis of the lifecycle of women in workplaces, you will see – particularly at graduate level – a healthy recruitment level, sometimes 50:50, sometimes greater in some sectors. But the same-old, same-old occurs: you will see as women get to childbearing age and beyond the numbers fall off signi cantly. One of the reasons for that is the inability of workplaces to come to grips with family and embed exible work practices, so have a full range of exible work practices but also facilitate exible careers. By exible careers I mean allowing people to move in and out of the workplace – men and women who will do that for different reasons, not just caring for children – and not disadvantage their career.

The next category is engaging leaders and introducing accountability. The report talks about putting in place clear governance, accountability and leadership, and embedding personal responsibility into behaviours and actions. This is where the Agency thinks we can really drive change. There’s abso- lutely no doubt that people have not treated gender equality as a central business issue. They see it as something peripheral; something you ick to the HR department. This issue will not have credibility until it is treated as a central business issue. If you treat it that way then you will apply to it the same sort of framework and structure that you apply to any business initiative that you want to achieve. If you take a basic model of leadership accountability, which is applied in any initiative you want to achieve, if you did that in rela- tion to gender, you might have some hope of improving the rate of progress. By leadership, I mean the leaders in the organisation advocating for, and role modelling, gender equality initiatives.

I remember a story in the Agency of a CEO of a very large organisation who used to take every second Friday off to look after his grandchildren. He said to his executive assistant she was sworn to secrecy. He said, “I’m off doing very important work; don’t tell anybody I’m looking after my grandchildren”. How powerful would it have been if that CEO had said openly to the organisation, “I’m going to take every second Friday off to look after my grandchildren”? He might have actually authorised much fairer and more balanced behaviour in his organisation. This is the power of leadership and we do not see it in organisations at the moment. If you want to achieve anything, you have got to have leadership.

Organisations need to look at their particular operations and try to understand what the barriers are to gender equality in their particular organisation, and then put in place action plans to deal with those barriers. Organisations will differ one to the other. What’s a barrier in one organisation may not be a barrier in another. You actually have to do the diagnosis. There are some really simple diagnostics around that you can use to do this. Determine the problems and how you are going to x them, put in place action plans, and transparently report your progress across the organisation and externally against those plans. If you are really committed to this, you won’t have a problem with reporting externally what you are doing.

It’s very interesting. I had a discussion with some organisations recently about setting targets for the appointment of women to management and leadership positions. Some of them said, “we don’t think that’s a good idea”. Others said, “we will set targets but we don’t want to tell anybody”. Why not? We report all sorts of metrics: we report financial metrics, we report safety metrics. If you truly believe in something and you are making a genuine effort to achieve it, you should have no trouble with reporting your progress.

Of course the final component is accountability. As we know, many good initiatives in organisations flounder on the rock of poor accountability, particularly as you go down into lower management ranks. What we say is: “you must hold your managers accountable for the outcomes in the gender space”. While this is crude, we say you should tie managers’ remuneration to achieving those outcomes.

So that’s the set of recommendations. It’s a terrific set of recommendations and if people were prepared to adopt those recommendations and really substantively commit to them, we would see big change in Australian workplaces.

So what is the real challenge for us? The biggest challenge is to change the paradigm. Gender equality is not an HR issue; it’s a business issue. You need to align it with your strategy and you need to bring it to centre stage. Until you do that you’ve got no hope of achieving it. That’s what history tells us because people haven’t done this. They haven’t moved it to centre stage.

I don’t want to spend a lot of time going through all the research that shows that at a national level and organisational level the bene ts are huge. I could bore you for hours about all the research that has been done. You don’t need any more research. The case is clear. But it does mean we have to get out of our comfort zone, we’ve got to think broadly and we’ve got to act expansively.
We often see a situation where people will say in an organisation, “the way we’ve done things in the past has worked really well so we don’t think we need to change it very much”. Probably in response to the fairness and equity argument they say, “we should put a few women in a few positions so we can tick that box”.

That’s pathetic. You certainly won’t reap the benefits of gender 6 equality if you are going to do it that way. We have to chance our arm. We’ve got to take some risk. As a friend once said to me, “if you aren’t living on the edge, you’re taking up too much room”. I think we should live on the edge and take up less room and get on with it. It is clear we need to act.

An example of where we don’t think broadly and act expansively is the debate around women on boards, which gets so much airplay at the moment. The Australian Institute of Company Directors (AICD), with whom the Agency has a good relationship, go around beating their chest saying, “look at the improve- ment of women on the top 200 boards. This is terri c progress.” You have a look at those appointments. Of course it’s good to see progress, we applaud that, we applaud the efforts the AICD has made. But the pool from which they are drawing still remains very small. There are a lot of women out there who are highly talented and extremely well educated who are t for those sorts of positions. But the blokes aren’t prepared to chance their arms; they are not prepared to take the risk. They are looking for the safe people. So we have to take some risks here. We have to think more broadly. We have to think differently about gender. We can’t keep doing the same things and expect a different outcome.

The biggest step in our mind is that you really do have to reimagine and rede- sign workplaces. I made reference to this earlier. We need to have workplaces that are sustainable into the future. So if I gave you all a plain bit of paper now and said, “design a workplace for 2013 in Australia and beyond, one that’ll sustain and keep us competitive into the future”, I don’t think you would design workplaces the way they look today. I think you’d design workplaces that take into account the way we live today. We would take into account the fact that caring responsibilities are shared. We would take into account a whole lot of different things – different needs and aspirations that employ- ees have and the fact that people want to be able to accommodate balance in their lives. If people have balance in their lives, there is a signi cant social payoff.

So this is the challenge. It is a long-term game, we recognise that. And there is work that is being done by the Federal Government in relation to reimagin- ing workplaces, and that work will continue. We think this is critical work. It’s a long-term game, but we have to start sooner rather than later. There’s no reason to delay.

What should you do? You can get on the journey. It starts with each of us in this room. When we go back to our workplaces, what are we going to do? What’s the tangible thing that we will do to improve gender equality in our workplaces? What are the actions, what are we going to do?

It’s not limited to the workplace. The reality is we won’t see signi cant changes in workplaces until we see signi cant changes in social attitudes. We don’t just live in workplaces; we live in families, we live in communities, we do a whole lot of community work. We have an obligation individually to make sure in all those arenas that we behave in a fashion that is fair and equitable – a fashion that supports gender equality.

People say Australia is an egalitarian society. If you look at the gender statis- tics, it doesn’t appear to me that that’s the case. The challenge for us is to make it an egalitarian society. So that’s what we want you to do.

What is the Workplace Gender Equality Agency going to do to help? We have a statutory mandate to assist organisations to improve female workforce par- ticipation and improve gender equality within Australian workplaces. That is our precise mandate. We are both a regulator, and we are an educator and in uencer. In our regulatory role, all organisations in the private sector with 100 or more employees have to report to us annually. But, most importantly, in our educator role, as an implementation agency, we’re here to help people achieve gender equality. So our focus is on tools, resources and education to help those organisations – not just those that have to report to us but the broader Australian community – to achieve gender equality. And of course, we have a very signi cant mandate under our legislation to raise awareness and understanding and public debate around this issue.

In December last year, a new Act3 was passed that governs our Agency. We were the Equal Opportunity for Women in the Workplace Agency and we’re now the Workplace Gender Equality Agency, hence the name of the Act. There were lots of changes under that Act for us but for today’s purposes, the signi cant issue is the change in reporting that organisations will undertake. Previously organisations reported to us on programs, they reported to us on input. Under the new legislation they will report against gender equality indicators and these comprise outcomes.

What we’ll have over time is an incredibly powerful set of data. We’ll have an unprecedented picture of gender equality in Australian workplaces. Indeed, it’s world-leading. There is no other country in the world that will have this data. We’ll use the data to develop benchmarks. So these have got nothing to do with compliance with the legislation, they are simply educational benchmarks. We’ll disaggregate the data by organisation size and by sector. Those who report to us can see how they’re performing against their competitors in these key gender areas. They can work with us on how to improve those areas where they are falling behind. We think this is the absolute engine room of the legislation, and certainly the biggest driver of change the Agency has 6 ever had.

Let me finish up on what is the economic imperative. I don’t think anybody in this room would doubt that in Australia we have a very signi cant productiv- ity and competitiveness challenge at the moment. We see the mining boom coming off its peak and we see traditional manufacturing very challenged in this country. So we need to do a lot of work to broadly re-engineer some of the fundamentals our economy. Australia will not remain competitive if we don’t deal with that. That has to happen irrespective of what government is in power.

Coincidently with this is the compelling research about the benefits of gender equality. I will just quote one piece of research that is probably the most recent and relevant Australian research in this area. That’s the work done by the Grattan Institute last year: the game changers report by John Daley. He looked at what three levers Australia could pull to improve its productivity. One of those key levers is related to gender equality.

John Daley says in that report that if Australia increased its female workforce participation by six percentage points – which would be comparable to Canada, which is a very similar economy to ours which means this is an achievable goal – we would increase annual gross domestic product (GDP) in Australia by $25 billion. So this is powerful evidence and a compelling reason to promote gender equality in Australia. So what we’re saying is as we reset the economy, gender equality should be right at the centre of that debate. This is a very signi cant opportunity that I don’t think Australia can afford to miss.

So we exhort everybody to do what they can in their area to improve gender equality. We look to an improved national debate around how we can reset our economy. And with that broad call to action, I’d like to formally launch CEDA’s report and congratulate them on an outstanding publication.

endnotes

1 CEDA 2013, Women in Leadership: Understanding the gender gap, Melbourne. 2 www.wgea.gov.au

  1. 3  Workplace Gender Equality Act 2012
  2. 4  Daley, J 2012, Game-changers: economic reform priorities for Australia, Grattan Institute, Carlton, Victoria.

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