Research released before International Women’s Day shows senior female managers earn, on average, $93,000 less than their male equivalents

This article is more than 3 years old

This article is more than 3 years old

One week out from International Women’s Day and it looks like no one is going to be startled by any good news about the progress of women at work in Australia.

Three organisations have released new research showing that top-tier female managers earn, on average, $93,000 less per year than their male equivalents, they are twice as likely to be told they need more “confidence” to be a leader (yet are more frequently criticised for being assertive) and, finally, that women who are culturally diverse – that is, not Anglo-Celtic– have it worst of all.

Top-tier female managers earn, on average, 26.5% less than their male counterparts, according to a report by the Bankwest Curtin Economics Centre, in collaboration with the Workplace Gender Equality Agency. Nearly $40,000 of that difference comes from additional remuneration, including bonuses.

Unsurprisingly, it appears that the organisations that have managed to do the best job of narrowing the pay gap also have a gender-balanced leadership, according to the Gender Equity Insights 2017: Inside Australia’s Gender Pay Gap report, which looked at more than 12,000 private sector organisations (of more than 100 employees each).

The pay gap at those companies (on average 10%) is half the size of those found in organisations where women were hardest to find in leadership roles.

Tellingly, gender pay gaps in favour of men are also seen to rise sharply in organisations where the management ranks are heavily female-dominated (more than 80% women).

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This reflects the fact that these are traditionally “female” industries where men have tended to be at the uppermost levels: healthcare and social assistance, the retail sector and education and training.

Associate prof Rebecca Cassells, author of the report and BCEC principal research fellow, says the findings are an indicator of the different ways women and men engage with the workforce and how their respective contributions are valued.

“Not only do female-dominated organisations tend to be lower paid but this analysis shows that, in workplaces with heavily female-dominated management teams, there are large gender pay gaps in favour of men,” she says. “It seems that where the men are few, they are more highly valued.”

The inequality in pay begins right at the first job, with young graduate women earning 2.9% less on base salary and 2.1% less on total remuneration. The gap rises with seniority.

And, while women are being paid less than their male counterparts, they are also getting conflicting messages about what it takes to get ahead.

Research by Chief Executive Women and Bain & Company finds a stark difference between the feedback received by men and women.

“We found that women are twice as likely as men to receive feedback indicating they need to show ‘more confidence’ to be ready for promotion,” say the authors of the Advancing Women in Australia: Eliminating Bias in Feedback and Promotions report. “Women in this situation also face a double bind in which they are often criticised for coming across as too assertive, as this goes against ingrained feminine stereotypical behaviours.

“Executive female respondents had been told to ‘toughen up’, ‘be more likeable at the expense of efficiency’ and ‘temper [their] enthusiasm’.”

When it came to promotion to executive roles, nearly twice as many women as men were told they needed to change their style.

Women reported being surprised at this turn of events and the report authors surmised that, when women’s careers are approaching executive level, they start being seen as a “riskier” appointment because they appear different to the incumbent men.

Women also frequently received feedback that they needed “more experience” to be ready for promotion.

“In fact, in our survey, this was the most common feedback women received,” say the authors. “Decision-makers still need to see women perform at their current level for longer than their male counterparts and perform with more ‘apparent’ confidence before feeling comfortable appointing them.”

The feedback offered to the women and men was reported to be lacking in clarity but more so for women.

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“So, the bottom line is that women are being told to display ‘more confidence’ and to get ‘more experience’ but they are receiving less clear and actionable feedback than their male peers – likely a significant factor in the growing disparity in the promotion of men vs. women in senior ranks.”

Women account for 34% of senior managers and 16% of chief executives in the private sector. These figures get worse in large publicly listed companies, where only 5% of ASX 200 CEOs are women.

The Diversity Council Australia and Deakin University, with the support of CPA Australia, has looked at the representation of culturally-diverse women in the leadership roles of all Australian listed companies between 2004 and 2015.

While they found some improvement, it was from a very low base.

All women’s representation in ASX leadership is at an all-time high (8.2% of directors, 4.9% of senior executives and 4.2%of chief executives). Over that 11 years, the proportion of culturally diverse female leaders has doubled to 1.9% of senior executives, 2.5% of directors and one percent of CEOs.

The percentage of female ASX leaders who are culturally diverse appears to have plateaued between 2013 and 2015 in all roles.

The chief executive of the Diversity Council Australia, Lisa Annese, says the results show how much work there is still to do.

“It would appear that culturally diverse women are experiencing a ‘double jeopardy’ in ASX leadership – where their gender and culture combine to make it more difficult than non-culturally diverse women, or even culturally diverse men, to access leadership roles,” she says.

“We are undoubtedly not making the most of the talent that we know is out there in the community. We really need to look hard at what biases, either conscious or unconscious, are preventing these women from progressing to the top.”