Leaders urged to get ahead of new pay gap legislation

Business leaders are being encouraged to take action in addressing any gender pay gap within their organisation ahead of government legislation coming into effect.

Last month, the government introduced the Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Bill 2023. If passed, the bill will require employers with 100 or more workers to reveal how much they pay men and women.

The move is set to improve transparency and help try narrow the gender pay gap, which currently sits at 14.1 per cent.

In this exclusive interview, HR Leader chats to Erin Brown, vice-president of service delivery at Ceridian, on how leaders can get ahead of the government’s new gender pay gap legislation.

HR Leader: What changes can leaders make around pay compliance in light of the new pay gap legislation? 

EB: The government’s new gender pay gap legislation will add much-needed transparency to the compensation process and help shrink the earnings disparity between men and women. It’s also an opportunity for leaders to show their commitment to equity in the workplace.  

To start, it’s crucial that leaders understand their current position. Use salary data to perform a comprehensive audit of your organisation’s compensation structure and use the findings to identify areas where you’re not in compliance. 

From there, organisations need to review and revise current pay ranges or design them from scratch if necessary. It’s important [to] make them reasonable and fair and to help employees understand how those ranges were decided. Transparent communication is key – openness around salaries can improve morale, motivation, and trust.  

Finally, organisations need to arm people leaders and managers with the tools and information they need to confidently communicate about pay equity with their direct reports.  

HR Leader: Can you speak to the importance of pay equality and why progress in this space is imperative at the moment? 

EB: An organisational commitment to pay equity demonstrates to workers that you value every employee, regardless of gender. The gender pay gap affects everyone; it places an unfair burden on women supporting families, and it creates inequity in the recruitment process. Pay equality isn’t just important; it should be considered a basic right for Australian workers. 

It’s also imperative for organisations that want to be seen as an employer of choice. In a competitive labour market, organisations that commit to transparent pay equity will be more likely to retain staff and reduce turnover, while expanding the available talent pool when filling open roles. 

HR Leader: How can leaders ensure internal compensation, recruitment, and performance management processes create equitable workplace environments? 

EB: Knowledge is the key to ensuring equity across compensation, recruitment, and performance management processes. Understand and scrutinise the data in your organisation and confront any uncomfortable findings. If you don’t have access to reliable pay and demographic data, find the right technology solution for your organisation to gather it. 

Having a clear understanding of the gaps gives an organisation the opportunity to be both transparent and accountable and to take steps to resolve inequities. Challenge the status quo of recruiting “in our own image”, introduce diverse recruitment and performance management panels, and educate at all levels of the organisation so that managers build equity into day-to-day people decisions. 

HR Leader: What can HR managers specifically do to encourage the conversations/movement towards gender equality and equity in-house? 

EB: To encourage frank conversations and movement towards gender equality and equity, HR managers should lead by example. Encourage your organisation to put these values at the centre of the employee experience, and coach your leaders to do the same.

There are also concrete steps that organisations can take to move closer to gender equality, including inclusive recruitment and promotion processes, gender-neutral parental leave policies, normalising flexible working arrangements to support work/life balance, and investing in employee development and education programs. 

HR Leader: Do you have anything else to add? 

EB: Recognising gender inequality, and taking steps to resolve it, is imperative in today’s world of work.

Technology, like a comprehensive human capital management (HCM) software solution, can make the process more efficient and equitable by providing companies with real-time, accurate data and the tools to monitor progress and adjust as needed.