Closing the gender gap: leadership, policy and equality

Garreth Hanley:
This is INTHEBLACK, a leadership, strategy, and business podcast brought to you by CPA Australia.

Christine Gounder:
Welcome to this special International Women's Day edition of INTHEBLACK, where today we are focusing on gender equality. Joining us is Prue Gilbert, founder and CEO of Grace Papers, a social change business which provides coaching and consulting solutions to promote gender equality in the workplace.

Welcome to INTHEBLACK, Prue.

Prue Gilbert:
It's an absolute pleasure to be here.

Christine Gounder:
Prue, it's been 11 years since Grace Papers was founded. Why did you feel the need to establish the organisation?

Prue Gilbert:
It's a great question. I think to help answer that question, I probably need to go back a little bit to my previous life before Grace Papers. I'm actually a lawyer by background. I did my time in private practice. And then I was general counsel of a publicly listed company for a number of years, where I also had the opportunity to drive the gender inclusion strategy, and also the First Nations supplier contracts and approach and our commitments there.

And what I learned was how we could better use data to understand some of the different challenges that women, in particular back then, and I'm going back over 15 years now, were sharing around their lived experience of the workplace. We could see that there were not terribly many women who were making it into leadership roles. And there was increasingly an understanding of the opportunity that increasing women's participation, both in workplaces generally, but also their ability to perform in leadership roles, would have on organisations from a performance perspective, from a profitability perspective.

I also was doing that role at a time when there were a number of key pieces of legislation introduced. There was the Paid Parental Leave Act, there was the Fair Work Act, and there was also the ASX corporate governance principles relating to diversity. And that actually gave us a springboard for saying, right, well, it's not just the right thing to do anymore, but you've actually got to meet some compliance obligations on this front as well.

Christine Gounder:
Prue, what are some wins in the workplace gender equality space that you've seen for women in the last decade?

Prue Gilbert:
One of the areas that I look at is the uptick in women's participation in the workforce, which continues to grow and expand. And that is significantly due to the introduction of paid parental leave, but also the reduction of discrimination through those parental leave experiences.

And it's extending the duration of which they're actually working. So that has a massive positive impact on their superannuation and their overall lifetime earnings. So that's certainly one area where, yeah, I feel really proud that we've made a significant difference. Are we there yet? No. But certainly those retention rates of women after they've taken parental leave have improved sort of by 20% to 30% in the past 10 years.

We are also continuing to see an improvement year on year of the number of men actually accessing paid parental leave as well. And that's due to organisations actually taking the lead on that front and saying, well, if we actually want to address the gender norms and improve women's participation in the workforce, then we need to actually redistribute caring responsibilities so that they are more equitable.

I think it's also a more progressive approach. We know that men want to take on caring responsibilities. We often ask them in the coaching that we do with men, what's your parenting legacy? How do you want your children to remember you as a parent? And as they reflect on that, they start to come to the realisation that, oh my gosh, what an opportunity taking paid parental leave actually is to spend, whether it be two, three or four months of dedicated time with their child.

And that inevitably shifts those gender norms at home as well so that, both parents, regardless of their gender, can actually feel like they're more fulfilled in both family and caregiving responsibilities, but also through their work as well.

We are also, over the past 10 years, seeing that gender pay gap reduce. And I think that goes to the heart of, you know, what gets measured gets managed. So where organisations are proactively managing and reporting against a gender pay gap, where they're proactively managing and measuring against their representation of women compared with men in leadership roles, looking at promotion ratios, looking at turnover, looking at recruitment and attraction numbers by gender.

And also looking at part-time promotions, for example, then that's where we actually see change. And so it depends on the organisation as to how data-driven their strategy actually is as to how much measurable change you'll be seeing.

Christine Gounder:
Well, those are some wins in quotes. You know, we're not there yet, as you say, but progress, any progress is good for gender equality. What are employers doing to improve the gender pay gap quickly so women are benefiting now, today?

Prue Gilbert:
So the gender pay gap has historically been fairly poorly understood. And so I think the first thing that organisations have had to do over the past 12 months in particular is educate their workforces as to what the gender pay gap actually is. And as opposed to what pay equity looks like.

So pay equity, you know, when we're talking about pay equity, we're talking about like-for-like roles. Am I paid the same amount as my peers for doing work of equal value? That has been the law for about 30 years in Australia. So hopefully they are doing that. And while we know that that number moves over time, every year throughout the year, based on, you know, who you bring in, what your turnover looks like, the Workplace Gender Equality Agency recommends that organisations close it at least once a year to zero. So that they are coming back to that baseline of zero.

It also does contribute or comprise about 3% of what we call the gender pay gap. And the gender pay gap is the, well, this year they're reporting on both the average and the median wages of men versus women. And what that shows is total take-home amount of money by gender. And it is influenced by a number of different factors within an organisation.

So the first thing that organisations have to do is understand the difference between the pay equity and the gender pay gap. But secondly, understand what are the key drivers of the gender pay gap and how can they actually start to address them? Which ones are relevant for their organisation?

The first key driver is around workforce composition. So if you have significantly more women in your organisation, but they're not in senior roles, then you're going to have a gender pay gap. And so you might be looking at what your promotion ratios are and making a decision around how you might address some of that promotion bias that could exist. So there's a deep dive that's required to look at that.

It could also be around pay distribution. So looking at, yes, the equal work for equal pay aspect. So that like-for-like piece. But also looking at the impact of discretionary pay. You know, bonuses and allowances, cars, so tools of the trade as well. And a lot of organisations found last year that discretionary pay was where their gender pay gap actually really exacerbated. Because those in higher paid roles, or more senior roles and also in sales roles were paid more from a discretionary pay perspective but we were dominated by men.

There's also an impact on mobility. We still tend to say that women comprise 70% of part-time roles. Yet just 7% or 8% of managers work part-time. So we've got a bias around part-time from a management perspective.

And we have seen a lot of organisations start to look at, well, how do we actually understand the capability set of our part-timers? And how do we put in place supports and an understanding and addressing that ambition bias that sits within it? Just because you're working part-time doesn't mean you are less talented or less capable. It actually means we need better role redesign in order to promote them further up.

So there are a number of different indicators that organisations have actually been looking at to think about, well, which ones do we actually start with? You know, where do we actually begin?

It's also understanding that, one of the reports that KPMG put out called She's Price(d)less shows that gender discrimination comprises about 36% of the gender pay gap.

Care family and workforce participation so time out for parental leave or working part time to care for small children, caring of elderly parents caring of family members with the disability, that comprises about 33%.

And then in Australia we are really still fairly-heavily segregated from an industry perspective as to the types of roles that people are actually working. So that the type of job that they've gone for, think a nurse versus construction worker – heavily segregated – that accounts for about 24% of the gender pay up as well

Christine Gounder:
So, what is stopping employers accelerating improvements so we see more change more quickly?

Prue Gilbert:
A data-driven approach has been probably the gap in it, for a long time, and reporting on it publicly. You know, organisations have had access to this data for a number of years now. They've received it. But it's taken until it's been published for them to actually start taking action on it.

So, I think that has been a key barrier. But it's also slow in some organisations. And sometimes I hear some of the challenges and I think, well, yeah, that is going to be slow to actually address. Think about an organisation who employs a lot of women in some of their frontline roles that are lower paid. They also might be very flexible roles. That is actually going to require an increase from a pay perspective across a whole industry in order for us to start closing that gender pay gap, for example.

Other organisations, it is more clear-cut. Women are not getting promoted in the same ratios as men and they're not actually recruiting in the same ratios as well.

I think it's also the way that organisations understand the gender pay gap. And we look at the gender pay gap as a risk tool for leadership and for boards, for example. And where there is a significant gender pay gap, it is also indicative of power imbalance. And power imbalance is one of the key drivers of sexual harassment. Christine Gounder: Prue, what are some of the benefits beyond closing the gender pay gap for employees of organisations who achieve greater gender equality?

Prue Gilbert:
It's so clear and the evidence is so clear that organisations who have more equitable gender balanced workforces are safer, they're more productive and they perform better. There's the workplace gender equality agency has actually done research on the causal impact from a performance perspective as well.

And it shows that when boards are more gender balanced and executives are more gender balanced, they perform better. And it has a direct correlation with their share price. So financial performance. But we also know that they're safer.

So there's less discrimination, there's less harassment. And when employers aren't distracted by having to navigate discrimination and harassment, it's just logical that they're going to focus more on their work. They're more innovative when they're in gender balanced teams.

And so I think it's really important to note that the arguments or the case for gender equality isn't actually just about more women. It's about gender balance. Because that's often where the innovations come from. And that it's also not a binary approach that we need to add an intersectional lens to that.

So that we are listening to diverse voices because, guess what, they're generally representative of organisations' customers. So when they have a better understanding of the customer's base that they're serving, they're going to deliver better solutions for those customers and therefore perform better.

Christine Gounder:
Prue, what priorities do you see as being the best areas for businesses to focus on between now and next year's International Women's Day? And what are your tips for us on the best way to progress these priorities?

Prue Gilbert:
I think over the next 12-months, organisations need to get really clear on the data that they're using to identify where their biggest opportunities are to improve. They also probably need to read the room. And by that, I mean, thinking about what is the appetite for change within our organisation in this environment.

What we tend to see is that there are two key intersections or intervention opportunities that organisations can really focus on to drive change. The first is that parental leave space. So while we see progress in terms of women returning to the workforce, utilisation of paid parental leave by men is still too low.

And promotion of women after they've returned from parental leave is also still too low. And we also still hear a little bit too much discrimination, bias that women experience while they're actually going through parental leave. And that contributes to the stigma around, well, why would I actually take that at the moment?

I think you overlay that with a more uncertain economic environment. And what we will see is that men will be less likely to take parental leave. And we're already in a declining birth rate era. 2023 was the lowest birth rate on record.

So targeted interventions around making it easier for employees to care for their families to take parental leave and continue to grow their careers is absolutely critical. And I'm yet to see an organisation that doesn't need to invest in that part of it. Many organisations have the policies, but they need to evaluate how well and effective those policies are actually being used in order to achieve their longer-term goals around gender equality.

I think the second area that I'd recommend organisations focus on is leadership around respect at work. Leaders have, and when I say leaders, it's about identifying the right level of leadership. It doesn't necessarily need to be your exec, they're not necessarily the change agents on this.

What we tend to find is when organisations invest in that level of leadership who have responsibility for the majority of hiring, promotion decisions, they're still on the tools and have control over a whole lot of the different systems.

When you invest in that cohort, they are also really hungry to be good leaders because they are the future, our future leaders. And they have influence over executives, you know, upwards because they are the future leaders. But they also influence huge numbers of employees as well.

Investing in their leadership capability to better understand how they can drive gender equality and ensuring that they understand the risks from an organisational reputation perspective and exposure to sexual harassment, to sex discrimination and the business benefits is actually the best way organisations can respond to the respect at work, positive duty and drive measurable change.

They also need to be making sure that they've upskilled their people and culture business partners because they're the ones in the day-to-day hearing the different stories, influencing that level of leadership as well.

And when, in our experience, we work with that cohort, you see gender experience gaps close. You see an increase in promotions of women because they are actually using the systemic controls that are possibly already in place, but there's been poor accountability for managing them.

There's a reduction in the prevalence of sexual harassment, of sex discrimination. And it's all correlated. So, yeah, again, for that cohort too, what gets measured gets managed. And when they're equipped to actually manage their workforces well and with a good understanding of the why, we say significant progress.

Christine Gounder:
Thank you so much, Prue, for finding time today to come and join us and all the valuable insights today. Thank you so much.

Prue Gilbert:
It's a pleasure. Thanks for having me.

Christine Gounder:
And thanks for the great work you're doing. Don't forget to check out the show notes for links to resources, research reports and more information on how you can get involved in the conversation and take action within your own organisation or community.

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Garreth Hanley:
If you've enjoyed this episode, help others discover INTHEBLACK by leaving us a review and sharing this episode with colleagues, clients, or anyone else interested in leadership, strategy, and business. To find out more about our other podcasts, check out the show notes for this episode. And we hope you can join us again next time for another episode of INTHEBLACK.