INNOVATION

Women In Top Leadership Roles Earn $93,000 Less Than Male Counterparts

Are you even surprised?

02/03/2017 2:19 PM AEDT | Updated 03/03/2017 11:30 AM AEDT

You would think that women in top-tier managerial roles would be on a more than healthy paycheck. And sure, compared to the rest of us they probably are, though a new report has revealed when compared to their male counterparts, women are earning on average $93,000 less each year.

While the current national pay gap average sits at 23 percent, the report confirms it grows with seniority, climbing to 26.5 percent among employees in managerial positions.

The report from Bankwest Curtin Economics Centre and the Workplace Gender Equality Agency analysed gender pay gaps across 12,000 organisations, capturing more than 4 million Australian employees.

"Pay gaps are really high at the top because that's where there is the most discretion," Jackie Woods, engagement executive manager at the Workplace Gender Equality Agency, told The Huffington Post Australia.

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'It seems that where the men are scarce, they are more highly valued or fast-tracked.'

Where there is no discretion to negotiate, so where people are just covered by an award or a collective agreement for example, pay gaps are small. But where there is discretion, the gap widens and is exacerbated by things like bonuses and additional entitlements.

Perhaps the most surprising finding (after the six-figure disparity) is that once a company's management environment becomes dominated by women (beyond 80 percent) the gender pay gap increases from eight to 17 percent.

"Not only do female-dominated organisations tend to be lower paid, but this analysis shows that in workplaces with heavily female-dominated management teams there are large gender pay gaps in favour of men," Woods said.

So while increasing the representation of women in senior leadership roles most definitely lowers the gender pay gap, having too many females at the top is detrimental.

The problem is employers don't often think they have pay gaps until they look at the data. This is because employers don't set out consciously to pay women less, but a series of dynamics in the workplace means that nearly always there are pay gaps in favour of men.

"It seems that where the men are scarce, they are more highly valued or fast-tracked," Woods said.

"The key message that balanced workplaces and balanced management teams lead to better pay equity outcomes."

While we know the gender pay gap is about much more than a number (the report also unveiled male graduates earn 2.9 percent more than their female counterparts, so there goes the 'men get more promotions because they don't leave to have a baby' argument) it highlights the pure economics of it all.

Indeed even at the top of her game, in 2017, a woman's paycheck is still play money compared to that of her male co-worker.

So what needs to change?

"The first thing workplaces need to do is conduct a pay gap analysis. We encourage all employers to analyse their own pay data for pay gaps," Woods said.

That means like-for-like gaps, so people in similar roles, pay gaps by levels and then also across the whole organisation.

Currently, only 27 percent of Australian employers conduct such an analysis.

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Currently, only 27 percent of Australian employers conduct a pay gap analysis.

"The problem is employers don't often think they have pay gaps until they look at the data," Woods said.

"This is because employers don't set out consciously to pay women less, but a series of dynamics in the workplace means that nearly always there are pay gaps in favour of men."

Woods explains another measure organisations have taken to address the issue is withholding from asking employees their previous salary when they're being offered a job.

"This is because if it is a male and female candidate up for the same job, the man was probably on a higher salary in his previous role," Woods said.

It's about moving to a more accountable pay structure, where it's clear what the role is worth and people are remunerated according to that, rather than just relying on people's individual negotiating skills.

Another problem is that pay is very much linked to people's tenure with an organisation.

Woods explains to address this issue some employers are making sure employees get their pay review even during maternity leave, while also being more accepting of part-time work at a more senior level.

It's about removing that financial penalty to working flexibly that breeds the notion that women have traded off progression in the workforce in order to get that flexibility.

"Because women are more likely to take time out, they miss out on those annual increments but this measure ensures they keep up," Woods said.

The encouragement and promotion of flexible work for women and men is also crucial.

"For example, the option to go part-time is not just a special allowance for mothers but that everyone is recognised as having responsibilities outside the workplace," Woods said.

Organisations that are beefing up their parental leave programs for men are on the right track, as well as those promoting flexible working conditions for those who don't have kids.

"It's about removing that financial penalty to working flexibly that breeds the notion that women have traded off progression in the workforce in order to get that flexibility," Woods said.

"Everyone should be able to progress their career and still have some flexibility."

Woods explains voluntary targets that are embraced by the leadership of an organisation, for example changing recruitment practices or implementing mentoring programs for women, can lead to cultural change that drives progress.

"The figures are stubborn, but there is a lot of good work happening in organisations and while we would like to see the pace of that increase, there is a growing awareness," Woods said.

Equal pay for equal work. It really is that simple.


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