The average male executive in Australia earns $1,385,457 over 10 years.
For their female counterparts, it’s $923,638.
They do the same job, have the same level of education and experience, and have the same responsibilities.
So why are men being paid almost half a million dollars more?
Good question, and one we can reflect on today, Equal Pay Day 2021.
According to research out of the University of South Australia, 80 per cent of Australian firms pay male executives 30 to 35 per cent more than their female ones.
Distressingly, the IT sector is one of the worst for paying men and women equally, only behind the energy sector which values its men way more than its women.
But there are women now at the top of very large corporations, I hear you say.
“Just because an organisation has a good representation of women at the top doesn’t mean that they are a gender equal firm. Women’s representation is only one indicator,” say University of South Australia researchers Dr Yoshio Yanadori and Dr Jill Gould.
“Gender diversity must be matched with equal pay.
“If organisations have women in senior leadership roles but pay them less than their male counterparts, they’re simply shooting themselves in the foot.”
Diversity is a hot topic for Australian businesses.
The study of 539 ASX-listed firms across 10 years of data found that by not paying men and women the same pay for the same job, large gender pay gaps were associated with lower firm performance.
“It might surprise people that gender pay gaps exist at very senior levels, but with senior performance criteria often vague and subjective – and gender stereotypes still rife – the resulting imbalance is commonplace,” UniSA researcher Professor Carol Kulik said.
“We hear a lot about the benefits of women in executive levels. They provide different views and perspectives, reduce risks, improve decision-making, and promote performance, but if a firm has a large gender pay gap, promoting women to the top team will neither deliver benefits for the individual nor the organisation.
“Our research shows that gender pay disparities in top management teams negatively moderate the relationship between the women’s representation and subsequent firm performance.
“In dollar figures, if a male executive is paid 2.6 times that of their female counterpart, every woman added to the team will lower the firm’s annual return on assets by 2.2 per cent.
“The cause, we suspect, is that underpaying women sends a powerful signal that the organisation has low expectations about women’s contributions – that women executives have a lower status and less influence than their male counterparts.
“Women executives are then less forthright with their views; and men are more likely to discount their female colleagues’ opinions.
“Ultimately, a gender pay gap reduces the extent to which women’s voices can influence the executive’s actions and decisions, so the firm gets no value from the diversity within the team.”
So, because women get paid less, their opinions are discounted, too.
In 2016, Professor Andrew McAfee from MIT spoke at ACS Reimagination about HIPPOs.
“In most organisations, a lot of the decisions are made by HIPPOs – have we heard this term?
“It stands for Highest Paid Person’s Opinion. And it is honestly how most business decisions get made.”
So, if women aren’t being paid the big bucks, the decisions are getting made by those who are.
My message to the IT sector: do better.
The success of your business depends on it. And the success of our society does, too.