In July, the fourth iteration of the She’s Price(d)less was released, revealing that while the gender pay gap has not worsened, progress on closing the gap has indeed stalled. In fact, there has been no change in the gender pay gap in real terms between 2017 and 2020. 

The report found that, unfortunately, discrimination against women remains the single biggest driver of the gender pay gap, which now amounts to the equivalent of $898 million per week – almost $51.8 billion – in earnings in Australia. This is followed by the combined impact of family considerations, unpaid care and time out of the workforce. 

With Australian women among the most educated in the world and working more than ever, these results send a clear message: urgent action needs to be taken on both an organisational and systemic level. Without meaningful action, gender inequality risks becoming a permanent fixture in the Australian workforce. 

Here, we look at the main drivers of the gender pay gap in Australia, why addressing the pay gap will be of benefit for organisations, and steps employers can make to enact change. 



Diver #1: discrimination and bias 

Gender discrimination remains the leading driver of the pay gap, contributing to 36 percent of the gender pay gap, equivalent to $348 million annually. Though this is a decrease of three percentage points from 2017, this draws attention to the cultural and systemic attitudes that create a disadvantage for women in the workforce. 

Gender discrimination can occur in various forms within the workplace, either outwardly or covertly, and has been linked to practices such as workplace culture, hiring, promotion and access to training. For example, a 2019 study by Workplace Gender Equality Agency on gender equitable recruitment and promotion found that women and men are held to different standards in recruitment processes, with women more likely to face tougher evaluation standards, or to have their achievements and qualifications more closely scrutinised. This study also found that women are more likely than men to be penalised for attempting to negotiate for higher pay. 

Hiring and promotion are areas where organisations can, on a micro level, make a difference. Educating Hiring Managers and others involved in the recruitment process will be key to minimising the impacts of unconscious bias, which can result in prejudicial decisions. These types of bias can take various forms, such as the stereotypical belief that women are less committed to their work, or need to be protected from overwork, which limit their ability to be hired into higher paying leadership roles. Furthermore, job ads should be monitored to ensure that gender-neutral language is used, so as not to alienate potential candidates. 

Driver #2: care, family and workforce participation 

Twenty percent of the total proportion of the gender pay gap is explained by career interruptions, which, for women is largely due to raising a family or caring for other family members. 

There is the perception that taking time out of the workforce will result in depreciated skills and missed opportunities for upskilling and training, which often results in individuals returning to the workforce at a lower status or in lower paid roles. Interestingly, research suggests that career breaks taken for the purpose of education or self-employment have little effect on an individual’s pay, however time spent caring for family members does reduce future wages. 

Where women face penalties in the workforce for parental responsibilities, also known as the “motherhood pay gap”, men are rewarded. In fact, data shows that after having children, men are seen to experience a “fatherhood premium”, gaining an approximate 7.3 percent to their wages. 

Another major contributing factor to the wage gap is part-time employment, which increased from seven percent in 2017 to 11 percent in 2021. This is due to women making up a larger percentage of the part-time workforce, which was significantly affected by Covid-19. At the height of the pandemic in 2020, three out of five job losses in Australia were female, with the employment drop related to restrictions and lockdowns that significantly impacted sectors with high levels of women’s employment, including hospitality, retail trade, education and training. This overrepresentation of women in part-time and casual roles at the start of the pandemic made them more vulnerable to job losses and less likely to be eligible for government support, such as the JobKeeper payment. 

Driver #3: occupational segregation and industrial segregation 

Industrial segregation refers to the unequal distribution of women and men in certain industries, with women typically making up a larger portion of the workforce in lower paying industries, such as education and primary care. Occupational segregation pertains to the underrepresentation of women in high paying roles, such as management and chief executive positions, and overrepresentation in low paying jobs, such as care work. 

In 2020, gender segregation in type of job (including both occupational segregation and industrial segregation) accounted for 24 percent of the gender pay gap, an increase from 17 percent in 2017. 

Data from the WEGA and ABS makes it clear that Australia has a highly gender-segregated labour market, with prevalent gender norms and stereotypes inferring that there are some jobs which are “men’s work” and others that are “women’s work”. Organisations within male dominated industries should look at what they can do to encourage more women into their workforce, and ensure their female employees are being given the same training and promotion opportunities as their male counterparts. With less than one in four Australian organisations having a gender-balanced leadership team, this is likely an area almost every company could improve upon. 

How employers can take action 

While action needs to be taken to address the gender pay gap at a policy level, there are steps that organisations – and the leaders within them – can take to make positive change. It is important to understand that by closing the gender gap and removing the barriers that allow women to fully participate in the workforce, organisations would have the opportunity to fully utilise the potential of their human capital and increase female worker productivity, thereby increasing profitability. This is, of course, on top of the obvious ethical rationale. 

So, where can employers start? There are numerous actions employers can enact to address the above underlying drivers of the gender pay gap. Some of these include: 

• Undertaking gender pay gap audits and actioning findings. 
• Addressing discrimination in work practices such as hiring, promotion and access to training. 
• Providing increased transparency and reporting on gender pay gaps, which holds organisations accountable. 
• Increasing the share of women in leadership positions, through targets or other diversity policies. 
• Developing networks of advocates for gender equality among men and women who can address barriers and affect change. 
• Assessing and amending where necessary your family and caregiving policies, including; redesigning part-time roles for female managers, increasing availability of flexible work, and enhancing availability and uptake of shared parental care. 

It is also important to consider the intersectionality that comes into play with regards to the gender pay gap. While there is not a wealth of Australian data, overseas research shows that a woman's race or disability status can exacerbate the pay gap. The same can also be said for those identifying as non-binary. 

With a SEEK data revealing job ads were 52.4 percent higher in June of this year compared to 2019, it is timely to consider this report and the changes that organisations can make to correct the gender pay gap, from recruitment and retention through to promotions and career development opportunities. 

If you’re looking for a recruitment partner whose consultants are trained in non-bias, ethical hiring practices, contact Bayside Group today.