Gender pay gap: The commitment crossroads

Today, we stand at a crossroads where transparency and intention meet.  Publishing the gender pay gap has been championed as a progressive stride toward workplace equality. Yet, we must confront a critical question: Is this merely form over substance?

To be clear, transparency is an essential step. Knowing the scope of the problem is, after all, the first step in addressing any issue. However, publishing data without actionable commitments is analogous to diagnosing a patient without prescribing treatment. Transparency, while necessary, is not a panacea. It is but the starting point.

The heart of the matter lies within the systemic drivers of inequality—factors deeply rooted in our workplaces and societal norms. Historical underrepresentation of women in leadership roles, occupational delineation, and implicit biases have long been the bedrock upon which the gender pay gap has been built. These issues are complex, integrated into the very fabric of our institutions, and resistant to change simply by shining a public light upon them.

Addressing these underlying factors must be our priority. Companies need to commit not just to equity in pay but to equity in opportunity. This means ensuring that women have equal chances for growth and advancement. It means offering support for women to enter and thrive in high-paying fields historically dominated by men. It means scrutinising our hiring, promotion, and reward practices for hidden biases.

Additionally, we must challenge cultural norms that contribute to the pay gap, such as the expectation that women will bear the brunt of caregiving responsibilities. Policies like flexible working arrangements, paid parental leave, and childcare support reframe expectations and can help recalibrate the work-life balance that often penalises women financially.

Paid parental leave is designed to be a universal benefit. It’s available to every employee, ensuring that those who need it can take it without worrying about financial pressure. That only a small percentage takes advantage of it at any one time does not undermine its value as a safety net for all. Over the years, a much larger percentage of our workforces will benefit as people go through different life stages; the cumulative benefits over time in terms of normalising shared parent responsibility, reduced staff turnover costs, healthier work-life balance, etc. can be substantial.

Our 26-week paid parental leave policy at KPMG supports both parents to take leave to care for their new child and has been developed to increase women’s participation in the workplace. Already, we’ve seen an increase in men taking paid parental leave to care for their families, which in turn enables women to return to work and their careers. The federal government’s proposed legislation to extend parental leave benefits by an extra two weeks from 1 July 2024 represents a positive move forward.  

The publication of the gender pay gap today should be coupled with a clear, strategic plan detailing how businesses intend to close these gaps. Targets should be set, progress should be regularly reviewed, and there must be consequences for failing to take meaningful action. Accountability is critical.

And accountability starts at the top. Leaders can serve as role models for gender parity. Achieving an equitable gender distribution within management and on the board, as in KPMG’s 50:50 ratio, sends a powerful message that can lead to cultural shifts within and beyond the organisation. At KPMG, our gender pay gap of 12.9% and year on year improvements from 17.1% and 15.2% in prior years is showing positive progress. However, there is more work to do and, while we have more to do to correct the legacy of gendered imbalance in leadership succession, the consistent narrowing of our gender pay gap is testament to how diverse perspectives can lead to accelerated equity outcomes.

There is an urgent need for speed. The World Economic Forum’s 2023 Global Gender Gap report estimates it will take 169 years to close the economic gender gap. Even closer to home, the Australian government assessed last year it would take 26 years for Australia to do so, on current projections. And economic modelling in KPMG’s own 2018 report ‘Ending workforce discrimination against women’ found that just halving the workforce participation rates would raise Australian GDP by $60bn over 20 years. The benefits of taking action to close gender gaps are clear.

Transparent pay data should drive us to introspection, to institutional reform, and, ultimately, hopefully to transformation. This is how we will shift from form to substance and build a truly equitable workplace for all.

In conclusion, while publishing the gender pay gap is a step forward, we must not be inveigled into a false sense of achievement. Our aim should not stop at disclosure but should catalyse a rigorous overhaul of the systemic drivers perpetuating this inequality.