Are we paying our HR leaders fairly?

International Women’s Day 2022 is shining the spotlight on gender bias, discrimination and stereotyping with their #BreakTheBias campaign theme. It got us thinking about gender equality and specifically pay gaps, an issue that spans all sectors. Because of the nature of their role, we often look to HR professionals to lead the movement towards pay equity. Rather ironically however, are we actually paying our HR leaders fairly?

Pay equity is a pressing organisational issue with research showing us that female workers are generally paid less than their male colleagues. This is compounded for female-dominated occupations where women continue to be lower paid than traditionally male-dominated occupations. The disparity continues, with females underrepresented in leadership positions and also more likely to carry the load for the majority of unpaid work.

We’re not going to delve too deeply into the stats because of the startling disparities. The most recent StatsNZ results put the gender pay gap at 9.1%, research from consulting firm Strategic Pay has it sitting at 18.5%. Narrow your focus to a specific business and the figure varies even more widely; an audit at Westpac in 2019 revealed an overall gap of 30%.

Looking at the HR function specifically, it’s no secret that it is a female dominated field particularly in senior leadership which is warranted when you factor in the experience required to be effective at that level (and the likelihood that there are more women who match the criteria). There’s also the ongoing debate around whether HR is undervalued and therefore paid less than other senior-level positions, or, is it an occupational segregation issue where HR professionals are paid less because it is a female-dominated occupation.

Trying to pinpoint a definitive reason for why our HR professionals may not be remunerated fairly is near impossible. It is a long standing and complex issue; the history of equal pay can be traced back to the 1890s when New Zealand women won the right to vote, and women’s organisations called for equal pay for men and women.

It is however generally agreed that income disparity is strongly linked to behaviours, attitude and bias. Whether that’s a belief about the relative importance of an occupation or the differences in behaviours between men and women (like a willingness to negotiate pay and conditions), or the inherent challenge of bias which is often unconscious and makes it difficult for women to succeed in the workplace. Basically, we are talking about a complex societal issue that isn’t the responsibility of the business community alone.

It starts with measurement; HR metrics are essential to prove the existence of inequalities but also to demonstrate positive progress. For organisations that are prioritising diversity, equity and inclusion (DE&I) and demonstrate remuneration transparency, this could be the differentiator in securing and retaining top talent. Recent research from Deloitte found that 40% of workers would consider resigning if they didn’t trust their employer to fulfil DE&I promises.

Reporting doesn’t have to be restricted to organisational-wide. There are a plethora of online salary benchmarking tools giving workers a greater sense of their actual worth. And with the push for public reporting gaining momentum, this could be one step before mandated reporting. As an example, MindTheGap has recently launched a public pay gap registry to show whether or not a New Zealand based business has published its pay gap.

There’s agreement that organisations with formal strategic remuneration, performance development and performance improvement strategies and structures in place are more likely to achieve pay equality – with any pay gaps correcting themselves over time. The problem is continue to have a gender pay gap in New Zealand. Plus achieving pay parity is only a small piece of the puzzle in tackling inequality between men and women.

Rethinking all talent management processes – from recruitment through to performance – and using a consistent approach across all base level employment decisions can help reduce inequality. Organisations also need to show a commitment to diverse leadership, promote and model flexible working and parental leave, and provide mentoring and sponsorship to support women (particularly those who take career breaks).

Our HR leaders have been at the forefront of navigating an organisational response to the impacts of COVID-19. They have been riding wave after wave as the pandemic unfolded with no real playbook for dealing with this level of crisis. Don’t undervalue your HR leaders, they make a significant strategic contribution and are the engine room of your organisation’s human capital.

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