geneq - opportunity or obstacle

GenEqOpportunity or Obstacle?

ABN 83 138 466 841Melbourne | Perth

Perth 08 6102 2940 | Melbourne 03 8669 0751 | [email protected] | www.strategistgroup.com.au

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IntroductionGenEq – it’s not the next demographic cohort trailing in the wake of GenY! Rather it refers to the new legislative regime for workplace gender equality, known as the Workplace Gender Equality Act 2012.

The Equal Opportunity for Women in the Workplace Amendment Bill1 successfully passed through Parliament on 22 November 2012. The legislation encompasses key measures of gender equality, including: the number and proportion of females employed in the workforce and in specific industries; the extent to which men’s and women’s pays are equitable; the proportion of females at various levels of seniority in organisations; and the availability of flexible work arrangements for parenting and caring roles.

The Context

The global context for the legislation is worth noting. First, the rates of female participation in the Australian workplace compare favourably to those in other nations. Consider: India (35%), Italy (46%), UK (69%), Australia (70%), China (74%), and Norway (76%)2. Of interest, however, and perhaps of particular interest to those framing the Gender Equality Bill, are the attitudes expressed at the company level. The 2012 study Women Matter: An Asian Perspective, published by McKinsey and Co, found that few companies had gender diversity as a ‘top ten’ strategic objective – 30 per cent in Asia, 45 per cent in Australia and 53 per cent in Europe, on average.

Given figures such as these, it is understandable that the major objective of this Australian legislation is to “progress substantive gender equality”3 – i.e. to ensure more is done at a faster rate than if it were left to the market.

Gaps in men’s and women’s pay rates in Australia also lend weight to such a legislative aim. Although the figure is contested, the differences in the male–female pay levels are significant – around 17 per cent is the figure most often cited. Furthermore, these gaps range widely across different industries, for example nine per cent in education and training to 32 per cent in financial and insurance services. The chart below shows the pay differences in six out of the 14 industries.4

Figure 1 : Gender Pay Differences

$2,500

$2,000

$1,500

$500

$0

Financial &InsuranceServices

ProfessionalScientific

& TechnicalServices

Mining Info Media & Telecoms

Construction Education & Training

$1,000

Men

Women


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The Legislation

AimsIn broad terms, the four main aims of the legislation are:

• Increased visibility: to make companies’ actions in the area of gender equality more visible.• Greater improvement: to impose disciplines on companies so that greater gender equality is achieved in

various areas.• Better measurement: to address the limited measurement of male–female pay gaps in various domains:

in individual organisations at different levels of seniority, within particular industries and across different industries.

• More uniform standards: to establish industry-specific standards of gender equality, which will be set by the Minister by 1 April 2014

Affected EmployersThe Bill applies to the following employers:

• private sector companies• community organisations• non-government schools• higher education institutions

In most instances, to be required to report, these employers must have 100 or more employees.

RequirementsUntil now, employers have been required to have programs in place to reduce levels of discrimination and to report on the outcomes of these programs. Neither of these will be required any longer.The amended bill will require employers to submit an annual report to the Workplace Gender Equality Agency (‘the Agency’). This report will indicate the:

• gender composition of their workforce, i.e. the number and proportion of males and females. This includes the composition of governing bodies, such as boards of directors and management committees.

• equality of remuneration between men and women• availability and usefulness of flexible working arrangements for male and female employees with family and

caring responsibilities• consultation they have had with employees about gender equity issues• anything else specified by the Minister, which is yet to be determined

Employers must inform their employees, shareholders and unions that they have lodged their ‘GenEq report’, and they must make this report accessible to each of these three interest groups. For this, a hard copy or website link should suffice. Some employer and staff details will be protected; for example, employees’ remuneration or information deemed ‘personal’ by their employer cannot be published by the Agency without the employer’s consent.

1 Known in its current form as the Equal Opportunity for Women in the Workplace Amendment Bill.2 Taken from Women Matter 2012: Making the Breakthrough, McKinsey & Company, p. 20, and Woman Matter: An Asian Perspective,

McKinsey & Company, 2012 p. 3. http://www.mckinsey.com/client_service/organization/latest_thinking/women_matter. Both accessed 10 September 2012. Note: these reports use the term ‘gender diversity’, which in this report is taken to be equivalent with ‘gender equality’.

3 Report of Education, Employment and Workplace Relations Legislation Committee’s inquiry, completed 10 May 2012, (sec. § 2.68, p. 25).4 Industries and pay levels are from ABS Catalogue 6302.0, for Nov. 2011, taken from Senate Committee Report, p. 11.


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Phase In

The legislation will be gradually implemented between 1 April 2012 and 31 March 2015. This means the period for which employers must report has already begun. The chart below outlines what employers must do at different stages throughout the phase-in period.

Actions that do not comply

• Failing to notify employees, shareholders or unions.• Insufficiently substantiating claims made in a report (at the Agency’s request).• Failing to improve against the minimum standards of gender equality for two consecutive years.• Providing false, inaccurate or misleading information.

To elaborate the this point: to those employers that don’t meet the minimum standards, which will come into force from 1 April 2014 to 31 March 2015, the Agency will offer assistance. This is to help the employer meet the minimum standards in the following year. Should the employer not improve its GenEq performance in this year, they will be in breach of the Act.

Consequences of not complying

• First, non-complying employers can be named in reports given to the Minister; then, can also be named publicly, on the Agency’s website or in a newspaper, i.e. a ‘name and shame’ approach.

• Second, employers who don’t comply may be ineligible to compete for contracts under the relevant Commonwealth Act or to receive Commonwealth grants or financial help.

Figure 2: Timetable for ‘Phase In’ of legislation

Figure 3: Non-compliance and its consequences

• Report on gender equality indicators: Male-female composition, pay-levels: �exibility of employment arrangements, etc. (see page 2 of this report)

• Inform 3 ‘interest groups’

• Report on indicators

• Comply with minimum standards

• Submit workplace profile: current profile indicates: Number and per cent of males and females at board, senior executive, management, administration, sales and service levels. This is full and part time and casual sta�. Average pay level for each group is provided.PHASE 1

1 April 2012-

31 March 2013

PHASE 2

1 April 2013-

31 March 2014

PHASE 3

1 April 2014-

31 March 2015

Risks and Opportunities for Businesses

a) Risksi. If businesses fail to keep abreast of what the legislation requires of them, their administration systems may be

found wanting, and they may fail to meet their reporting requirements.ii. As organisations employ more females in response to the legislation, the pool of female talent will contract.

Businesses that respond slowly to the GenEq regime may not have the recruitment processes required to obtain female professionals from a shrinking labour pool. Further, such businesses may lack the processes and culture required to retain talented female staff.

iii. More generally, businesses that undervalue gender diversity will miss out on the increases in innovation and performance that female employees bring. As for performance, a study of approximately 200 Fortune 500 firms from 2004–2007 found that firms that promoted the highest number of women to executive positions outperformed the ‘median promoting’ firms by 30.7 per cent for profit/revenue and 55.5 per cent for profit/equity.5

iv. A diminished corporate reputation for businesses that are lagging in this area, including the bleak possibility of being an employer of ‘last choice’.

b) Opportunities for Businessesi. Analyse and improve their recruitment strategies, in particular to develop new and innovative approaches.

The Strategist Group|RPO develops innovative strategies to source female candidates through targeted, proactive sourcing techniques. We also work with clients to ensure their Employer Value Proposition (EVP) is attractive to women, highlighting female friendly aspects such as flexibility, equality and benefits.

ii. The counterpoint to the missed opportunities of increased performance (see ‘Risks’ iii.) is businesses capturing the untapped skill sets that female staff bring and benefitting from these – especially at higher levels within their organisation. For example, in its sample of over 200 international firms, the Women Matter: an Asian Perspective Report found that companies with a higher proportion of women on executive committees, i.e. in the top quartile, outperformed companies with no representation on executive committees as follows: Return on Equity (+47%) and Earnings Before Income Tax (+56%).6

iii. Create leadership development and mentoring programs for female staff. Related to this, female staff can be encouraged to participate in external professional development that is specific to women. The ASX 200 Chairmen’s Mentoring Program, sponsored by the Australia Institute of Company Directors, is one such example. In 2010–11, this program placed 63 female professionals in mentoring relationships with chairmen and senior directors of major companies.7

iv. Improve levels of understanding about gender diversity and unconscious biases in this area – particularly among executives and upper-management, the main agents of organisational change. This could include assessing career and succession plans for female staff, or putting them in place (if they aren’t already). It could also include gaining more insight into how female staff changing roles can affect the performance of various sections within an organisation.

One tool The Strategist Group|RPO employs to monitor areas such as these is the Social Network Analysis, which enables networking within organisations to be analysed and fostered when and where it is required. Using such a tool can help overcome the ‘networking gap’ that can hinder women’s career advancement.8

5 Roy Douglas Adler, ‘Profit, Thy Name is ... Woman?’ http://s3.amazonaws.com/mmc-beta-production/assets/11195/MMResearch_Essay.pdf accessed 25 September 2012. Calculations of annual averages were made by this article’s author. Note: Adler cautions against taking correla-tion between performance and levels of women’s employment to indicate causation. Rather, in explaining this correlation, he suggests “Firms exhibit higher profitability when their top executives make smart decisions. One of the smart decisions those executives have consistently made ... is to include women in the executive suite – so that regardless of gender, the best brains are available to continue making smart, profitable decisions.’ p. 35. Accessed 24 September 2012.

6 Woman Matter: An Asian Perspective, McKinsey & Company, 2012 p. 4. See also ‘Our experiences in elevating the representation of women in leadership: A letter from business leaders’, at http://www.humanrights.gov.au/sex_discrimination/publication/mcc/index.html. Accessed 24 Septem-ber 2012.

7 See http://www.companydirectors.com.au/General/Header/Media/Media-Releases/2010/Directors-take-the-lead-in-helping-put-women-on-boards. Accessed 25 September 2012.

8 See, for example, ‘Still lonely at the top’ in The Economist, 21 July 2011; http://www.economist.com/node/18988694/print. Accessed 25 September 2012.

Perth 08 6102 2940 | Melbourne 03 8669 0751 | [email protected] | www.strategistgroup.com.auPerth 08 6102 2940 | Melbourne 03 8669 0751 | [email protected] | www.strategistgroup.com.au

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9 The EOWA Industry Snapshots: Mining, p. 3; Industry Snapshots: Electricity, Gas, Water and Waste Services, p. 3; 2011; http://www.eowa.gov.au/ Information_Centres/Resource_Centre/EOWA_Publications/Industry_Verticals/2011/2011_Industry_Verticals.asp. Accessed 21 September 2012.

10 See p. 1: ABS Catalogue 6302.0 for Nov. 2011.

vi. Become industry leaders: especially in industries in which women are under-represented – e.g. mining and utilities, 16.2% and 21.5% of total employees respectively – or in which pay gaps are significant – e.g. mining (21% gap) and financial services (32% gap). Businesses that act sooner rather than later will likely comply with the minimum standards set by the Agency.

vii. Create indicators for areas such as work satisfaction levels by gender, female representation at various levels of seniority, impartiality of performance appraisals, and promotion and attrition rates by gender. If these indicators are in place, they may need to be revised and refined.

viii. Improve workplace flexibility for all staff, male and female. Recent research suggests significant numbers of staff value work satisfaction more than pay levels. One contributor to this satisfaction is suitably flexible work practices. Further, that employers retain more staff when these staff are satisfied is widely recognised. The relationship is clear: flexibility leads to satisfied staff, and satisfied staff are more likely to remain with their employers longer.

The Strategist Group|RPO consultants can help organisations identify and implement the flexible work practices that best suit their situation.

Where to from here?

Clearly, as well as new information gathering and reporting requirements, businesses will have a range of strategic risks and opportunities to evaluate and act upon. The Strategist Group|RPO considers that businesses will be best served by assessing these risks and opportunities as part of their broader strategic planning – rather than implementing various measures in an ad hoc manner. Further The Strategist Group|RPO offers a framework that addresses GenEq risks and opportunities embedding female participation and leadership development as a competitive advantage in business. This competitive advantage is well evidenced by numerous global studies.

Figure 4 illustrates one such model. It outlines how The Strategist Group|RPO approach female participation and development through a career life cycle. Contact our team of experts that will support your business to seize its GenEq opportunities to build competitiveness through recruitment and retention of a diverse workforce.

Figure 4 : Female Participation and Leadership Development Model

Career Stage

Skills Development

Development Pillars

ENTRY RE-ENTRY DEVELOP

NETWORKING MENTORINGPROGRAM

INDIVIDUALCAREER PLANS

LEADERSHIPRESILIENCE

CONFIDENCE BUILDING/ASSERTIVE SKILLS

FLEXIBILITY


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Capability: Lead Strategist – Perth Bree Mitchelson – Director

• Bachelor of Commerce—Psychology & Human Resource Management, University of Western Australia• Graduate Certificate in Change Management, Australian Graduate School of Management (in progress)• Certificate IV in Training & Assessment (TAE40110), Training Services Australia Bree Mitchelson specialises in Organisational Development, Training and Human Capital strategy with experience leading implementation of change projects, resourcing strategy to address challenging market conditions and capability development framework. With a strong commercial focus, Bree ensures strategy and consulting delivery is aligned to business objectives and addresses risk.

Diverse consulting experience has enabled Bree the capability to support across a range of challenges and opportunities that human and social capital present to organisations. In addition, having worked from Perth, Sydney and London in industries such as mining, oil and gas, engineering, IT, professional services and finance, Bree has been exposed to world’s best practices.

Global best practices, along with the needs of changing markets, have shaped The Strategist Group|RPO’s services and how these are delivered.

Bree is also Director of Strategist Learning & Development Pty Ltd, a Registered Training Organisation (RTO) which offers training design and consultancy, nationally accredited training and short course development programs.


Perth 08 6102 2940Melbourne 03 8669 [email protected]

geneq - opportunity or obstacle

Documents

greater gender equality

area of gender equality

gender equality bill

gender pay differences

workplace gender equality

gender diversity

substantive gender equality3

different industries