Gender pay gap at record low: Let’s keep the momentum going

The gender pay gap has hit an all-time low of 21.7 per cent. As we edge slightly closer to equality, the momentum must continue if real change is to be achieved.

The Workplace Gender Equality Agency (WGEA) recently released its Gender Equality Scorecard 2022–23, highlighting the progress made in gender parity.

The results turned out to be positive, with a record-low gap recorded. However, more can be done. HR Leader recently discussed how reporting on gender pay gaps within organisations isn’t enough, and real change will come from action being taken.

Transparency could prove to be an effective tool in combating the pay gap. Sommer Nisbet, general manager and solutions director at TDC Global, noted that discussion is crucial to influencing change.

“There’s been a longstanding taboo around discussing salaries in the workplace. Cultural norms, assumptions about ‘winners’ and ‘losers’ in pay discussions, and the slow alignment of workplaces with principles of equity and inclusivity have all played a part. However, transparency on this front will be instrumental in reducing gender pay gaps,” commented Ms Nisbet.

“The impending changes to the Workplace Gender Equality Act signify a significant shift in Australia’s workplace culture. For the first time, pay will be out in the open, ushering in a new dawn of transparency that organisations need to prepare for. While this change may seem daunting, businesses must realise that it’s a chance for them to improve, not merely a challenge to overcome.”

Without transparency, we run the risk of harming trust and morale. These are two crucial aspects of running a healthy business, which makes promoting transparency all the more important.

“The key benefit of pay transparency is that it moves employees away from relying on assumptions to working with facts. When people don’t have all the facts, it is human nature to fill in the blanks. These assumptions often lead to disengagement for employees of all genders, which can erode productivity and fuel attrition,” said Ms Nisbet.

“It’s not just about knowing where the gender pay gaps are but understanding why they exist. Is it due to a lack of women in leadership roles? Or is it owing to certain professions being undervalued? Identifying the ‘why’ is the first step towards achieving pay equity.”

These themes must be promoted from the top to the bottom of organisations. Cohesion is an effective way to drive important messages home.

Ms Nisbet continued: “Many leaders may be on edge about pay transparency as it can be seen to increase conflict. However, conflict is a natural occurrence in any organisation, so discussions around pay should not seek to avoid conflict but rather resolve it.”

“Correct preparation can ensure employees feel heard and are assured that action has been taken from their input. Lack of preparation leads to faulty assumptions, simmering conflict, and declining employee sentiment. So, while the pay conversation is coming, how it impacts organisations is largely related to how they prepare for this change.”

She concluded: “Constructive and respectful salary discussions should be integral to the employee experience and require preparation, active listening, and empathy. Organisations can prepare their staff for these conversations by investing in programs to build psychological safety, effective communication, and conflict resolution skills.”