We’ve come a long way in accomplishing equality in the workplace irrespective of demographics. However, bridging the gap in pay disparity between men and women is one we are yet to close. In January 2018, Iceland became the first country in the world to entrench pay parity as a legal requirement.
A 2017 report by the Organisation for Economic Cooperation and Development (OECD) analysed gender pay equality trends amongst its member nations. With the gender pay gap at 13 percent in 2015, Australia emerged as a “mid-performer” in achieving gender pay equality. While it performed better than the OECD average of 14.6%, it has a lot of room to cover with Belgium (3.3 percent), Luxembourg (3.4 percent) and New Zealand (6.1 percent) taking strides in bridging the pay gap.
Policy implementation and advocacy initiatives undertaken by the Australian Government are designed to encourage fair and inclusive workplace environments. However, OECD’s report highlights:
- the higher likelihood of women to interrupt careers to start a family;
- job segregation by gender; and
- employer discrimination
as critical factors contributing to the gender pay gap.
Here’s how you can close the gap:
Implement fair pay
Review the existing salary structure of your employees across different departments and management levels based on their gender, age and experience. If you’re using an advanced HR reporting and payroll system, these reports would be easy to generate and analyse trends.
Close any existing pay gaps by ensuring that all your employees are paid fairly for their investment in growing your company.
Evaluate the hiring process
Hiring talent is critical to building a diverse, inclusive and productive workforce. The Australian Government has a range of grants, assistance and support schemes in place to encourage employers broaden their talent search towards creating a fair and balanced workplace.
Critical to this is a transparent recruitment process wherein hiring managers assess candidates against the desired skills and experience, while providing open feedback for their hiring decision. Another vital aspect of hiring is pay negotiation. Set the salary you’ve budgeted for the role and offer that to the right candidate. People usually aren’t comfortable negotiating, and if the candidate feels shorthanded at the end of the negotiation, it will leave a lasting negative impression.
Offer mentorship and professional development
One of the best ways to retain talent and encourage diversity is to offer mentorship and professional development opportunities. Identify the aspirations of new female employees, and provide guidance on career advancement tailored towards their specific professional and personal goals. Select accomplished female mentors to provide sound counsel in relation to career advancement. Not only will this boost employee engagement, but it will also improve organisational efficiency.
Bring diversity to the boardroom
Women in leadership positions can influence bridging the gender pay gap within organisations. A recent study conducted by Workplace Gender Equality Agency (WGEA) and Bankwest Curtin Economics Centre (BCEC) states: “Organisation-wide reductions in the gender pay gap were recorded for those companies that improved gender balance at the executive leadership level between 2015 and 2016”.
Achieving equalisation in gender representation at the highest levels of leadership requires a medium to long-term effort; thus, requiring time and commitment to create impact. Build a strategic recruitment and internal promotion strategy that aims to foster diversity at the top levels of leadership, whilst accelerating overall productivity.
Flexible working arrangements
One of the major deterrents for women pursuing employment, or a return to employment, following pregnancy is the lack of flexible work opportunities offered by organisations. Enabling women to transition back into the workforce by offering flexible working arrangements will allow them to balance work and family commitments, whilst contributing towards peace of mind.
Build an inclusive culture
Make your employees feel welcome and valued. Create avenues that give all employees their share of voice in the organisation’s new initiatives, strategic formulations or changes in direction.
Pay parity makes business sense:
Better financial returns
According to Diversity Matters, a 2015 report on gender and ethnic diversity in the workplace, companies with higher gender diversity “were 15 percent more likely to have financial returns that were above their national industry median.”
Higher employee engagement
Implementing pay parity with transparency fosters a fair and open work environment, where all employees feel equally valued. Building a sense of mutual trust drives higher employee engagement and improves productivity across all functions.
Reduce turnover costs
Encouraging women to transition into the workforce through flexible working arrangements and paid parental leave allows you to retain strong talent. In turn, you can save on staff turnover costs and the need to hire and train new employees.
Take the first step
Bridging the pay gap is an opportunity for you to lead as a business, whilst paving the way as an example for the industry to follow. Achieving pay parity is one of the first steps to building an equitable and diverse workplace. Ensure your employees know that you value them by creating an inclusive environment where they can flourish to deliver their best.