8 ways business leaders can fix the gender pay gap
Want to extinguish the gender pay gap? Here’s what senior chartered accountants say is needed to make wages truly equal.
- Senior male CAs in Australia earn up to A$50,000 more than their female counterparts; in New Zealand it’s NZ$60,000 more.
- Shifting the focus to outputs rather than hours worked could help even the gender pay gap.
- Leaders must drive the change by encouraging women to apply for senior positions and making more flexible work the norm.
By Katie Walsh
If there is any doubt about the timeless and global nature of the gender pay gap, an almost two-decade old study of chartered accountants in the United Kingdom is a useful point of reference.
In 2004, the Flexible Working and the Gender Pay Gap in the Accountancy Profession report showed women who worked flexibly or part time typically did so to combine working with caring commitments, in ways that damaged their career and had a clear impact on their current and future salary.
The findings are similar to those revealed in the CA ANZ 2021 Remuneration Report: in spite of laws mandating pay equity, and even with higher numbers of women entering the profession and efforts to promote gender-neutral flexibility, the pay gap between men and women persists.
It’s an issue that exasperates members.
“We thought we were doing so wonderfully and may have became arrogant about it,” says Ming Long AM FCA, AMP Capital Funds Management chair and a CA ANZ board director.
“Our complacency has allowed a gender pay gap that continues to entrench women in economic dependency. As chartered accountants we should know better.”
Picture: Ming Long AM FCA.
“Our complacency has allowed a gender pay gap that continues to entrench women in economic dependency. As chartered accountants we should know better.”
Long is under no illusion there is a quick fix for the pay gap that sees senior male chartered accountants in Australia earn up to A$50,000 more than their female counterparts, and in New Zealand NZ$60,000 more, but her message is clear: “We now have an opportunity as difference makers to change the trajectory of our legacy; a legacy that results in women’s economic freedom – the same economic freedom as men.”
She is among a group of leading CAs who shared their insights with Acuity on crucial next steps. For Long, it involves a journey that will demand members’ vigilance, resilience, leadership and courage.
“It has to be constant, it has to be every generation, it has to be every level,” she says.
1. Measure the data and follow through
Sue Horlin FCA, Sydney managing partner for PwC Australia, champions transparency as one of the most important keys to improvement. The firm’s gender targets are more than aspirations, she says – they’re finely measured along with performance, promotions, bonuses and pay rises.
Horlin says it’s an important cycle that must be consistently followed over time to ensure enough women are rising up the ranks ready for promotion.
She recalls a promotion round where the selections of one team had a male skew.
“We picked up the phone to the leaders and said ‘Go into your business and make a list of women who you think are ready to take a position but who have self-opted out and ask them to apply; tell them you think they’re ready’.
“That did two things: the women got the promotions they deserved and senior leaders got a really good lesson.”
The next critical element is leadership, including having women in powerful profit-and-loss (P&L) and decision-making roles where they’re considered peers by the men they lead with.
“The most important thing is to have senior women in the room,” says Horlin. “They have the opportunity to help suggest policies; that’s the quickest, easiest, simplest way to reduce the gender pay gap.
“I don’t pretend to understand what it’s like to be a man and I imagine there’s a lot of challenges, so if I want to understand I might ask a man.”
Despite prioritising gender equity and having progressive, targeted policies, Horlin admits the firm doesn’t always get it right. “We try to listen to our people. You need a culture where women feel safe and confident to say what they think and to call it out when they feel like they haven’t been fairly treated,” she says.
“The best leaders in any organisation have an open, curious mindset of assuming they don’t have all the answers or their perception is not the only one.”
2. Stop making women feel guilty and focus on output
Another critical piece involves a mindset change: paying people according to output rather than old biases or perceptions around presence and face time.
“Women often on part-time or flexible working loads feel they need to give up 10-20% of their salary. Yet if you asked ‘are you delivering 100%’, most women would say ‘I am. I don’t go to this lunch or that meeting but I’m delivering’,” explains Horlin. “Why then are you still allowing me to pay you 10-20% less? This is industry wide. This is wider than our industry.”
Part of that is driven by women’s guilt about taking time out to engage in family life – picking up kids from school or going to a reading group.
“Sometimes they might want to give less output and that is supported. But sometimes women are forgoing some of their salary for guilt. That is difficult to understand if you’re not a woman who’s experienced it. Leaders need to step into that conversation and ask,” Horlin says.
Having men access flexible working and family-related policies is a critical part of the shift. Horlin encourages men to take parental leave.
One newly admitted partner spoke with Horlin about his day at home with the kids and how it was important for his team to see it.
“He and his wife both work full time. We’ve got these young men saying, ‘I’ve got the opportunity to lead here and I can show teams it’s possible’.”
Horlin sees it as a sign that the firm’s policies are becoming sustainable, to a point where people are starting to lead on their own. “We’ve got a long way to go but it is so rewarding to see.”
3. Judge a role by what it’s worth
Craveable Brands chief executive officer Karen Bozic CA says employers should not fall into the trap of paying what they might be able to get away with, especially when it comes to allowing flexible arrangements.
“You’re either legitimately up for flexibility because you think productivity is equal or more – therefore you don’t apply a penalty on the way you mutually agree for that work to be undertaken – or you’re not.”
While Bozic views a hybrid model involving a mix of working from the office and home as ideal for connectivity, she says organisations must make an effort to ensure those working from home are visible when it comes to career and remuneration decisions.
“Unsophisticated observations like ‘I see the person in here working hard all the time’ are the worst way to decide remuneration,” she says.
Picture: Sue Horlin FCA, Ming Long AM FCA and Karen Bozic CA. Image credit: Graham Jepson.
“Unsophisticated observations like ‘I see the person in here working hard all the time’ are the worst way to decide remuneration.”
Similarly, people returning from a career break – common for women especially in their 30s when many have children – should be remunerated on par with male peers. “You didn’t ask them to do 30% less work when they came back,” she says.
“You need people to be very principled about this, to say ‘we’re not going to take the easy way’. The real approach is to say what is the role worth?”
Bozic recalls a remuneration discussion in her 30s, when she was questioned about how seriously she took her role given she had just taken maternity leave. “If employers are not focused on it, you find yourself being in a position where working or caring is very hard, it’s exhausting.
“You find work’s OK. You’re surviving. You think less about yourself. You suck up a lot of stuff you really shouldn’t.”
Bozic says women need to lean in and fight for entitlements but is adamant that nobody should be put in that place to begin with.
“To be very clear, the responsibility for rectifying it is the employer’s,” she says.
The size of the pay gap may require a multi-year effort to fix, but Bozic says employers must persist. Having a leadership team aligned with the purpose makes it easier.
4. Leaders should tap talent on the shoulder for promotions
Leading with a gender-neutral mindset is something that CA ANZ chair John Palermo FCA credits for the equality in pay and representation at Palermo Chartered Accountants, his co-owned practice in Perth.
“I say it’s subconscious because it is from us; it comes from the leadership,” he says.
“We have offered all our people the same conditions of work and opportunity to dictate their earning capacity [and] continue to have greater than 50% female representation.”
Picture: John Palermo FCA.
It was a topic on which everyone who spoke with Acuity were aligned: culture is driven from the top.
Sue Pak FCA, head of accounting at software giant Xero, encourages firms and organisations to proactively approach talented staff for roles.
“If you’ve got people internally you think might be good for a role just say, ‘Hey, I think you’d be really good’,” she says.
Picture: Sue Pak FCA.
“If you’ve got people internally you think might be good for a role just say, ‘Hey, I think you’d be really good’.”
Pak says women sometimes hold back until they believe they can do the whole role.
“If you can do 70% just go for it, you’ll learn it on the job anyway,” she advises.
“I’m often asked by women ‘Do you think I’d be good enough for that?’ Whereas men often just say ‘yeah’ right away.”
Pak recalls a candidate with a great CV who walked into the interview and proceeded to highlight all the things she couldn’t do.
“I put my hand up and said, ‘I’m going to stop the interview – I want you to go out, have some water, come back and start again and tell me what you can do. She ended up working with Xero and is still there,” says Pak.
Addressing unconscious bias via training, rewarding talented women and embracing flexible work practices will also contribute to the wellbeing of staff; something that brings productivity and profitability pay-offs, says Pak.
Xero has launched a new program of inclusive benefits for staff raising a family including increased leave entitlements; it also undertakes an annual gender pay gap analysis comparing what employees get to market rates.
5. Make flexibility the norm for everyone
The notions about flexible work have changed dramatically over the past year, but Pak says there are still firms with completely different standards and expectations.
“I’ve asked some people ‘Do you have flexible working?’ and one of the answers was ‘Yes. We allow people to work one day at home a week’.
“Maybe a few years ago I would have thought that was flexible but, after COVID, that’s not much. Especially if you’re in an office where you can work from home and most accountants can do that.”
A lot of it comes down to trust.
“If you trust your team to get the work done it doesn’t really matter if they’re not in from 9 to 5, it’s whether they get the work done,” says Pak.
Tony Johnson CA, EY Oceania CEO and managing partner and one of Australia’s Male Champions of Change, says the COVID crisis must be used to accelerate progress towards gender equality.
“We must not allow the disruption and uncertainty to slow us down – or worse still – move backwards,” he warns. “This will take concerted and deliberate thought and effort by all of us – men and women alike.”
6. Access available toolkits and make a start
Rob McDonald FCA, CA ANZ board member, Contact Energy chair and a director of New Zealand’s Fletcher Building, says it is about getting people involved and really “getting under the bonnet more and understanding it”.
“It’s going to take some leadership and it’s not just about having a couple of tools to solve it,” he says. “It’s about saying ‘we need a gender neutral workplace’ and looking at the clues which mean it’s not. It’s got to be driven from the top.”
Despite the clear data that a pay gap exists, seven out of 10 male CA ANZ members surveyed do not perceive that there is a problem. McDonald says the most powerful thing to change minds would be transparency at an organisational level.
McDonald comes at the topic from a perspective of understanding and empathy: he remembers being involved in decisions two to three decades ago that didn’t facilitate career breaks for women.
He also says many workplaces are shifting away from the old masculine “locker room” culture. “Businesses need to be alert to social behaviours in their workplace which are by their nature exclusionary to females.”
A suite of initiatives should be embraced together, he says. That includes strategies such as gender-neutral long lists and short lists to address the unconscious bias that can creep into recruiting.
“There’s no overnight fix and entities shouldn’t be shamed for their starting point. But they should be held accountable for their progress. If you have that inherent sense of fairness, it’s important.”
Picture: Rob McDonald FCA.
“There’s no overnight fix and entities shouldn’t be shamed for their starting point. But they should be held accountable for their progress.”
7. What women can do: articulate value, negotiate, mentor
In her role as a confidence and career coach, Kate Boorer FCA, CA ANZ vice-president and Pearman & Partners partner, regularly encounters women who are underpaid by 10-25% for their level of skills and experience.
She has seen women passed over for promotion and paid less than male peers or predecessors. Having waited patiently and loyally to be recognised and rewarded, some make up for years of salary lag in one step by moving to another organisation.
Her own research shows that one in two women feel underpaid by 10% or more. Boorer, too, experienced being paid less than her predecessor before she negotiated a significant salary increase in a prior role.
She encourages women to create a plan, clearly articulate their value, and negotiate harder – including when starting a role.
“I always ask HR people, anecdotally, ‘Do you notice men negotiate more on the way in?’ They say, ‘Absolutely’,” she says.
Picture: Kate Boorer FCA.
8. What men can do: embrace flexibility and show leadership
Long says there are men who, like women, are incredibly frustrated by some of the behaviours and attitudes and are channelling that frustration into action.
“I would love men to be on the same journey with us and many men are because they can see a benefit in the legacy they leave behind. I do lay at the feet of the people who have the power to make the difference and that’s predominantly men in leadership.”
Long points out the challenge of closing the gender pay gap is one uniquely fitted to the skills of CAs, giving them the capability to be at the front line and lead on the issue.
“We are so good with reporting and producing numbers with integrity; we’re great at insights, at solutions, at challenging,” says Long. “The accounting profession should and must lead on this.”
Long likens the issue to the current urgency around climate change, in which she believes accountants have an important role to play.
“This is right up our alley. There was an [Australian Broadcasting Corporation] article last year regarding climate change, saying accountants will save the world – we can do the same here.”
The Australian government delivered a widely welcomed A$1.7 billion boost to childcare subsidies in the 2021-22 Budget, designed to encourage mothers to re-enter the workforce.
Long believes a gender lens should apply to budgets more broadly because of the unequal impact.
“Our entire society, business, tax and financial system has been built on a foundation of the primacy of the male breadwinner – this cannot continue for the sake of both men and women,” she says.
“It’s time for chartered accountants to step into the arena to champion a different future, a more equal and egalitarian future.”
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