Come on New Zealand — pay equity isn’t that difficult
Like many Kiwis, I think of New Zealand as a comparatively liberated country that at the core believes in equality. So, it’s surprising that the latest data shows we’re still paying men more than women.
New Zealand has a 12 per cent gender pay gap, a gap that has barely shifted in 14 years since the first comprehensive pay equity report was released in 2003.
At least 65-80 per cent of the gap is now not explained by any specific factor, as research published this month by Minister of Women’s Affairs and Deputy Prime Minister Paula Bennett shows. She attributes much of that gap to unconscious bias.
There is plentiful debate around the various complex causes of this gap, from the strict time demands of high-pressure executive jobs that sometimes penalise even the smallest career break, through to younger women lacking confidence in promoting themselves and negotiating pay increases.
But what’s often overlooked is the reality that achieving pay equity is not difficult. It just takes some determined effort.
At Contact Energy, we’ve turned a gap of around 7 per cent some six years ago into a gap of 1.7 per cent.
Whilst we continuously strive for a zero gap, minor shifts are now predominantly related to non-gender issues such as employee tenure and experience. Pay equity is achievable and the recipe is not complex.
It involves regular scrutiny of the data, analysed grade by grade, which is the only fair way to do so. We report internally, to a remuneration committee, and externally through our annual report. In future we’ll report with the Champions for Change initiative too.
We task ourselves with ensuring intervention where issues arise, and influencing managers with the data to make changes to remuneration recommendations when necessary.
The other ingredient to pay equity is having remuneration systems that remove gender from the decision process.
We factor in only performancebased measures such as employee skills, experience and achievements, in the context of market rate by grade.
Even so, there is still potential for unconscious bias to creep in when managers are doing remuneration reviews, as they know the gender and other aspects of diversity such as ethnicity of their employees.
But building awareness around people’s tendency to be biased around difference helps address this. So why does it matter? Pay equity is fundamental to diversity in an organisation and diversity of thought matters. How can you be a truly customer-focused organisation if your people don’t reflect the diversity of society you serve?
Diversity is also vital to navigating the massive change and disruption affecting all sectors. Traditional “groupthink” doesn’t help you innovate and develop new solutions.
Pay equity is achievable and the recipe is not complex.
That’s why Contact is now looking at pay equity through the broader lens of diversity. We want to attract the best mix of employees — Maori, Asia-Pacific peoples, millennials to veterans, and the full spectrum of genders — to bring new ideas, news ways of thinking and working.
But there’s no sense in hiring diversity into an organisation that is not inclusive.
Our leadership development now focuses on how to lead inclusively — not just encompassing Maori and ethnic minorities and genders — but millennials who within four years will make up around 40-50 per cent of our workforce.
Pay equity is not simply a matter of paying women — and minorities — more. It’s a matter of paying people equitably within a culture that empowers and gets the best from each person’s diverse perspectives.