March 4, 2024
In June 2023, I shared some of my examples of gender pay gap analysis. In the spirit of knowledge sharing, I attempted to show some examples of intersectional pay equity analysis of women and me from different cultural backgrounds and disability. It was to show that it can be done, and you should be doing this, or attempting this, in your own organisation. Even if you don’t have fully inclusive data sets, you can still determine trends. The use of qualitative data can also get to the heart of the matter and provide some real insights into the human impact of inequity, including compounded forms of inequity.
Pay equity is connected to everything in the employment lifecycle – from recruitment, promotion and career development to retention, exits, flexible working and superannuation.
Gender pay gaps highlight areas where employee’s may experience economic and employment vulnerability such as job insecurity through occupational segregation, and compounded forms of inequity – gender, racial, disability, age, etc.
Yes, we know that the gender pay gaps (GPGs) of over 5000 organisations in Australia were published on 27 February 2024. In fact, GPGs have already been published in 2021 by 300 Victorian Public Sector Entities.
However, work doesn’t end on 27 February. 2024. And if your ship has hit the iceberg, then look at building a new ship that will steer a new course. Don’t get fixated on a single figure. A high figure tells you need to look under the hood. Your competitors and peers have most likely developed a sophisticated understanding and path of action to reduce their GPGs.
I wonder in six months time, will we still see the foot on the accelerator? Will the roar shake the foundations of institutions? Is this the turning point we have waited for? Or will it be the top third of organisations that have begun this work years ago, seize on the opportunity to see their businesses and talent grow.
I wonder if it will be left for the Diversity, Equity & Inclusion or Human Resources Directors and professional, and even the payroll and data reporting lead that will do all the heavy lifting, in collected, cleaning, analysing data and providing insights, strategies and actions. Will there be an increase in accountability, action and resources to do this work effectively?
The emotionality and irrational defensiveness by some sections of the media, including some very loud men and questioning of the methodology has been staggering. The polarisation of gender pay gaps has reminded me of a movie rating like the one below. They give the recent announcement a one rating. Whereas, those who know what it all means and what’s at stake are around the 4 to 5 mark. The loud voices are probably those who have never done a pay equity calculation before, have not used a calculator and excel spreadsheet, or even live dashboard reporting.
So to find the truth, be prepared to dive into the details, do the maths, share your methodologies, share your insights, continue talking about it, contributing to the discussion. If my hope has faded in some CEOs to actually do something, and wait for this to blow over.
I have enjoyed reading the countless contributions online and in conversation. The conversations on DEI and GPGs are continuing to evolve and mature. And I don’t get distracted by the new found love for GPGs. But I know it means so much to see real and sustainable action, and take the work even deeper with intersectionality and intersectional analysis at the centre so people who are marginalised can also be counted.
The importance of good preparation starts with a robust methodology, including data integrity (accuracy and reliability), thorough analysis and longitudinal information for comparison. Data is not just for nerds. Be curious don’t rely on payroll to prove all your data and analysis needs. Interrogate and question the data. You may need to clean data. You may need to double handle data – external and internal reports. Applying an intersectional lens to the gender pay gap can tell a deeper story.
For anyone who has looked from anywhere from 1,000 to 20,000 lines of data, it’s tricky. Looking for patterns or anomalies in a see of data takes practice. And my drive comes from a previous manager very early in my career that was fraudulent with pay equity data that I had analysed. I get a very guttural and emotional reaction to cherry picking and fudging figures.
I have been conducting pay equity analyses (including intersectional analysis) for organisations since 2006 (WGEA and CGEPS) and have learned that understanding and addressing gender pay gap is critical in addressing gender inequity – including economic insecurity, lower superannuation over a lifetime, job segregation, invisible and unpaid work, discrimination, etc.
I have devised an example below showing an organisational GPG of 40.8% with close to 0% in band gaps. It’s a small and manageable sample size of 40.
When there is gender parity in non manager levels, the GPS is reduced to 23.4% (addressing job segregation). When the non manager roles are paid higher, then the GPGs is reduced to 20.9% (addressing jobs that may be undervalued). And over time, when we reach closer to gender parity across each classification level, we reduce to GPG to 5.0% (addressing transition into the leadership, talent and career progression), plus other factors such as leave, flexibility, sexual harassment, culture, cultural safety etc.
Using the salaries from Table 1 above, and inserting them into the table below gave a median gap of 58.7% compared to the mean gap of 45.8%. You can insert your actual salaries in a table like the one below to determine your GPG.
When I look at gender pay gap figures, I always think about the human experience behind the figures. It’s not just a number, a single figure. Someone earning only $50,000 a year is a challenge with today’s cost of living pressures – paying bills and putting food on the table. Women on average earn else then men and do some of the most valuable work in the community, education, health, caring, hospitality, basically everything that you need to keep you alive and well. So, the gender pay gap is worth addressing.
The gender pay gaps of approximately 300 Victorian Public Sector Departments and Entities were published in 2021, after the passing of the Gender Equality Act (Vic) in 2020. The results show the overall mean and median, base and total remuneration, and can be viewed on the portal here:
Data was collected in the last pay run prior to 30 June 2021 and 2023. You can also access all VPS Gender Equality Action Plans. They include actions against seven gender equality indicators, including GPG, representation, job segregation, promotion, flexibility, etc. In 2021, each organisations developed actions addressing GPGs in their GEAPs.
On 20 Feb 2024, all VPS entities submitted their gender progress reports and gender equity audits (that include GPG analysis) to the Commission, reporting on progress against every action since 2021, including GPGs, and use qualitative and quantitative results from employee experience surveys.
Data on other diversity dimensions including age ranges, cultural identity, LGBTIQ+, Aboriginal and Torres Strait Islander, Women, Men, ‘Self-Described’ (VPS terminology), disability, were reported from data collected in 2023, and GPGs will be analysed on available data in 2024.
Intersectional analysis on other diversity dimensions have already featured in 2023 using 2021 data, and will feature again in future reports by the Commission. Longitudinal data will show what progress is being made.
Below is an example I created of the pay gaps between women and men of different cultural heritages. I used the approximate 13.0% mean base remuneration pay gap between women and men in Australia.
I then created a category of a person’s cultural heritage that excludes Europe, USA, Canada, New Zealand and Australia called A1 (see table below). These are preliminary workings. This analysis can be done with internal data, and your data accuracy will increase when HRIS is able to capture more than one cultural heritage per person, and when there is increased confidence and comfort in sharing personal information with the organisation.
Proactive organisations have conducted more granular type analysis. For example, analysis by level to the CEO, manager and non-manager categories, actual classification levels, work areas, occupation type, part time, casuals separately, fixed term and other diversity dimensions to find the true extent of gender and intersectional inequity. Below is an example of GPGs for full time and part time employees (showing higher GPGs), as well as GPGs for ongoing and fixed term employees. You analysis can show areas of vulnerability in employment, where it may be difficult to negotiate higher salaries.
Two years of work by https://www.genderequalitycommission.vic.gov.au/ CGEPS has helped us understanding some of the causal effects of GPGs, in combination with other gender equity actions – such as eliminating sexual harassment, racism, ableism, discrimination, addressing under-representation, under-utilisation, bias, casualisation, unpaid & invisible work, caring, career breaks, recruitment, women in lower paid professions (teaching, health care, age care, etc), the professions that keep us alive and well.
Organisations can also consider factors such as people working above their level, working more hours than they are paid, negotiated commencement salaries, and cumulative effects (lower super over time).
Transparency is a great step in the publication of gender pay gaps. I hope we keep our foot on the accelerator. Accountability, including targets, KPIs and actions to reduce the gap have been the some of the drivers for organisations successfully reducing their gap.
We know that it is estimated that it will take 170 years to close the GPG, but we’d prefer to see it done in our lifetime.
The ship has truly set sail and this is a good course it has taken.