How business leaders can prepare for pay transparency changes

When the Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Bill was passed in March this year, it marked a significant turning point in how businesses communicate about pay.

Under the reforms, gender pay gaps for employers with more than 100 employees will be published on the Workplace Gender Equity Agency (WGEA) website.

It will allow employees, shareholders and other internal and external stakeholders the opportunity to compare the data across other organisations and industries.

“It’s more than 10 years since Federal Parliament first passed the Workplace Gender Equality Act 2012,” WGEA said. “These reforms will improve transparency, accountability and motivate action to accelerate progress on gender equality in workplaces.”

For business leaders, the risk is not in disclosing the pay gap data, it is in managing the communication and impact of the data, according to a report by consulting firm Aon.

“Without proper context, disclosing pay gap data can lead to risks like reduced employee engagement, challenges in attracting and retaining talent, and damage to brand and reputation,” the report said. “These factors can, in turn, considerably impact an organisation's financial performance.”

So what can business leaders do to prepare for the new changes?

How to prepare for pay gap changes

Aon highlighted best practice steps to navigate the new pay gap reforms in its report, Preparing for pay transparency: three key steps.

One of the first steps for business leaders is to consider how pay equity fits into their organisation’s diversity, equity and inclusion strategy (DEI) and overall employee value proposition (EVP).

When discussing this issue with board members and executives, the report highlighted key questions business leaders should consider:

• Is compliance your goal or should you be aiming for best practice?
• What will it cost to address pay inequity within your organisation?
• Which policies and practices – both pay specific and people and culture related – must be reviewed to tackle underlying causes and drive lasting change?
• Where should you prioritise investments to address pay equity?
• What is a realistic timeframe for implementing remedial actions?

“Taking a step back to assess how pay equity aligns with your organisation's DE&I strategy and EVP can help prioritise and define an approach that aligns with overall organisational goals,” the report said. “By doing so, your organisation can establish a strategic action plan that aligns with your organisation’s journey to maturity in DE&I.”

To find out more ways to prepare for the new reforms, check out Aon’s report, Preparing for pay transparency: three key steps.