Understanding the Gender Pay Gap: Why it Exists, How it Persists, and How Companies Can Start Addressing It
Summary
The gender pay gap is a widely discussed but often misunderstood issue in the workplace. At first glance, it may seem like a simple matter of unequal wages between men and women. However, its roots extend far deeper – including workforce participation patterns, organisational practices, decision-making processes and broader structural influences. These dynamics not only impact women, but other minority groups such as LGBTQIA+ individuals, people with disabilities and culturally or linguistically diverse staff (CALD). Importantly, many of these drivers sit within the sphere of organisational influence.
By understanding and addressing the gender pay gap, businesses can strengthen performance, enhance talent attraction and retention and build more inclusive and equitable workplaces – making this about much more than achieving a zero gap on paper.
This guide aims to demystify the gender pay gap and explain why it continues to affect diverse groups of employees, despite progress in policy, legislation and awareness. It also introduces the GEARS Gender Pay Gap Tool, a simple resource designed to help companies measure, understand and address the gender pay gap in their own organisations.
Highlights
- Gender pay gap is calculated in two ways: unadjusted pay gap, which measures the overall inequality in earnings, and adjusted pay gap which measures pay difference for comparable roles. Both metrics are essential.
- Gender pay gap is a result of overlapping legal, economic and socio-cultural factors that shape the workplace experience. These include occupational segregation, career interruptions due to caregiving responsibilities, discrimination and bias, lack of transparency, and negotiation gaps.
- Intersectionality matters. The pay gap often widens when race, ethnicity, disability, sexuality, and/or cultural and linguistic background is considered, revealing compounded disadvantages.
- Addressing the gender pay gap is a strategic imperative. It improves retention and engagement, lowers legal and reputational risks, and unlocks diverse leadership benefits and economic growth.
- The GEARS Gender Pay Gap (GPG) Tool is a simple, yet powerful Excel-based resource designed to help organisations measure, understand, and address differences in pay between different groups.
