Executive pay not primary driver of gender gap: Evenbetter
It is not high-paid executives that entrench stubborn gender pay gaps, according to payroll analysis startup Evenbetter. Instead, because of the mathematical nature of averages, it is big volumes of lower-paid roles that skew female that are usually the culprit.
Evenbetter was launched in March and today – “Equal Pay Day” according to the Workplace Gender Equality Agency (WGEA) – it released the results of an online survey that it says shows why businesses should care about the gender pay gap.
Evenbetter co-founder Ayal Steiner concedes the survey of 400 respondents online is not scientific, but says it clearly shows that gender pay gaps matter when it comes to prospective new employees.
Ayal Steiner and Sorrel Kesby
”Now that the gender pay gap is public, women shy away to the point of 71% who will absolutely think twice before applying to a workplace where there’s a higher gender pay gap,” he says.
“It impacts their motivation and engagement. You as a business are losing out on talent … it means there’s a drag on your [business] and you’re not even able to see it, but you’re going to be losing velocity.”
The survey indicated that men also took a dim view of businesses with a high gender pay gap.
Evenbetter was founded by Steiner and Sorrel Kesby to assist businesses create and understand gender pay gap data they must by law now file annually.
Data released in March by the WGEA showed that men, on average, are paid 22% more than women in Australia. The gap is lower in adland – 15.8% according to Mumbrella’s analysis – and even less in media (13.5%). We also took the time to rank agencies and media companies.
But rather than the gap being primarily driven by individual unfairness in pay, Steiner says market availability of workers is central.
“ Most people who are not from HR think the gender pay gap means, ‘oh, we’re not paying men and women the same.'”
“Our system shows very many cases that for payment of people in the same role, there’s not a lot of disparities.
“The big drivers of the gender pay gap are market rates and talent availability for certain roles.”
He gives the example of an airline.
”You and I want to start an airline. We need to hire a hundred pilots and 500 flight attendants. Right now, 92% of pilots are men. 78% of flight attendants are female. Pilots earn $250,000. Flight attendants earned $100,000. We will have a gender pay gap. And it’s not because we were discriminatory on pay … if anything, we just chose randomly without any gender bias from the market. The market has a bias.”
There is a common misconception that gender pay gaps are driven by male-heavy executive teams.
“ A lot of people think that, oh, it’s this small team of highly paid executives that are creating a gender pay gap. And our analysis actually points to where mathematically they have an issue – and they can work really hard on that small team, but they will not move the needle on the gender pay gap as a whole.”
This is because it is the volume of lower-paid jobs which really impacts the average, as seen in the example of the hypothetical airline.
Steiner says Evenbetter, which is currently working with Fujifilm, Knight Frank and Applejack Hospitality among other companies, will launch pilots in market with several prospective clients in the next month. He says one of these is a media company.
While all business that meet the criteria must now file their now-obligatory gender pay gap paperwork, some businesses are seeing the numbers get worse.
“ A lot of companies have actually seen their agenda pay gap go up. They are going backwards.
“ We have to be mindful of the fact that for many of these companies, this is not a flick of a switch – this is change management that will happen over time.”
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