The price of inaction: Why closing pay gaps can’t wait until 2055

Dellwyn Stuart, CEO of Gender at Work and YWCA, highlights how crucial it is to address our pay gaps and what we can do to create meaningful change.

Are you confident your organisation is doing enough to close its gender pay gap? While many New Zealand business leaders might answer yes, the data tell a different story. At the current rate of progress, it will take until 2055 to achieve gender pay equity in New Zealand. This is a timeline that’s increasingly out of step with the expectations of our emerging workforce and one that puts Aotearoa New Zealand behind.

New Zealand’s gender pay gap remains stubbornly at 8.2 per cent, with no significant improvement over the past year. For Māori, Pasifika and Asian women, the pay gap is even more pronounced. For businesses aiming to attract and retain top talent in a competitive market, this gap represents more than just numbers on a page, pay transparency and fairness are vital to recruiting the best talent.

The path forward is clear: measure, publish, plan and act.

New Zealand Context

The challenges of achieving gender pay equity in New Zealand are unique. Despite our proud history as the first nation to give women the vote and our reputation for progressive social policies, we face persistent workplace inequities. While our national gender pay gap might appear modest, compared with some countries, it masks compounded disadvantages faced by different groups, with Māori and Pasifika women experiencing the largest pay gaps.

The impact of COVID-19 added another layer of complexity. The pandemic disproportionately affected women’s employment in New Zealand, with women more likely to have lost jobs or reduced hours. As we continue to rebuild and reshape our workplaces, we have an opportunity to address these historical inequities.

Generation Gap In Expectations

Today’s young professionals bring markedly different expectations to the workplace than their predecessors.

Transparency and ethical behaviour aren’t just ‘nice-tohaves’ they’re non-negotiable elements of an acceptable workplace culture. Publishing and addressing pay gaps – whether gender-based, ethnic or other – has become increasingly essential to meeting these expectations.

Recent research from Gender at Work highlights just how crucial this issue has become for New Zealand organisations. In organisations without a formal diversity, equity and inclusion (DEI) policy, a mere 14 per cent of young women and non-binary employees indicated they planned to remain in their role for the next 12 months. The contrast is stark: in organisations demonstrating a visible commitment to DEI and fostering inclusive cultures, that figure jumps to 74 per cent.

Gen Z and Millennials will make up 50 per cent of the workforce by 2030, and we know these new generations are more diverse than those who have come before them. By taking steps to improve inclusive practices today, organisations can ensure they are well-placed to move with these demographic and societal changes.

Measuring To Manage

The first step toward meaningful change is accurate measurement.

While New Zealand doesn’t currently have a standardised methodology for measuring pay gaps, Gender at Work recommends organisations use the guidance provided by the Government’s Voluntary Gender Pay Gap Toolkit and Stats NZ’s ‘Organisational Gender Pay Gaps – Measurement and Analysis Guidelines’. These guidelines recommend the best measures for assessing pay gaps. The Good Employer Matrix provides further specific guidance to organisations wanting to calculate and address ethnic pay gaps.

Transparency and ethical behaviour aren’t just ‘nice-to-haves’, they’re non-negotiable elements of an acceptable workplace culture.

However, measurement alone isn’t enough, transparency and action must follow. Some New Zealand organisations have been reluctant to publish pay gap data, citing concerns about confidentiality and competitive disadvantage. However, leading organisations are increasingly recognising that transparency builds trust and demonstrates commitment to change.

Gender at Work and the YWCA have recently launched the new Pay Gap Insights Hub, the go-to place for information about measuring, publishing and closing pay gaps in Aotearoa New Zealand. The Hub also houses New Zealand’s Pay Gap Registry, with over 115 of the largest organisations publicly listing their pay gap data.

We know that publishing pay gap data makes a big difference in addressing gender and other workplace inequities. Of the organisations that have published their pay gaps on the Pay Gap Registry for at least two or more years, 79 per cent saw a decrease in their gender pay gaps.

Of the organisations that have published their pay gaps on the Pay Gap Registry for at least two or more years, 79 per cent saw a decrease in their gender pay gaps.

Benefits Of Action

The imperative for change extends beyond ethical considerations. Organisations that fail to address these issues face significant business risks.

• Talent attraction and retention: With young professionals making up an increasing proportion of New Zealand’s workforce, organisations that don’t meet their expectations for equity and inclusion will struggle to attract and retain top talent.

• Reputation and brand: In an era of increasing transparency, organisations’ approaches to gender equity and inclusion are becoming more visible to customers, partners and potential employees. This is particularly relevant in New Zealand’s relatively small market, where reputation can have an outsized impact.

• Innovation and performance: Research consistently shows that diverse and inclusive organisations outperform their peers in innovation, decision- making and financial results. For New Zealand businesses competing in a global market, this performance advantage is crucial.

Pathways To Progress

For organisations ready to take action, GenderTick, New Zealand’s only gender equity accreditation programme provided by Gender at Work, offers a structured pathway to addressing these challenges.

The programme provides:

• an independent audit of your current gender equity practices

• access to best practice frameworks and tools

• expert guidance on developing comprehensive DEI strategies

• public recognition of your commitment to gender equity.

The programme has been specifically designed for the New Zealand context, taking into account our unique cultural and business environment.

Looking Ahead

The year 2055 is far too long to wait for pay equity in Aotearoa New Zealand. With young professionals increasingly voting with their feet, organisations that fail to take decisive action now risk finding themselves on the wrong side of history and the wrong side of the talent market.

The path forward is clear: measure, publish, plan and act. The tools and support are available. The benefits are compelling. The only question remaining is: will your organisation be a leader in creating the workplace of the future?

CREATING MEANINGFUL CHANGE

Once organisations have measured and published their pay gaps, the crucial next step is developing and implementing a plan to address them. A comprehensive approach should encompass several main areas.

1 Leadership representation

Gender at Work encourages organisations to adopt a 40:40:20 gender balance goal in senior leadership and board roles. This means organisations should aim for 40 per cent women, 40 per cent men and 20 per cent any gender (this could be men, women or other genders).

Regularly measuring progress towards this goal ensures organisations remain focused and committed to reaching this target.

It’s also critical that organisations regularly consider gender balance for talent development and succession planning.

Recent data shows that while women comprise 50.4 per cent of New Zealand’s workforce, they hold only 31 per cent of director roles in the largest private sector organisations.

2 Inclusive recruitment and promotional practices

Reviewing and updating your recruitment and promotional practices to eliminate bias is another critical step in addressing workplace inequities. Organisations can take various steps to improve recruitment practices, including:

• ensuring the organisation has a formal remuneration structure

• providing pay transparency on all job listings

• using tools to check for gendered language in job advertisements

• conducting blind CV screening

• ensuring they have diverse interview panels and structured interview processes.

3 Flexible work and support for parents and other caregivers

Despite making up a much larger percentage of the workforce over recent decades, research shows that women still take on the bulk of caregiving responsibilities and other domestic labour. Providing a flexible work environment that recognises the different caregiving roles that employees may take on outside of work can help organisations retain skilled workers. This could be flexibility around hours of work, the place of work or other flexible practices.

Many leading organisations provide their employees with paid parental leave payments above the statutory minimum. Programmes like Crayon’s Parental Leave Register allow prospective employees to assess parental leave and other caregiving provisions before applying for a role, highlighting the importance of organisations remaining competitive in their offerings for staff. With only 2 per cent of fathers taking parental leave in New Zealand, Gender at Work encourages organisations to consider offering paid parental leave for partners and working towards non-transferable equal paid parental leave practices. This is to encourage both men and women to take parental leave and have a meaningful effect on addressing gender norms for the long term.

4 Gender-safe and inclusive workplace practices

Ensuring your workplace is safe and inclusive is a critical part of addressing gender and other inequities. It’s vital that organisations have clear policies, guidance and procedures around workplace behaviour, including zero tolerance for bullying, harassment and discrimination.

Other necessary steps include policies and guidance to ensure the wellbeing of your staff, including support around menstruation and menopause. This could include training for people leaders, the provision of free period products in all bathrooms and offering flexibility for those experiencing menstrual or menopausal symptoms.

Gender at Work encourages organisations to consider the needs of people of all genders, including those who have or are transitioning to another gender. Gender affirmation and transitioning policies and guides play an important role in this space, as do practical things like ensuring gender-neutral bathrooms are available to all staff.

Dellwyn Stuart has worked in leadership and governance roles across commercial businesses, philanthropic funds and not-for-profit organisations. As the current CEO of YWCA, she is passionate about contributing to a future for Aotearoa New Zealand that is more equitable for all and finds joy and optimism in her work with young women. As a leader, her career spans the commercial and not-for-profit sectors with a depth of knowledge and experience in philanthropy, fundraising, stakeholder engagement and gender issues.