What can employers do?
"The gender pay gap? There shouldn’t be one. I have two daughters and want them to go into a world that is fair and equitable. If I can make things better in my position, then that is something that I certainly want to do.”
Nick Stanhope, Chief Executive Officer, AIA New Zealand
The gender pay gap is a high-level indicator of the difference between women’s and men’s earnings. It compares the median hourly earnings of women and men in full and part-time work. In 2020, New Zealand’s national gender pay gap was 9.5 percent.
Pay gaps between women and men can vary between industries, occupations, and a range of other demographics. You will be able to learn more about gender pay gaps between different groups by using our What’s My Gender Pay Gap? tool.
Closing the gender pay gap is good for business
Organisations can have also gender pay gaps within their workforce. Employers play a vital role in closing pay gaps within their workplaces, and studies have found that closing pay gaps will help organisations retain and recruit talent, improve their bottom line and even benefit the wider New Zealand economy.
“Closing the gender pay gap is the same as any other business problem — and once it is seen that way people take it very seriously … We’ve made it one of our core business objectives. We broke the problem down, measured it, made people accountable for it, and set a three-year target.”
David McLean, Chief Executive Officer, Westpac
The Ministry for Women has worked with other agencies to create a set of practical tools to help employers understand the gender pay gap within their organisations, and take steps to close it. The key requirements are:
- Measure the pay gap in your organisation - Identifying and understanding pay gaps is an essential first step in taking action.
- 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.
- 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.
- Remove gender bias from your recruitment processes - Our thinking about men and women is still deeply influenced by beliefs about appropriate male and female behaviours. Correcting this leads to better employee engagement and satisfaction, and better performance overall.
If you’re just getting started, we’ve prepared an introductory booklet, Closing the gender pay gap – actions for employers which you can download and print. You can also read more about our seven suggested actions for employers, here:
- Lead from the top
- Make a plan
- Analyse your data
- Be aware of bias
- Redesign your talent management process
- Maximise female talent
- Normalise flexible work and parental leave for men and women.
While a majority of New Zealand’s employees work for larger organisations, nearly 1 in 3 work for small businesses employing less than 20 people. Closing the gender pay gap in smaller businesses presents its own challenges:
- Statistics for pay differences are less useful for smaller organisations, as one or two low or high salaries might skew results. You may need to adapt some of the advice provided here, for instance you may not use interview panels when recruiting for jobs.
It’s possible to find workarounds for each of these challenges – for example you might be able to tell at a glance whether you have a gender pay gap for people in the same job, or to ask a friend from another business to lend a hand when interviewing new candidates.
The Australian government has prepared specific advice on how small businesses can improve their gender equality, which you can read here.
What other businesses are doing
In 2017, we interviewed representatives from eleven organisations to see how they're identifying and tackling any gender pay gap in their organisations. Take a read of them, and see if there's anything you could apply to your company.
Remember when considering the gender pay gap within your organisation that pay rates and progression for part-time workers is just as important as for full-timers – and around 70 percent of part-time workers are women. It’s also important to encourage fathers as well as mothers to take paid parental leave. The Kiwi Dads exhibition provides some useful background on the changing parenting dynamics in New Zealand families.
You can also take a look at the work being done in these organisations:
Diversity Works NZ helps businesses develop diverse and inclusive workplaces.
YWCA Auckland’s Equal Pay Awards recognise best practice among businesses on the journey towards equal pay.
The Women's Empowerment Principles give guidance on empowering women in the workplace, marketplace and community.
Champions for Change is a group of CEOs and Chairs committed to raising diversity and inclusiveness in the wider business community.
The Workplace Gender Equality Agency (WGEA) Australia has a number of resources for employers including a gender strategy toolkit , a guide to creating a gender equality policy, and specific help for SMEs .
LeanIn’s Women in the Workplace Study 2016 has more information on the leaking talent pipeline.
McKinsey&Co have been researching gender diversity in the workplace for 10 years and publishing their findings annually in the series Women Matter.
KPMG Australia undertook a study in 2016 on the economics of the gender pay gap there She’s Price(d)less.
There are also organisations that consult privately on workplace matters like closing gender pay gaps.