The topic has been debated for decades but the gender pay gap between male and female employees remains stubbornly entrenched. There is often talk yet little action, critics say. But if action is what this issue needs, then the world should turn its focus to New Zealand – the small country has become the latest bellwether for change in this long, bitter issue. It’s here that Jacinda Ardern, less than one month after becoming the world’s youngest female prime minister at age 37, has put her nation on the pay gap map by pledging equity for women in the public sector within four years. As Ardern told Bloomberg, “If New Zealand is seen as a champion of issues around gender pay gap and pay equity, I would be proud of that.”
Certainly, no one country can change the world, especially an island outpost not quite five million strong. But New Zealand has been a pioneer for women’s rights, being the first country in the world to give women the right to vote in national elections. It has also been leading the way in introducing measures to close the gap: In 2012, care worker Kristine Bartlett, brought an action against her employer, claiming that her pay rate did not provide for equal pay. Bartlett’s claim was based on the assumption that all caregivers, regardless of gender, are paid a discounted rate because the profession is predominantly occupied by women. The courts accepted Bartlett’s claim, a significant remuneration increase was arrived at, and led to an equal pay Bill being introduced in Parliament, now waiting to be passed into legislation. With Arden’s will-not-rest campaign and the country’s newly proposed pay equity legislations, New Zealand is spawning attention that may resonate in all corners of the world.
Pay equity has become a global hot topic not only in boardrooms and political agendas but in the women’s movement, trade unions and even Hollywood. The gender pay gap is a convergence of socioeconomic and political issues that make this almost a perfect storm. Luckily, it’s not only in New Zealand that the severe weather is starting to give way to sunshine.
For instance, some progress is being made in Australia, where in the public sector the pay gap is significantly lower (10.8%) compared to the private sector (19.3%). The public sector’s employment strategy in Australia deploys more pro-female employment practices like the take-up of flexible work arrangements by both genders, including at senior levels. Consequently, in government, there are more women in leadership positions and on government boards. Another good news is that the private sector is catching up, with a growing number of companies realising that gender equality is a key enabler of a high performance workplace and large organisations conducting audits to understand where gaps exist.
Experts say such audits are crucial to identifying the extent of the problem. A pay equity audit can help companies review their job and pay structure to first identify issues and their cause, and make informed decisions on how to rectify any gender pay gap. The audit will properly compare roles by examining the skills, efforts and, responsibilities of roles and how they compare to similar work carried out by staff of the opposite gender.
Establishing these fundamentals enables an organisation to adjust its remuneration design and work to remove any pay gap identified during the process. The other fundamental part of the process that then needs to be addressed is the way performance management decisions are made as this will ensure fairness in the application of a company’s pay policy.
Cracking the code on how to close the gap also requires a shift in thinking, ensuring gender neutral policies and practices are introduced and applied in all aspects of our organisations. Specific attention needs to be given to selection and promotion decisions, ensuring equality and diversity issues are considerations in the decision making, that level playing fields are introduced for the establishment of how companies remunerate and reward their employees, and that firms continually challenge the historical perceptions on which many practices are based upon. Perhaps the biggest shift in thinking will come from those at the top of the organisation. The spotlight is on leaders and, and their response to a growing tide of demand and expectation to close the gender pay gap?
At least in one corner of the world, that viewpoint is now loud and clear.