Pay gaps between women and men can vary between industries, occupations, and a range of other demographics. Employers play a vital role in closing pay gaps within their workplaces.
We have worked with other agencies to create a set of guidance to help employers understand the gender pay gap within their organisations, and take steps to close it:
- Measure the pay gap in your organisation: Identifying and understanding pay gaps is an essential first step in taking action.
- Remove gender bias from your recruitment processes: Our thinking about men and women is still deeply influenced by beliefs about appropriate gender norm behaviours. Correcting this leads to better employee engagement and satisfaction, and better performance overall.
- Ensure that gender isn't a factor in setting starting salaries: This is an important step, as decisions made in salary-setting can lead to entrenched, ongoing discrepancies throughout someone's career.
- Ensure that gender isn't a factor in salaries for the same or similar roles: Reviewing salaries of your current employees, and determining whether these are justified by gender-neutral criteria, allows your organisation to identify salaries which need to be corrected.
There are seven suggested actions that employers could take to close the gender pay gap in their organisation.
1. Lead from the top
Leaders are a powerful driver of change and a commitment from the Chief Executive and Leadership Team is a game-changer for addressing workplace gender issues.
Leaders need to understand and effectively communicate the business case for change and how it benefits everyone. Talking about how the gender pay gap occurs and why the organisation wants to close it should happen often and throughout the organisation.
Employees, customers, and stakeholders value authenticity. Leaders can ensure that public image aligns with reality by taking responsibility for change. Without the support of top leadership, including resourcing, even very committed managers will struggle to make changes.
2. Make a plan
A plan to close the gender pay gap in your organisation could be a stand-alone plan, be part of a larger diversity and inclusion policy, or a statement from leadership about your organisation’s commitment. Any policy should have a framework for accountability.
Integrate your gender equality policy into business as usual to give it longevity. It could take three to five years to effect tangible, sustainable results.
3. Analyse your data
An effective plan is based on your organisation’s data. It will have measurable objectives with regular and transparent reporting on targets and clear accountabilities.
All organisations are different and may have different problems to address. Regardless of size, you need data to act.
Stats NZ has guidelines to measure gender pay gaps in businesses.
4. Be aware of bias
The gender pay gap is driven by hard-to-measure factors like unconscious and conscious bias, and differences in behaviours and choices between men and women.
Most of our thinking occurs without conscious awareness. This is sometimes described as ‘fast thinking’. It is efficient, but when fast thinking is based on inaccurate stereotypes, it can negatively influence decisions about the recruitment, pay, and career progression of women.
When employees are unaware of bias, they are less likely to make fair and accurate decisions and challenge bias when they see it. Organisations should train their HR staff and managers to understand and counter unconscious bias, especially during employment processes.
Unconscious bias training for leaders and managers is an important first step. It must be supported by processes that maximise objective decision making.
5. Redesign your talent management processes
Review decisions about groups of employees (e.g., annual performance and pay rounds) for the gender balance of the results. If there is an imbalance, check if there is a legitimate reason for this or if it is the result of bias. You should have a clear criteria to reduce decisions being based on factors like ‘fit’, ‘style’, and personal views when recruiting staff.
Be transparent about salary ranges for all employees so everyone has the information they need to be paid fairly and equally. Read more about pay transparency.
Make your workplace a good environment for women. Sexual harassment and working in a sexist environment can seriously undermine women’s performance, their wellbeing, and their retention in an organisation. Formalise practices to address harassment and consider taking a zero-tolerance approach to sexist comments and behaviour.
A growing number of organisations are also establishing policies to support employees experiencing domestic violence.
6. Maximise talent
Having more women in leadership is associated with better business performance. We need to identify, grow, and support future generations of women leaders and encourage women to take the next step in their careers into leadership roles.
Research has found the biggest barriers to women’s career development and progression to leadership roles are:
- the lack of options for flexible work
- difficulty managing re-entry following a career break
- unconscious bias.
7. Normalise flexible work and parental leave for men and women
Businesses promoting flexible work options have a competitive advantage when it comes to attracting and retaining good staff.
Flexible work arrangements and parental leave helps women stay in paid work while balancing caring responsibilities. However, career breaks and part-time work currently act as barriers to career advancement, as shown in our 2013 report, Realising the Opportunity. Gender pay gaps increase when working women have families, and the gaps remain wide throughout their working lives.
Organisations that normalise both men and women taking time out for caring duties and parental leave, and offer support on re-entry into the workforce, could see higher employee retention and a sustainable workforce.