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Improvements to diversity and inclusion in the workplace are essential for the financial wellbeing of women. Lisa Annese, CEO of Diversity Council Australia, talks to Miriam DeLacy about how policies, workplaces and leaders can make a positive difference to all Australians.
In 2021, events have shone a light on threats women continue to face – in the workplace, at home and in their wider community. As well as the dangers of family violence and workplace harassment, other systemic problems for women include an increased risk of poverty and homelessness as they grow older. With lack of financial security likely to impact living arrangements, social support and health, it can compromise their safety and wellbeing well into their retirement years.
As Chief Executive Officer for Diversity Council Australia (DCA), Lisa Annese knows well how prevalent and complex the challenges are that prevent women from securing enough income to thrive. With a membership of more than 800 organisations of all sizes, across industries and the public, private and not-for-profit sectors, the scope of DCA activities and the support they offer, are designed to address many of the problems that can lead to working women having to make-do with less salary and super savings compared with men.
“We work across the whole labour market,” says Lisa. “Our 800 members include ASX-listed companies, public and private sector and NGOs and we work with all of them on different priorities. Of course it’s not just about gender diversity but given the national conversation we’re now having about workplace harassment, it’s clear we have a long way to go in this area.”
Supporting genuine progress
As a mixed bag of organisations, DCA members each have different priorities for advancing gender diversity. While these goals may vary, they broadly support several key agendas that are essential for all workplaces, regardless of their size or the industry where they operate. “In traditionally male-dominated industries such as construction, there may be a greater focus on getting women into leadership or creating more flexibility to attract women into roles,” says Lisa. “But the ultimate outcome for all our members is to create more respectful workplaces. And the research shows that inclusion is what it takes to make everyone feel safer at work; both men and women.”
“Recruitment and talent management are part of that but diversity and inclusion (D&I) is a culture change initiative,” Lisa adds. “Like many other culture change projects, around 80 per cent of D&I initiatives have very limited effectiveness. At the DCA we take an evidence-based approach in how we support members because they want to see real progress.
“By and large we have yet to organise workplaces where there’s enough flexibility to support the career interruptions that are often part of women’s lives. It’s in the interests of all employees to have the chance to work flexibly without impacting their career. Plus, it serves our whole economy and society to create a more agile and flexible workforce that is more future-ready, adaptive and innovative.”
Equal pay is essential
Broken work patterns are just one of many factors contributing to limited opportunities for women to achieve financial security throughout their lives. “The changes we need to make to promote economic empowerment for women are many and complex,” says Lisa. “39 per cent of the gender pay gap is due to the combined impact of years not working due to interruptions women experience in their career to care for children or other family members, part-time employment and unpaid work. The earnings deficit they experience as result is then compounded by the fact they’re also paid less when they are employed. The impact on their ability to build wealth and save for retirement is substantial.”
The fact that women are more likely to take up insecure and casual roles to allow for their other commitments is also a major contributor to this financial inequality. “During the COVID-19 pandemic we saw that unemployment associated with the economic slowdown and social distancing restrictions disproportionately impacted industries employing women.”
In the latest figures from the Workplace Gender Equality Agency (WGEA), financial services, has once again performed poorly in the gender pay gap, with a 23.6 per cent gap for the industry. This compares with an overall national pay gap of 13.4 per cent in Australia for 2021. Yet, financial services also leads the way in best-practice for supporting gender equality in the workplace. According to the Gender Equity Insights 2021 report published by the WGEA and Bankwest Curtin Economics Centre (BCEC), financial services scored the highest for gender equity good practice with a score of 61.6.
This is something of a paradox. As Lisa explains, it’s important to understand why there is a pay gap in order to grasp how our industry can be making headway with gender inclusive practices and persist in paying women less than men. “With the work we have done with WGEA and KPMG, we know what the gender pay gap is made up of,” she says. “In addressing the career interruptions component the big banks are generally doing well. Westpac, for example, were the first private company to offer paid maternity leave as they called it then.
“Another 17% of the gender pay gap is from occupational and industrial segregation and occupational segregation is significant in financial services. A senior member of an HR team won’t be paid as much as an equally senior member of an institutional banking team and women and men are overrepresented in each of these occupations respectively.”
Another important cause of the gender pay gap seen in an industry like financial services is discretionary rewards. In their Gender segregation in Australia’s workforce report from 2019, the WGEA reported that performance pay and additional remuneration generally play a greater role in male-dominated industries and roles, leading to higher gender pay gaps for total remuneration.
“When bonuses are awarded and people promoted, men are generally rewarded for their potential and women for performance,” says Lisa. “Potential is, of course, limitless. In addition, there is the real phenomenon known as the motherhood penalty and fatherhood reward. When these discretionary decisions about performance incentives are made, we see gender discrimination present. It can start from the very beginning of women’s careers as we see with graduate recruitment programs. Identically qualified individuals are entering an organisation straight from university, with women receiving lower salaries than men.”
Examples like this point to a third major element of the gender pay gap – gender discrimination, some of which actually breaks the law. “It’s unlawful to pay women less than men for the same work but it still happens,” says Lisa.
Flexibility for all
Although there is room for improvement in many industries, the gender pay gap has been gradually shrinking. This is, in part, thanks to the vision and persistence of leaders who have introduced important changes in how employees can organise their working lives. Not only does this benefit women and their financial position, it also supports choice for all and a more successful, resilient organisation.
“When David Thodey, CEO for Telstra, announced in 2013 that all roles would be flexible, his visible support triggered an important cultural change across the organisation,” says Lisa. “Declaring that all roles can be flexible puts the burden of proof on the manager who denies flexibility instead of on the employee to prove their case for being able to fulfil their role and follow a flexible working pattern. For an organisation like Telstra that looks after telecommunications networks and has many retail outlets, this was really significant. In knowledge-based roles, flexible working is more accepted, but this was a vital step towards solving for flexibility for organisations where employees need to have a visible presence when they’re working.”
Progress made in parental leave arrangements is also a very important measure of an organisation’s commitment to equality for women. “We’re now seeing most workplaces in Australia offering some paid leave and more of them are moving towards arrangements that support shared care by both parents,” says Lisa “If women are the only partner in a heteronormative relationship able to access paid leave, this has long-term effects on their partner’s involvement with raising their child.
“The more we have paid parental leave for both men and women, the less men will be excluded from the home environment. For many young men, this is no longer a desirable outcome. Just like women, more and more men want to be active parents and work flexibly so they can do that.”
Flexible working is just one pillar of a more inclusive workplace and inclusion is fundamental to an organisation where respect is the norm. “A workplace that accommodates lifestyle choices individuals make, regardless of their gender, is in everyone’s interests,” says Lisa. “At the DCA, we’ve created our Inclusion@Work Index to measure inclusion across Australian organisations in an empirical way. Organisations who measure high in inclusion scores, also rank high on discretionary effort by employees, reduced absenteeism and employees who take less risk. Across many measures that contribute to better organisational performance and efficiency, we can prove that inclusion produces improvements.
“Seeing data on inclusion presented in this way, Australian organisations can take inclusion seriously. In doing so they will make an important investment in winning the war for talent, being more innovative and creative and managing risk effectively. These are all essential for lifting economic output, for each organisation and for our country as a whole.”
Safety and respect
Supporting Australian organisations to be more competitive and successful is certainly an important goal. The Inclusion@Work initiative and many others are also designed to make organisations safer for the individuals who work there so each can succeed in their own lives. “Essentially the DCA is a research organisation,” says Lisa. “In supporting our members to enhance their capability in diversity and inclusion, we aim to create respectful workplaces where people connect with one another as equals and have opportunities for progress and advancement.”
“We’re now working in partnership with Our Watch to research and communicate the impacts of family violence and myths that stop it from being addressed in the workplace,” says Lisa. Our Watch is a national leader in the primary prevention of violence against women and their children in Australia. In her foreword to the DCA/Our Watch report Myth Busting Domestic and Family Violence at Work: Using Evidence to Debunk Common Myths and Assumptions, Our Watch Chief Executive Officer Patty Kinnersly says “Research tells us that by increasing gender equality in public and private life – including in workplaces – we can reduce violence against women.”
Events in the early months of 2021 have moved problems of sexual harassment and violence at work further up the agenda for our media, organisations and society as a whole. The DCA are doubling down on their work in this area with the #IStandForRespect campaign. “With the public allegations in the Brittany Higgins case, the conversation around respectful workplaces has become an important national debate,” says Lisa. “The #IStandForRespect pledge asks our DCA members and all workplaces to take a zero tolerance stance on gendered harassment and violence in all its forms and commit to take action when these events happen at work.”
So far more than 200 CEOs from DCA member organisations have signed the pledge. This visible support for putting a stop to workplace harassment is significant, but leaders also need to identify effective processes and follow through in using them.
“A commitment to action is not enough,” says Lisa. “This is why we run events for members to share best-practice in how to take action based on what the research says – addressing gender equality will prevent a hostile work environment. We need leaders who have the courage to hold people to account and run proper investigations when employees report that they feel unsafe at work.”
With many years of experience before and during her time with the DCA in researching, advocating and co-designing initiatives to address gender equality, Lisa is aware that organisations, their boards and leadership teams cannot change culture and social norms in isolation.
“To drive accountability in workplaces, regulators have a big role to play,” says Lisa. “The ASX making it mandatory for listed companies to disclose what they’re doing on gender equality in their annual reports is a great example of the difference policies can make in raising standards and expectations across the board.
“With the WGEA now collecting information from all non-public sector organisations with more than 100 employees on what they’re doing on a range of matters that impact a woman’s experience of work, many more are making genuine effort to make progress on these markers of gender equality from one year to the next.”
Two other policy areas where Lisa would welcome change to support better financial outcomes for women are childcare and education. “Our childcare models have an indirect but significant impact on income for women,” she says. “When heteronormative households are budgeting for childcare this is always discussed in terms of the woman’s earnings. But this is a family expense and shouldn’t only be justified if it’s a satisfactory trade-off between what a mother earns and what the family pays for childcare. There are serious implications for a women’s career trajectory and lifetime earnings if she stays disengaged from the workforce. It becomes a false choice when these economic factors aren’t taken into account.”
“We’re seeing an increased investment in childcare but this is being made through tax reform. Instead we need to see an absolute change in the way we provide childcare to Australian families, including a push towards socialised childcare – not distinguishing between early childhood education and other forms. Our society stands to benefit from children being educated properly, throughout their lives.”
Raising the bar for careers
In terms of education for girls and women, Australia is doing well in levelling the playing field. But as Lisa points out, this isn’t translating into better career outcomes. “Australia ranks first in the OECD for educational attainment for women,” says Lisa. “By the time girls come to choose a career, they’re opting out of higher paying roles and industries.
“There are a couple of ways to address this. One is to focus on rewarding professions where many women work, such as health services and early childhood education. After all, what’s more important than our health and our children? But we can also make it a priority to dismantle the narrow gender bind that keeps individuals from choosing a profession where they can excel, regardless of their gender. There are very strong gender norms in Australian society and we need to socialise boys and girls to believe that nothing is off the table for them when it comes to their identity and career.”