Countries where government and business work together to resolve the pay gap by taking actions suited to their circumstances and their own unique mandates are the best way forward

Opinion: There has been an ongoing debate about New Zealand’s gender pay gap, which stands at 9.1 percent – what causes it and what we could do to close it. Regrettably, some of the commentary is simplistic, as if the problem can be solved overnight. Evidence from around the world suggests that closing the gap will take concerted effort in a large range of areas for an extended period of time.

The causes are complex and relate to a wide range of issues that are often hard to resolve. But we should still move forward energetically and faster than at present. We need to focus on taking the most impactful actions and doing them well.

Some elements of the gap will be influenced by New Zealand’s particular circumstances. For example, the average size of our firms or the industries that we concentrate in. But there is an awful lot we can learn from international experience as well, because the gender pay gap is a global problem.

One striking feature of the global situation is that nearly all of the countries with which we normally compare ourselves – the UK, Australia and Ireland for example – have quite structured ways of reporting and then taking action on the gap.

All of those economies have some version of compulsory public reporting of gender pay gaps. Usually this takes the form of standardised reporting carried out by larger private sector businesses and government agencies.

Some of that is already going on here in a voluntary way with a number of large businesses and government agencies now reporting their gender pay gaps. For example, Westpac and a number of other New Zealand corporates regularly report their gender pay gap along with a commentary of what they are doing to close it.

Most large multinationals operating in New Zealand will be reporting their gender pay gap at global or regional level. Government agencies also report their gaps, but regrettably not in a very public way, and neither with much evident action planning around what is being done to close them. More can be done to encourage this trend.

Reporting the gap in a standardised and simple way is valuable because it shines a light on the problem and allows comparisons, but allows organisations to take whatever action they think is appropriate to resolve it. Not all gender pay gaps are the same, neither will they be solved by doing the same things.

The fact is that the causes of the gender pay gap are massively complicated and will often take time to resolve, no matter the good will of leaders of the organisation.

Other countries engaged in gender pay gap reporting understand this and are finding ways to try to encourage and inform action from organisations in the public and private sectors.

One of the dangers of gender pay gap reporting is it can turn into a blame game exercise, focused only on private sector businesses, when many of the solutions will be out of their direct control. For example, the widespread provision of fit-for-purpose childcare, careers advice for young women, childcare legislation and skills training are all areas where businesses are usually not directly involved, yet are key elements in resolving the gender pay gap.

Countries where government and business work together to resolve the pay gap through taking actions that best suit their circumstances and their own unique mandates are the best way forward.

The UK has established a Government Equalities Office that regularly publishes research on things such as the gender pay gap so that businesses can be well informed about what actions they could take to resolve it.

A recent GEO report on evidence-based actions for employers to close the gap mentions a number of simple, effective actions: to always include women on shortlists for recruitment and promotion, to use skills-based assessment tasks in recruitment, and structured interviews for recruitment and promotion. These are all examples of things that could be done by nearly all employers, large or small.

That same study suggests that some other actions commonly carried out by larger organisations may be less effective, for example unconscious-bias training or even diverse selection panels.

This kind of partnership between government agencies and employers, working with our unique circumstances but actively learning from others globally to inform public and private sector actions, is where New Zealand needs to be.

The key is to not play the blame game and not to simply force compliance with reporting requirements. That will lead to a compliance mindset, where employers are scared to innovate or take a risk.

Instead, we need to engage in a proper public debate about the best way forward. Government doing what it and only it can do to close the gap and employers being encouraged and supported to actively and energetically focus on resolving the problem at their organisation. And to recognise that it won’t happen overnight.

Overseas’ experience can teach us a lot. We need to be open to expanding and accelerating our own efforts as a result of that learning.

As director of Iron Duke Partners, a Wellington-based Public Policy Advisory Firm, Phil O'Reilly is chair of the board of the Business and Industry Advisory Committee to the OECD and a member of the Governing...

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