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How can we close the gender pay gap?

How can we close the gender pay gap?

At our most recent diversity and inclusion meetup, we heard from speakers with a range of perspectives on the context and origins of the gender pay gap, and how the gap can be addressed by New Zealand organisations.

Which term refers to what?

Our opening speaker was Sean Molloy, Principal Policy Analyst at the Ministry for Women, who helped to illuminate the theory and policy behind New Zealand’s 12% gender pay gap.

Sean clued us in with the Ministry’s recent report, Empirical evidence of the gender pay gap in New Zealand, released in March of this year. This report analysed the reasons behind the pay gap and showed:

  • that around 20% of the pay gap could be explained by differences in skills and experience, occupational or vertical segregation and the impact of women’s caregiving commitments
  • that the remaining 80% of the pay gap is “unexplained”
  • that the gender pay gap is larger and entirely “unexplained” for those with higher incomes.

Gender and pay what the different terms mean

Sean also provided some useful definitions for terms related to the gender pay gap that are often used interchangeably—sometimes incorrectly.

  • Gender pay gap: Gap between the average earnings of women compared with men
  • Pay parity: The same pay for the same job across different employers and workplaces
  • Equal pay: The same pay for the same job (no differential based on gender)
  • Pay equity: The same pay for different work of equal value

At the end of his talk, Sean suggested some ideas that organisations can use to make change:

  1. Lead from the top
  2. Make a plan
  3. Analyse your data
  4. Be aware of bias
  5. Redesign your talent management processes
  6. Maximise female talent
  7. Normalise flexible work and parental leave for men and women 

The Ministry for Women have recently released a new guide for employers: Closing the gender pay gap—actions for employers, which goes into these steps in detail. It’s well worth a look.

“No silver bullet”

Our next two speakers talked about their organisational experiences of grappling with the gender pay gap.

Peter Vial, NZ Country Head at Chartered Accountants Australia New Zealand (CAANZ), discussed his organisation’s proud history of gender equality.

He highlighted how important it was for the membership organisation to lead by example, and outlined CAANZ’s aims for the year to come which include getting more women into leadership positions—an action we know can close the pay gap.

Finally, Peter noted that eliminating the gender pay gap gives an organisation the edge when it comes to attracting and retaining talented staff. As he put it “We want them to choose us”.

Gina McJorrow, Senior HR Business Manager at ANZ talked about ANZ’s commitment to addressing the pay gap. ANZ was the supreme winner at last year’s YWCA Equal Pay Awards for the second year running, where they were recognised as “true champions of equal pay”.

Gina acknowledged up front that there is no “silver bullet” to solving the issue—no single approach—but discussed some of the initiatives that had helped to make a change. These have included:

  • giving pay rises to those on parental leave to minimise earning interruptions
  • allowing those on parental leave to continue to accrue annual leave
  • making KiwiSaver contributions for those on parental leave
  • encouraging more men to take parental leave—because fostering equality at home leads to a more equal work place
  • helping to develop women’s careers and build a pipeline of women leaders for the organisation
  • putting flexible working arrangements in place—around 87% of ANZ staff regularly work flexible hours.

To find out more about the ways ANZ has addressed the gender pay gap at their organisation, take a look at the MfW gender pay gap profile of Felicity Evans, Global Women member and General Manager, Human Resources New Zealand and the Pacific at ANZ.

The gender pay gap in retirement

Our final speaker was Ana-Marie Lockyer, General Manager of Wealth Products & Marketing at ANZ, who looked at the impact unequal pay has on women’s retirement savings.

Statistics show that at midlife there is an average $21,000 difference between men and women’s retirement savings. This can be attributed to:

  • women’s caregiving responsibilities—around 85% of women take time out of the workforce to care for others
  • women tend to be more risk adverse with their Kiwisaver investments and take more contributions holidays
  • women are retired longer than men—an average of 20 years as opposed to the average man’s retirement of 14 years. This is because women tend to retire earlier and live longer.

What’s the solution? One approach is for organisations to make a real commitment to addressing women’s gender pay gap issues while they’re still working. But again, Ana-Marie noted that there is no silver bullet: it’s taken ANZ about 8 years worth of concerted effort to reach the point they’re at today. This effort requires both a conscious decision to make change and an integrated approach to achieving this, as outlined by Gina.

You can read more about the gender pay gap in retirement in Stuff article that features Ana-Marie, or this blog post from Simplicity.

Where to from here?

As shown in the MfW’s recent report, there are many different factors that lie behind the gender pay gap. As a result, changing this will take a multi-faceted approach—both from within organisations themselves and in our wider society.

In a recent TEDxWellington talk, former MfW CE Jo Cribb urged us to #JustAsk: ask, that is, if there is a gender pay gap at their organisation and to be frank about what they were being paid.

Each year, the YWCA Equal Pay Awards recognise those organisations who are making strides at redressing the pay gap. These businesses range from SMEs to much larger corporates, and have a range of experiences and approaches that are well worth exploring.

If you’re looking for more practical advice, you can hear from those who have already made a difference at their organisation at our upcoming 1 Day for Change event. Here you’ll get practical information from leading figures on HOW to foster a more diverse, flexible and inclusive organisation as a strategy for growth. Tickets are available now.

It’s going to take a concerted effort to make close the gender pay gap in New Zealand—but by putting the right initiatives into place, this change is certainly achievable.