At Reimagine HR, we are committed to fostering inclusive workplaces that drive innovation and success. This week, I had the pleasure of meeting with the Hon Mary Woolridge in Perth. Mary is a distinguished leader in the fields of government, corporate governance, and gender equality. With a robust background in public policy and advocacy, she has been instrumental in driving significant social reforms in Australia. Currently, as the CEO of the Workplace Gender Equality Agency (WGEA), Mary leads efforts to enhance gender equality in Australian workplaces.
Many don’t realise that the gender pay gap is NOT a calculation of equal pay for equal work. It’s the difference in the average or median earnings between women and men in the workforce. It’s now total remuneration, not just base salary, and far more indicative of the gap.
Regardless of what calculation you use, there is ALWAYS a gender pay gap in favour of men in Australia.
So why mind the gap?
Besides the fact that WGEA now publicly shares the gender pay gaps for private sector employers with 100 or more employees…
Three Reasons for Addressing the Gender Pay Gap in Australia
#1 Economic Performance and Productivity
- Boosts Business Performance: Research consistently shows that companies with greater gender equality, including equitable pay, perform better financially. Diverse teams bring varied perspectives, driving innovation and better decision-making. According to McKinsey & Company, gender-diverse companies are 21% more likely to experience above-average profitability (McKinsey & Company).
- Increases National Economic Growth: Closing the gender pay gap can significantly boost the overall economy. The Grattan Institute estimates that narrowing the pay gap could add up to $25 billion to Australia’s GDP annually by 2025 (McKinsey & Company) (HRPolicy).
#2 Talent Attraction and Retention
- Enhances Employer Brand: Companies known for fair pay and gender equality attract top talent. As the workforce increasingly values diversity and inclusivity, businesses that address pay disparities become more attractive to skilled workers, leading to higher employee satisfaction and retention rates (McKinsey & Company).
- Reduces Turnover Costs: Addressing pay inequities helps reduce turnover. Employees are more likely to stay with employers who demonstrate a commitment to fair compensation and gender equality, saving companies the high costs associated with recruiting and training new staff (McKinsey & Company).
#3 Legal and Social Responsibility
- Compliance with Regulations: Adhering to gender pay equity laws and guidelines set by bodies like WGEA ensures companies stay compliant and avoid potential legal repercussions. Recent legislative changes in Australia have made gender pay gap reporting more rigorous, increasing the importance of compliance (WGEA).
- Corporate Social Responsibility (CSR): Addressing the gender pay gap aligns with broader CSR goals. Companies that take active steps towards equality enhance their reputation, demonstrating a commitment to ethical practices and social justice, which resonates with consumers, investors, and the public (WGEA) (McKinsey & Company).
Why Executives Should Care
1. Financial Gains: Executives who prioritise closing the gender pay gap can unlock financial benefits for their organisations. Diverse leadership teams are correlated with better financial performance, and reducing the pay gap can contribute to this positive outcome (McKinsey & Company).
2. Strategic Advantage: Embracing gender pay equity gives companies a strategic edge in the competitive talent market. Organisations that lead in gender equality are better positioned to attract, develop, and retain top talent, which is crucial for long-term success (McKinsey & Company).
3. Reputation and Brand Loyalty: Companies committed to gender pay equity build stronger reputations and foster greater loyalty among customers and employees. This commitment enhances brand perception and can lead to increased market share and customer loyalty, benefiting the company’s bottom line (McKinsey & Company) (WGEA).
Closing the gender pay gap is not just a moral imperative but a strategic business decision that drives performance, attracts top talent, and builds a reputable brand.
So what practical steps would you recommend to organisations who are looking to close the gap?
Trina Sunday
About the Author
With over 25 years of experience in Human Resources, Organisational Development, Marketing, and Events Management, Trina Sunday brings extensive knowledge and a global perspective to Reimagine HR. Her work across the UK, Asia, and Australia enables her to pioneer innovative HR strategies using unique experiences and extensive networks. Trina is passionate about empowering HR teams and people leaders, building confident and capable professionals who are valued, influential, and impactful within their organisations. She thrives on collaborating with those eager to embrace change and challenge the status quo. Beyond her professional pursuits, Trina values equity and has a deep appreciation for Cambodia, coffee, and champagne. She is dedicated to fostering happiness and success in our workplaces and is on a mission to improve toxic leadership and cultures.
