We’ve gathered the data, now what? Why reporting isn’t enough when it comes to gender pay gaps

Years-long stagnation of gender pay has finally come to an end, but employers will have to do more to consolidate the gains, says WGEA.

Since 2013, employers of 100 or more employees have been required to report to the Workplace Gender Equality Agency (WGEA) on their gender equality performance. Employers are judged against the following six performance metrics:

1. Gender composition of the workforce
2. Gender composition of governing bodies of relevant employers
3. Equal remuneration between women and men
4. Availability and utility of employment terms, conditions, and practices relating to flexible working arrangements for employees and to working arrangements supporting employees with family or caring responsibilities
5. Consultation with employees on issues concerning gender equality in the workplace
6. Sexual harassment, harassment on the grounds of sex or discrimination

Over the past few years, progress has been slow, if not stagnant. In the most recent reporting period (2022–2023), workplace gender inequality has been part of the national conversation – most notably foregrounded by the passage of the Closing the Gender Pay Gap Bill in March. Therefore, it’s reasonable to expect that employers have been taking the issue more seriously.

And the data do bear this out – to an extent.

While significant progress has been made on certain indicators – for instance, this reporting period saw the second-largest decrease in the gender pay gap since 2012 and more women are being promoted to managerial positions – progress in other key areas has been slow.

WGEA chief executive Mary Woolridge said Australia is at a turning point in its treatment of workplace gender equality, as the true impacts of the Closing the Gap Bill will be realised in coming years: “This Gender Equality Scorecard [is] a critical line in the sand, marking the commencement of the implementation of these reforms.”

“The environment is ripe for change. Employees and the broader community are no longer abiding by age-old excuses from decision-makers refusing to value women in the same way they value men. Employers who do not grasp the opportunity will be left behind,” said Ms Woolridge.

Let’s unpack the data:

(Under)achieving on gender pay

As noted, the 2022–2023 reporting period saw strong performance on the gender pay gap. Though it might not sound all that impressive, the gap was reduced by 1.1 per cent, making it the second-largest single-year drop since the series began and marking a change from the stagnation of the past two reporting periods.

A drop of even 1 percentage point could feasibly have major economic ramifications. For instance, a 2018 KPMG report found that halving the gender pay gap would add $60 billion to Australia’s GDP by 2038. The gap now sits at 21.7 per cent, the lowest it has been since WGEA has been on the job.

The report pointed to an increase in the proportion of women in management and in upper pay quartiles as key drivers behind the pay gap action. The proportion of women being promoted and appointed to managerial positions is higher than the proportion of women managers overall, suggesting female representation should continue to increase.

That said, female underrepresentation still scales with seniority. Most concerningly, the proportion of women chief executives decreased slightly since the previous reporting period (currently at 22 per cent), while the proportion of women in board seats stayed the same at 34 per cent. One in four boards have no women, while only 25 per cent have gender balance.

Further, performance on gender pay remains fractured across industries. While every industry and nearly 73 per cent of employers have a gender pay gap of larger than 5 per cent in favour of men, certain industries are disproportionately underperforming.

Construction, for instance, has an average gender pay gap of 28.3 per cent and a median gender pay gap of 31.8 per cent. Perhaps surprisingly, female-dominated industries, while still having gender pay gaps in favour of men, are three times less likely to have analysed their payrolls for gender pay gaps and to have taken action in the past year than male-dominated industries. Accordingly, the WGEA wants a greater uniformity of action.

We’ve got the data, now what?

When drafting the Closing the Gap Bill, transparency was seen as the guiding light for better action on gender pay. The thinking goes: If employers know their gender equality performance will be shared publicly, it will be in their interests to demonstrate positive change.

Though employers subject to the WGEA reporting requirements have been gathering the data for years, this most recent report reveals that too few are taking meaningful next steps.

According to the WGEA, 55 per cent of employers analysed their pay gaps, while only 60 per cent of those employers acted on the results of the analysis. Further, only 45 per cent of employers are setting gender equality targets.

Even when employers are taking that next step, too often, they set their sights short of meaningful change. For instance, the most common action taken following a gender pay gap analysis in the 2022–2023 reporting period was “correcting for like-for-like gaps”.

As noted by WGEA: “[Like-for-like correcting] links to instances of unequal pay, which is a legal requirement and only one driver of the gender pay gap. While it is encouraging and vital to further success to see increases in analysis and action, the aim is to ultimately see broader actions that will address the full range of drivers of organisational gender pay gaps.”

Moving forward, WGEA called upon employers to see gender equality data gathering as a preliminary first step, as opposed to an end unto itself. Meaningful change, WGEA said, should be driven by employee consultations.

While 47 per cent of employers reported that they consult their staff on gender equality, only three in 10 employers have a formal policy or strategy in place to do so. This figure has not changed since the previous reporting period.

“This is a simple and effective way to start demonstrating to employee’s commitment on gender equality,” said WGEA.