Defined as the difference in the median hourly income between men and women, the gender pay gap (GPG) has gone up and down over the last two decades. The GPG has decreased from 16% to 9.4% since 1998, however statistics have shown that the gap widens significantly once you hit the higher-earning wages, and the gap in bonuses paid has been revealed to be even more shocking.
According to Margaret Retter, director of policy for the Ministry of Women NZ, the drop has been happening far too slowly, and the picture within the insurance industry needs urgent attention.
“The good news is that insurance workers are well paid,” said Retter, addressing Insurance Business’s 2018 Women in Insurance Summit in Auckland.
“However in 2017, Stats NZ’s household labour survey showed that New Zealand’s finance and insurance services have a pay gap of 27%. For every $10 a woman earns she doesn’t get $2.70, and that adds up significantly.”
“Statistics from other countries show a similar overall trend in the insurance industry,” Retter continued. “Insurance has a much higher than average GPG because it pays more and is less regulated. In Australia, the Workplace and Gender Equality Authority found a 25.7% gap based on 40% of the workforce, and in the UK, the insurance sector has a gap of 24%.”
Higher income roles tend to have more discretion around pay, and, according to Retter, these pay gaps are almost entirely down to ‘unexplained factors’ - that is, they could not be explained by career breaks, lower numbers of women in senior positions, or lack of willingness to negotiate pay.
“Even where women have made it to senior positions, their wage gap still increases to 55%,” said Retter. “A recent study in Australia showed that women were just as likely as men to request pay increases, but, unfortunately, men were 25% more likely to actually receive them. There’s a reason that the gap is ‘unexplained,’ and we think it comes down to either conscious or unconscious bias.”
New Zealand currently has one of the lowest gender pay gaps in the OECD. However, the UK’s recent adoption of the ‘name and shame’ method has been suggested as a catalyst for further improvement. No woman would willingly choose to work for a company with a 70% bonus gap, or worse still, a 90% bonus gap – two existing statistics that have recently been reported in the UK.
Looking to the future, Retter says change needs to happen from individuals who are willing to champion it.
“We need people who are willing to challenge the status quo and model the behaviours that they want to see in the workplace – that is the single most important factor,” she stated. “All businesses should do a gender pay audit rather than simply assuming that they’re a fair company. You can redesign your talent management system to maximise use of female talent, look at salary progressions across men and women and compare salaries for full-time and part-time staff. You can also learn a lot from things like engagement surveys, where people tend to be very frank about what they think.
“Unfortunately, once the bias starts on a lower level, it can persist and impact on promotion and affect the setting of salaries and bonuses. You need to make sure that your company and culture is not getting in the way of career advancement.”
