Victorian Equal Opportunity and Human Rights Commission | 2 March 2022
It’s no secret that many businesses are facing skills shortages and attracting new and diverse talent can be difficult. Naturally business owners are looking for ways to improve their recruitment and retention practices.
A good place to start might be to review your business’s pay equality practices.
It’s a good idea to review your practices because all Victorian workplaces have a responsibility to ensure they are safe, fair, and do not discriminate. Yet, some workers are still not paid equally for their work.
The problem of unequal pay for women is firmly established and even more of a concern when compounded with being:
Industrial Relations Victoria, supported by the Equal Workplaces Advisory Council, engaged the Victorian Equal Opportunity and Human Rights Commission to conduct research on gender pay (in)equality in small to medium enterprises (SMEs).
The report found that if properly supported, SMEs can play an integral role in reducing the gender pay gap and achieving gender pay equality in Victoria. To get started, here are four ways to help your business achieve equal pay.
SMEs make up a significant proportion of the Victorian workforce and economy. With approximately two in three employed Victorians working in an SME, they have the power to effect enormous change when it comes to achieving equal pay in our state.
The Equal Pay Matters report found that often SMEs have a limited understanding of equal pay and their legal obligations to ensure they prevent pay inequality in their organisation. Understanding both is key to establishing gender pay equality.
Equal pay or gender pay equality refer to work of equal or comparable value. This is when work of comparable skill, effort, responsibility and working conditions is valued equally. Unequal pay is driven by sex discrimination, the historical and systemic undervaluing of work traditionally associated with women, and the widespread segregation of women into low paid industries and jobs.
This means that women are not being recognised and remunerated equally which can have significant consequences for their lifetime economic security. Men can also be affected by this when denied access to flexible work.
Pay inequality can have a profoundly negative impact on individuals, businesses and society. Businesses who do not pay their workers fairly and equally may struggle, among other factors, to attract and retain staff, be vulnerable to legal claims, and risk reputation damage.
This video explains more about what equal pay means for you and your business.
There are many benefits to achieving pay equality for your business, including:
This video demonstrates some of the benefits of equal pay to your business.
Everyone has the right to be paid fairly and equally for work of equal or comparable value. In the last two decades, the legal obligations to ensure equal pay have been enshrined in four key Acts:
To achieve equal pay, SMEs must take proactive steps to address policy, decision-making and practice. The report highlights that most SMEs do not have policies and practices on determining pay, have limited understanding and experience with gender pay reviews, and rarely review job descriptions outside the context of recruitment needs.
A good place to start when considering workplace practices and polices is to consider what your organisation’s values are. Where possible, workshop these with your employees and state them on your website, in documentation and policies.
Having clearly defined organisational values will help:
This video explains more about how your business can put values and processes in place to ensure equal pay.
Your professional networks can provide excellent support, and SMEs can learn how to address pay equality concerns from each other. Sharing your learnings with other SMEs can also resolve the external drivers of pay inequality including limitations in industry standards and bench marking frameworks.
It is also important to encourage your employees to connect with their professional networks, a key element of professional development. Employees can be encouraged to share their learnings with the organisation, which is another great way to build knowledge as well as team dynamics.
The report revealed that lack of professional development frameworks is a driver of pay inequality within SMEs. The report also found:
It is critical that employees have access to professional development opportunities to develop the capabilities to advance, whether within or beyond their current organisation.