Being proactive helps employers not only identify pay gaps but improve employer brand
Late in July, more than 30,000 Te Whatu Ora nurses reached a milestone agreement on pay equity with the New Zealand Nurses Organisation (NZNO) and the Public Service Association (PSA).
The new pay rates will provide another pay equity pay increase of 6.5% for senior nurses, and 4.5% for registered nurses, enrolled nurses, health care assistants and mental health care assistants.
While there’s still a long way to go towards levelling the playing field, the government’s recent announcement of legislation requiring large employers to publicly report their gender pay gaps is a step in the right direction, academic Katherine Ravenswood hopes it will be extended further.
“Our pay gap [in New Zealand] is around 8% now, so that's one of the lowest ever in this country, but that overall gender pay gap has been at around 10% for over a decade,” says the professor of industrial relations at AUT and associate director at the New Zealand Work Research Institute.
HR leaders have an exciting role to play in making change in pay equity, she says, and there’s still plenty of scope to make that happen — not just in terms of gender, but also ethnicity.
That general figure of 8% hides the “bigger pay gaps that occur in some industries too,” says Ravenswood, “but also more importantly, that occur when you consider ethnicity. I think that’s our biggest mistake – that we’re not addressing the ethnic pay gap. Currently the Equal Pay Act is only sex-based.”
For Māori and Pacifica women, and Asian and other ethnic women in this country, the pay gap is significantly greater, she says.
While the recent agreement for Te Whatu Ora nurses does make advances, Ravenswood would like to see it go further.
“None of these settlements are necessarily addressing any of those differences based on race. And I think that's one of the key things holding us back in being amongst the really top countries [in terms of pay equity].”
Advances have been slow due to historic discrimination, she says, but what HR leaders are capable of in terms of speeding up the process to create a fairer system is powerful. She notes that many will have already been looking overseas to keep track of trends, and a number will already be tracking pay equity through their company data.
Being proactive like this enables employers to identify any pay gaps and bring the issue to the table, understand why it’s happening, and scrutinize policy, says Ravenswood.
“In any workplace, there'll still sometimes be quite large pockets of people who will say, ‘Gender discrimination doesn't happen anymore’. And no one will dare mention the fact that the system might be racist, and that actually people of ethnic minorities will experience a greater gap,” she says.
“I think [compulsory pay reporting] will normalize an understanding that there is discrimination on the basis of gender and hopefully whichever government is in will also make sure it’s on the basis of ethnicity as well. Then the facts will be there and it won't be controversial, because it's something everyone knows and reports.”
Ravenswood hopes it creates social change that in turn will make it easier for governments to introduce further policies to reduce ethnic and gender pay gaps.
Finding out where the pay gaps are within the workplace is the best starting point, and also why they’re happening, she says. Next is to identify whether any gap reflects “outdated social norms” or whether they’re down to managerial practice.
If it’s the latter, the action for change is upskilling managers involved in the recruitment process and ascertaining whether there’s unconscious and conscious bias, says Ravenswood.
“It’s important to make sure managers know that the organisation wants to be offering the same regardless of gender or ethnicity. Also asking whether there’s a need to update or strengthen appointing policy, or whether it’s actually a difference in occupations across the whole workplace. And then you know exactly where you can go to try and fix those different gaps.”
There are many benefits to be gained by organisations taking a proactive stance on this, she says. Firstly, being ahead of the curve means that when the legislation does come in, employers have already nailed legal compliance.
“Also, it becomes part of your brand and who you are as an employer - being an attractive employer to better applicants and having a greater pool of applicants as well.
“Particularly in healthcare or any occupation or industry where we have global workforce shortages, anything that says, ‘Hey, we are actively trying to do our best as an employer’ will give an organisation the edge when it comes to attracting workers.”
