We could close gender pay gaps by closing gender leadership gaps. So why aren’t more organisations doing it? UniSA Professor Carol Kulik summarises the research showing how organisations are missing the mark. “The bottom line is that a gender pay gap isn’t just a problem for women; it’s a problem for their employers. The research evidence gives organisations a very practical reason to take pay gaps seriously.”
The issue
The OECD estimates that, across countries, the wage gap between the median earnings of full-time working women and men stands at 13%. That’s consistent with the gap we see in Australia, where women earn only 87 cents for every dollar earned by men. Gender pay gaps start early and widen as women’s careers progress, so that women retire with dramatically less financial security. Gender pay gaps are a problem for women – but our research program demonstrates that they are a problem for employers too.
About the project
Our research program has been investigating gender pay gaps among female and male executives in Australia’s ASX-listed firms. Australian firms have been experiencing stakeholder pressure to increase the gender diversity of their boards and executive teams, and we’ve seen a rapid rise in female executives. Unfortunately, our research has documented a 20% gender pay gap (in both base pay and incentives) at the most senior levels of organisations. And when there’s a gender pay gap within a firm’s executive team, there’s an impact on firm financial performance. Specifically, in the presence of a gender pay gap, adding women to the executive team lowers the firm’s return on assets. Pay is a very important signal, so firms sabotage their own diversity efforts when they appoint women to senior leadership roles but pay them less than men.
The Team
Carol T Kulik, Bradley Distinguished Professor, UniSA Business
Jill Gould, Adjunct Senior Research Fellow, UniSA Business
Yoshio Yanadori, Professor, Waseda University
Impact
Our research program on the gender pay gap has been featured on Channel 7 News and in HR Monthly, Yahoo!Finance, Women’s Agenda, the Canberra Times, PublicAccountant, The Mandarin and other outlets.
Media appearances on Channel 7: https://www.youtube.com/watch?v=eYnhhVBT29I
Our 2021 Human Resource Management article received the 2021 Philip Brown Prize from the Securities Industry Research Centre of Asia-Pacific (SIRCA) and was described in the SA Chief Scientist’s “Best of the Best” series as a CEO must-read.
Professor Kulik is currently serving on South Australia’s Gender Pay Gap Taskforce, a group that provides independent advice to the Minister for Women and the Prevention of Domestic and Family Violence on strategies to address SA’s gender pay gap.
CWeX is partnering with Financy to develop the Impacter, a tech solution that helps organisations to measure and manage performance on diversity, equity and inclusion.
Publications
Kulik, C. T. (2022). Gender (in)equality in Australia: Good intentions and unintended consequences. Asia Pacific Journal of Human Resources, 60, 97-115.
Yanadori, Y., Kulik, C. T., & Gould, J. A. (2021). Who pays the penalty? Implications of gender pay disparities within TMTs for firm performance. Human Resource Management, 60, 681-699.
Yanadori, Y., Gould, J. A., & Kulik, C. T. (2018). A fair go? The gender pay gap among corporate executives in Australian firms. International Journal of Human Resource Management, 29, 1636-1660.
