What is your business doing to improve its gender pay gap?

Ladies, update your resume, there are gaps for you to fill. 

The gender pay gap report has just been released by Workplace Gender Equality Agency (WGEA), and the statistics are damning. 

‘Gender pay gap’ (GPG) implies the difference in salary between a male and female colleague of the same title, but the data reports the difference in the number of males and females employed by a business, especially in senior roles.

Spoiler alert if you haven’t read the report, over 60% of Australian medium and large businesses hire more men and in more senior roles than women. 

England saw a positive change from publicising its GPG data, which is why the Australian government made the decision to follow suit.

With naming and shaming businesses for their inequalities comes structural change. There are internal structures and biases that businesses will need to address to hit their GPG targets. 

Mothers are more likely to take time off work or reduce their work hours when they have children (Australian Institute of Family Studies, 2023). This leads to mothers reducing their earning potential by 55% over the first five years (HILDA, 2023). 

As businesses increase their flexible work offerings the rise in women returning to the workforce has increased. Now 71% of dual-parent households, with kids under 15, have both parents working, compared to only 56% in 2000 (AIFS, 2023).

But not all women want or have children, therefore having a womb is not the sole reason for lack of female representation in senior roles. 

According to Diversity Australia, 78% of recruitment is influenced by similarity bias. Therefore, with more men in senior roles, they are more likely to hire other men to fill senior roles. This is a bias that must be addressed by businesses if they want to improve the GPG by next year. 

Dentsu Australia proudly pays its people equally, but like the majority of Australian businesses, it has a gap to fill when it comes to equal representation in senior roles. The business has set a powerful target of 50% female senior leadership by 2025. 

Like most businesses, it will need to assess the structural changes it can make. What will really shift the GPG figures is businesses wanting and respecting the need for diverse leadership. 

Using IQ and EQ to close the gender pay gap

Businesses can look at improving their gender pay gap data through two lenses, IQ and EQ.

Businesses with an IQ lens will set gender targets purely to improve their GPG data in time for next year. This lens is short-term focused as it doesn’t account for people movement nor give the people in the organisation confidence in the recruitment process. 

Businesses with an EQ lens on improving their GPG data will look to make structural changes to their business and hiring processes in the knowledge that a diverse leadership team will enhance performance, increase employee retention and advance innovation (indeed, 2023). 

Offering flexible work environments will help lure more women to apply for roles at a company, but it is equally important to foster female talent within a business to have a pipeline of female leadership. This can be done by identifying potential leaders early and fostering them through mentoring and leadership courses. 

Dentsu is focused on an EQ approach to all business decisions as they design their client offering and organisational structure around people.

What’s your business doing to improve its GPG?

Phoebe Carre is the creative solutions lead at Dentsu.