MIND THE PAY GAP: REPRESENTATIVE TALENT PIPELINES ARE MORE IMPORTANT THAN EVER

by David Braue

After years of collective effort to close stubborn gender pay gaps, new data confirms that companies embracing coherent diversity, equity and inclusion (DEI) policies are closing the gap faster than those that are not. Yet many organisations still do not understand how to integrate diversity into their charter of corporate values.

Analysis of companies that have been certified as complying with the Employer of Choice for Gender Equality (EOCGE) framework of Australia’s Workplace Gender Equality Agency (WGEA) found the average gender pay gap to be 17.4 percent, compared to 43.4 percent for employers that had not attained certification.

Certified companies showed better outcomes across the range of WGEA metrics, including having more women on governing bodies – 37.2 percent compared to 31 percent – and providing more employer funded parental leave, an average of 16.7 weeks compared to 10.2 weeks.

Men were also almost twice as likely to take primary carer’s leave in EOCGE-certified companies than their counterparts in non-certified businesses.

The correlation of pay gap statistics – which WGEA will be legally required to publish from early 2024, thanks to the recent passage of the Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Bill 2023 – with the adoption of formal standardised guidelines confirms that certification programs can be powerful tools for improving employment dynamics.

The results “show that with intentional leadership and a commitment to gender equality, an employer can reduce their gender pay gap for the benefit of all their employees,” WGEA director Mary Wooldridge said, noting that the framework “continues to expose [CEOs’] blind spots and challenges, drives them to continually improve, and keeps them focussed on their gender equality objectives.”

Certified employers, she added, “are delivering an approach that results in better support structures in place for working families; stronger actions to address pay inequalities; and strategic recruitment, promotion and retention practices that encourage the full participation of women at work.”

The Secret Sauce For A Diverse Workforce

Yet for all the improvements some companies have seen, entrenched pay gaps continue to plague even the best-intentioned organisations. Grattan Institute CEO Danielle Wood said during an IWD 2023 webinar that efforts to “decompose” the gap often hint at “a big unexplained component.”

“Some people put it down to discrimination, but we can’t say for certain what’s going on,” she said. “But one thing that always shows up is industry or occupational segregation.

“One thing we do know about the gender pay gap,” she added, “is that when firms and industries embrace policies, structures and processes to address it, they are more successful in reducing the gap – and industries that are more likely to embrace good practice, such as professional and scientific services, finance and public administration, have seen more progress in closing the gap compared to sectors where they’re less likely to embrace those things.”

The consequences of such practices are writ large in diversity statistics that continue to highlight just how far off the mark many firms still are.

A 2021 Aspen Institute analysis identified yawning demographic gaps in the US cybersecurity market, where – apart from the lingering challenges that see women comprising just 24 percent of the cybersecurity workforce – Black workers comprise just nine percent of the workforce compared with 13 percent of the population.

The gap is even larger for Hispanic workers who comprise just four percent of the cybersecurity workforce but 19 percent of the population. Meanwhile, Asian cybersecurity representation is higher than the proportion of the general population.

After workshopping how to fix this, a panel of recruitment experts recommended three key steps to improve diversity in the recruitment and hiring process. These included collecting and sharing anonymous data about the characteristics that prove useful for successful hiring, establishing a group of experts to help cybersecurity employers rewrite job descriptions without jargon, and reviewing background check processes to ensure they are “appropriate, fair and equitable”.