How to create a workplace that shrinks the pay gap
Today is (un)equal pay day. It’s a day that signifies the difference between women’s and men’s average full-time base earnings to work out how many additional days women need to work for the same pay as men.
In 2019, women still have to work on average an additional 59 days a year, on the house, to get the same pay as men.
This is a really important metric because it provides an indicator to gender equity, and specifically, how fair remuneration outcomes are for men and women.
We know that inequity starts early. Research by the Workforce Gender Equality Agency (WGEA) shows that on average male graduates out-earn their female counterparts by 4.8 per cent. And, given the compounding nature of super in particular, any inequity that may seem small at the start of a career, has a significant impact at the end.
The unpaid leave many women take following the birth of a child further impacts superannuation. Right now the fastest growing group of people becoming homeless is women over 55, an increase of 31 per cent between 2011 and 2016. Sadly, this isn’t surprising given women retire with 40 per cent the super of men and tend to live longer.
Closing the pay gap
At South East Water in FY 2014/15, we had a pay gap of seven per cent in our non-Enterprise Agreement roles. That means men had been earning, on average, seven per cent more than women for doing similar work. While this was better than the national pay gap at the time (17 per cent) we knew we needed to do more to make our workplace more equal.
Over the last couple of years we’ve really scrutinised our remuneration data and carefully examined our work structures to determine the cause of this gap. As a result, we’ve put measures in place to ensure we’re paying everyone fairly, regardless of gender.
Let’s talk dollars
We recently partnered with remuneration specialists Mercer to do a comprehensive analysis of the size of all these roles and cut the data by gender to see if there was a gap (spoiler, there was).
We then tried to understand how experience and capability may overlay on and impact this data. A simple exercise like having the average salary by job level, split out by gender helped us to see in black and white where there was a disparity and challenged us to see if there was a good reason for this (spoiler, there wasn’t).
I’m proud to report that right now we have less than a one per cent pay gap.
Our challenge now is to increase our sample size, as we still have too few women taking up these leadership roles, a problem we are currently focussing on as a priority.
We recently formalised our commitment to flexible work through our partnership with FlexCareers to embed and normalise flexible working and the launch of our Flexible Work Framework which we have had a fantastic response to. I wrote about that in an earlier blog – you can check it out here. Right now, 83 per cent of our employees (like Stella, Praveen and Sri, who are pictured below) access some form of flexible work – so we're definitely on the right path.
Our hope is this provides fair and equitable options for all employees to balance their work and life commitments, increases productivity and in turn will increase the proportion of women in our leadership roles.
Superannuation, leave…and expectations
We’ve also recently introduced some significant enhancements to our leave policies to better support parents.
For starters, we’re now paying superannuation on unpaid periods of parental leave up to 52 weeks. This is a tax that has historically disadvantaged women disproportionately to men. We’ve also removed ‘primary’ and ‘secondary’ carer labels and provided 14 weeks paid parental leave to both parents. They can use this leave at any stage of the first 12 months of their baby’s life (an increase from two weeks for the secondary carer).
Our aim is to help families share caring and home tasks equally and empower both parents to take an active role in the first year of their child’s life. We think families should be able to make their own choices about how they care for their family, based on what works for them. We hope that by encouraging both parents to be active at home, they can both be active at work.
We also know that generational shifts mean that people entering the workplace now really care about equity. Parents want to be equal participants in home and work life, and this type of arrangement is going to become even more important as they choose employers that support this.
This was certainly the case for Amy Fletcher, pictured below. "When choosing a business to work with, finding an employer that supports and encourages flexible work was part of the criteria," Amy said.
What does this mean for our people?
We took a human-centered design approach to developing these solutions to close the pay gap. For us, that meant empathising with employees, understanding their perspectives, and ultimately keeping the employee experience at the heart of all our decisions.
We made this process much easier as we had a model employee to focus on as we were making these changes – in fact, we had two.
Amy Miles has worked with us for six years and is currently pregnant with her first child. Her partner Chris also happens to work with us. Our policy changes mean both Amy and her partner can take 14 weeks paid leave each, at any stage of the first year of their child’s life. They can take it in a block, overlap or alternate turns as the ‘lead’ parent.
Importantly, Amy won’t miss out on the super she would have earned had she not been on leave, helping to ensure what sits in her super on retirement is fair.
This is from Amy (pictured below with her partner Chris):
“Chris (my partner) and I were very excited when we heard about these changes coming into effect. Both of us having started within a year of each other have had similar journeys at South East Water until it came time to look at our parental leave options.
“Not only does this change mean that I am not disadvantaged with my super for having a child but I now have more of a choice if I wish to return to work earlier without feeling guilty. This change means that Chris can be the primary carer and have an equal experience when I return to work so I can continue to shape a career that I have worked hard at building before going on leave.”
This type of change starts at the top – having a board and Executive that support equity is crucial –it’s hard to make progress until you have this sponsorship in place.
I’m really proud of the contribution we’ve made to close the wage gap on equal pay day. I hope that in my lifetime this measure of equal pay day will become redundant – but that requires change in all organisations, big and small.
I challenge you to start with your data, add a gender column to your remuneration spreadsheets, and see what you can find.
This article was first published on LinkedIn.