Employers will pay the price if unprepared to explain their gender pay gap
The gender pay gap publication date is looming. Market Expertise CMO Jacqueline Burns argues employers that are not on the front foot risk damaging their employer brand, could face an exodus of talent, and will be called into question by their stakeholders.
Under the Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Act 2023, employers with 100 or more staff must submit workforce composition, annual base salary, total remuneration, and other related data each year.
On 27 February 2024, the Workplace Gender Equality Agency (WGEA) will publish the first set of private sector employer gender pay gaps – median gender pay gaps and gender composition by pay quartile. The data will cover the period 1 April 2022 to 31 March 2023.
Until now, employers have only been privy to how their own data compares with their sector’s average and that of other industries.
Soon, around 5,000 large employers will be named or shamed as the best or worst gender equality performers.
Despite being give advance notice by WGEA, many employers will neglect to prepare gender pay gap communications for their internal and external audiences.
These could be the most important corporate communications a company issues in 2024. There will be intense interest in, and scrutiny of, the WGEA list. If employers are not in control of the narrative, they will miss an opportunity – or pay a price.
Gender pay gap versus equal pay
A large proportion of workers will not immediately understand the difference between equal pay and the gender pay gap. That ignorance may lead to misunderstanding and the spread of misinformation which could destabilise a workforce, negatively impact productivity, and damage a company’s employer brand.
The gender pay gap is the difference between the average earnings for men and women, expressed as a percentage of men’s average earnings.
If employers don’t help workers to understand how the gender pay gap is calculated, what it represents, and why it is what it is, their employees may draw the wrong conclusion and form a negative opinion about their employer. In what is still a tight labour market, staff will walk and rivals will be quick to poach high performers.
A company could have an exceptional record of paying men and women equally for the same, or a comparable, role but score dismally on the gender pay gap because of the composition of its workforce and other factors.
EXAMPLE
Take a car dealership, for example. Car sales is still very much a male dominated sector but many of the back-office roles (such as reception, marketing, and customer service) are held by women. These administrative workers are likely to earn less than the incentivised sales agents.
In this example, let’s say the average male salary is $90,000 and the average female salary is $65,000. The dealership’s gender pay gap will be 27.8%. – well above the Australian average of 21.7%.
This doesn’t mean the dealership doesn’t provide equal pay to men and women who are performing the same role. But it does draw attention to how much less women in this fictional workplace earn, compared to men, no doubt because of a complex array of factors.
Unless that’s explained, and the dealership provides a satisfactory overview of what it is doing to narrow its gender pay gap, it would be easy to envisage how female employees (and their male allies) might react.
What do you have to hide?
According to WGEA, 90% of employers with more than 100 staff comply with the legislation, equating to almost 5,000 organisations and representing close to 5 million workers.
The 500 or so non-compliant employers will be weeded out by their absence on the WGEA list and will have some explaining to do.
In addition to these organisations probably being in breach of the legislation, their employees, customers, suppliers, and other stakeholders will question why they have not submitted data. Many will assume the company has something to hide.
Gender pay gap communications checklist
As the clock ticks down to 27 February, employers must prepare their internal and external communications, including an Employer Statement for posting on the WGEA website, so they are not scrambling to dig themselves out of a hole once the WGEA list goes live. In doing so, employers would be wise to address seven points:
- What is our company’s stance on gender equity?
- What is the gender pay gap and how is it different to equal pay?
- How do we compare to the Australian average (21.7%)?
- How do we compare to other employers in our sector?
- To what do we attribute our gender pay gap (and any significant difference to others in our sector)
- What are we doing to narrow our gender pay gap?
- How will we report and provide updates on our progress to demonstrate our commitment to gender equity?
Jacqueline Burns is chief marketing officer at Market Expertise and the NSW board director of the International Association of Business Communicators.
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gender pay gap
International Association of Business Communicators
Jacqueline Burns
Market Expertise
