Business

More women on boards would reduce gender equity gap

 

As the owner of an in-home health care company her mother started, Anna Shepherd has never had to battle the gender pay gap.

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"I haven't seen it in my world," the chief executive of Regal Home Health says. "I have found that people want to work with good people."

But the average top-tier female manager earns $100,000 less per year than male counterparts, with the gender pay gap widening the higher they climb, a new report has found.

Curtin University researchers and the Workplace Gender Equality Agency, who produced the study, also found the gender pay gap narrowed if the number of women on corporate boards increased.

Increasing the share of women on boards from zero to half reduced the gender pay gap by 6.3 percentage points.

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The report also found that gender pay gaps for managers were smaller in male-dominated industries than ones that were female-dominated.

But differences in the gap emerge across various professions and among part time and casual workers.

When it comes to part-time workers, the pay gap is marginally in favour of women. But for casual workers, it swings in favour of men.

Women in casual work can expect to earn a full-time equivalent salary of $5666 a year less than men.

Women working full-time in the financial services industry earn on average 35 per cent less than men.

Overall, the gender pay gap for full-time workers stands "stubbornly" at around 18 per cent, with women earning on average 82 per cent of a man's pay.

The gap increases to about 24 per cent – differences of $17,000 to $27,000 a year – when full remuneration is taken into account.

But women in management could generally expect to earn almost 29 per cent less than men – an annual difference of almost $100,000 in their total pay package, with women earning on average $244,569 compared to men on $343,269.

Professor Alan Duncan, from the Curtin University business school, said the research had "uncovered some of the strongest evidence to date that shows greater representation of women on boards is associated with a significant reduction in the gender pay gap".

Libby Lyons, director for the Workplace Gender Equality Agency, said she hopes "the somewhat startling findings outlined in this report – such as the average $100,000 pay gap between men and women key management personnel – encourage reflection and action at the highest ranks of corporate Australia".

The new report, Gender Equity Insights 2016: Inside Australia's Gender Pay Gap, uses data from 4 million workers and 12,000 employers collected by the Workplace Gender Equality Agency and analysed by the Bankwest Curtin Economic Centre.

The analysis shows that if women and men move through managerial positions at the same pace, working full-time and reaching a key management role in their 10th year, men can expect to earn $2.3 million and women $1.7 million in base salary – a difference of $600,000.

The report author, Bankwest Curtin Economics Centre Associate Professor Rebecca Cassells, said large and persistent gender pay gaps at management level suggested "preferential recruitment and wage treatment of men over women".

"This is further evidenced by the greater additional remuneration that men receive, compared to women, beyond their base salary in the form of bonuses and other discretionary pay," she said.

Sophie Brown, head of human resources for Hilti Australia, which supplies power tools and services to the construction industry, said the company takes pro-active steps to eliminate disparity in pay between the genders.

"As part of our annual salary review we do a check from entry level to the executives to identify if there are any significant differences and make any adjustments accordingly," she said.

"When women fall behind in earning is when they are on extended periods of leave. We also ensure that people taking a break don't fall behind in their earnings, so we apply a CPI salary increase on an annual basis if eligible employees who have been sick or on maternity leave."

Ms Shepherd joined Regal in 1984 after her mother asked her to "help out for a month with admin".

"Thirty-three years later, I now own the company," she said.

Ms Shepherd said she never experienced discrimination as one of 16 women and 100 men at Harvard Business School.

"They embraced women in business," she said.

Although she does not believe in female quotas on boards, Ms Shepherd understands that increasing their number can help promote greater equity.

"And there a lot of highly qualified women out there."

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