Gender pay gap widens where women hold most top jobs

A little gem found by our Network President, Nada Vujat

A new report reveals that while increasing the proportion of an organisation’s female managers reduces the gender pay gap, it perversely blows out again when the majority of senior positions are held by women.

According to the gender equity insights report released overnight by the Bankwest Curtin Economics Centre and the Workplace Gender Equality Agency, men in top-tier managerial positions earn on average $93,000 more total remuneration than women, a difference of almost 27%.

This improves under a gender-balanced leadership team, with the gender pay gap shrinking to about 10% when organisations appoint women equally to senior leadership positions, such as HR, strategy, operations and finance chiefs.

But the “most perplexing finding”, according to author and BCEC principal research fellow associate professor Rebecca Cassells, is thatonce the management environment becomes heavily dominated by women the pay gap again increases, reaching 17% where women comprise more than 80% of managers.

Likening the situation to a “kind of pedestal effect”, Cassells told Workplace Express that when there are fewer men in top roles they become “more highly valued and put on a pedestal”.

Unlike when women make up the minority in leadership positions, men in this context might be more likely to be revered, looked up to and fast-tracked to positions of higher seniority, she says.

Among possible explanations for the anomaly, Cassells lists social norms, conscious and unconscious bias and deep conditioning beginning from a young age when girls become used to seeing men in their families, society and through media presented as experts, decision makers and leaders.

Even at graduate level, men’s pay packets outstrip women’s, with women 18% less likely to access the highest graduate salary bands in excess of $80,000.

Cassells says that as women have become more highly educated, “we would expect this to reverse the pay gap”.

While part of the issue might simply be a greater prevalence of men seeking higher-paying positions, Cassells suggests that if employers are vigilant about creating equitable workplaces, “they might see some surprises” looking at what measures they have in place and closely examining their practices.

For employers who get the gender balance right, she says known benefits include superior business performance, better governance, less likelihood of fraud and improved decision-making.

According to the report, the 16% gender pay gap among the general full-time workforce, where women on average earn 84% of a man’s pay packet, is “a point-in-time snapshot of a picture that has endured for decades”.

Twenty years ago, the full-time gender pay gap was 17%, with women earning on average 83% of a man’s pay,” the report says.

It also reveals the pay gap is exacerbated at higher management levels due to higher levels of discretionary pay awarded to men, with female executives paid on average $40,000 less than men annually, increasing to $75,000 if total remuneration such as bonuses and other discretionary pay is included.

The report noted the evidence on gender pay gaps in Australian workplaces “paints a worrying picture that indicates major policy challenges for the present and the future”.

For the full report, see below: 

Gender equity insights 2017: Inside Australia’s gender pay gap, Bankwest Curtin Economics Centre and Workplace Gender Equality Agency, February 2017

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