What happens if we ever get to a zero gender pay gap? If we do hit that milestone, can we declare victory?
The answer is: not really. Reaching anywhere near zero will be a feat, but not the be-all-and-end-all. While a bellwether of how we value women’s economic and corporate contributions, eradicating this discrimination won’t mean instant equality. More hard work is needed not only to achieve pay equality, but create workplaces where women have equal opportunities.
Yes, we are a long way off parity. But it’s worth kick-starting the discussion. Especially when more countries are beginning to push for ambitious targets. Canada, France and Spain are among nations that require in-depth analysis of gendered wage information, and more than half of Organization for Economic Cooperation and Development countries now mandate that private sector companies report their pay gap.
Australia last week unveiled individual compensation gaps for companies with at least 100 employees. As expected, the data showed most still pay women less than men — and in some instances, a lot less. But not much attention was given to that fact that the Workplace Gender Equality Agency, which compiled the data, has set a target of -5% to +5% for the gender gap. Of the 5,000-plus companies that reported, 30% are already there. Despite the dire predictions that it will take more than 100 years to reach parity, these firms show it can be done.
Very few countries have come close to that, and even if they have, it might be hard to tell given how calculations vary greatly across geographies.1 Australia’s own gender equality agency has the nation’s pay gap at 19%, while the OECD puts it at 9.9%, slightly below the spread of countries under its ambit.
We should start thinking about this as a tool to revamp the working environment so women can thrive. Mary Wooldridge, who heads the agency, says employers will need to keep striving for a “gender equal experience in the workplace,” even if the day comes when men and women are paid the same.
“We’ve been very clear that the target is ultimately zero; but that’s not the end of it,” Wooldridge told me. “That’s an acknowledgment as part of the journey that work needs to continue. It’s not declare victory and leave, give up on the issue. Organizations still need to be vigilant about the work they’re doing.”
That involves everything from recruitment, day-to-day engagement in the workplace, career paths, and the flexibility to allow for outside responsibilities. The message is that while employers mustn’t lose sight of closing the gap, there is a lot more at stake that needs to be addressed to attract and nurture the best talent and create a level playing field.
“This is not cut and dry, we must immediately hit the plus or minus 5%,” Lucy Steed, chief executive officer of Melior Investment Management, a Sydney-based firm focusing on impact investing, told me. Steed is spearheading efforts to make Australia’s largest companies hit a pay gap for all employees of plus or minus 5% by 2030. It will force firms to focus on bigger issues, like women in senior positions, and role models for flexible working at the top, she said.
And that is harder because it’s about changing mindsets and cultural norms that are preventing women from reaching gender equality and from occupying more positions of power in organizations. It’s even trickier nowadays as companies — particularly in North America — are retreating, at least publicly, from diversity and inclusion initiatives.
Still, it can be done. There were some positive nuggets in the Australian report. Grant Thornton was among the few firms with a compensation spread that favored women. The accounting and consulting firm has instituted flexibility policies to make sure it retains female employees, according to The Australian Financial Review.
There is a greater takeaway here. Fair compensation is just one pillar of a business’s commitment to gender equality. As good a headline as the pay gap is, it is merely a stepping stone. As more countries start reporting the gender wage disparity, we should ask not only how do we eradicate it faster, but what it will look like once we get there. We will be winning a key battle, but not the war.
1For example, Belgium’s gender wage gap, according to the OECD, is 1.2%. But the OECD says the statistic may not provide a complete picture because it excludes significant sectors with substantial pay gaps, such as agriculture, mining, real estate, professional, technical and scientific activities. Consequently, the low gender wage gap is significantly influenced by the overrepresentation of sectors with robust collective bargaining and strict collective agreements.
A message from Advisor Perspectives and VettaFi: To learn more about this and other topics, check out our most recent white papers.
Bloomberg News provided this article. For more articles like this please visit
bloomberg.com.
Read more articles by Andreea Papuc
