Why Pay Inequality for Women in NZ Remains a Critical Issue

Pay inequality remains one of the most pressing challenges in New Zealand, especially for women, and the statistics highlight just how dire the situation is. As of the most recent data, New Zealand's overall gender pay gap is 8.6%, a figure that has barely shifted over the past decade. However, the numbers are much more severe when broken down by ethnicity.

For Māori and Pasifika women, and increasingly for Asian women, the pay gap can be as high as 20%. This disparity means these women are effectively "working for free" for a substantial part of the year compared to their male counterparts. The financial toll of these pay disparities is immense, costing New Zealand women an estimated $18 billion annually. Such inequities have long-term consequences, reducing retirement savings and perpetuating economic disparities for future generations.

One of the main barriers to addressing this issue is complacency. Many businesses believe they are performing well in terms of pay equity, but the reality often paints a different picture. According to a recent survey, 89% of businesses think they have no pay gap. However, when companies start measuring, around 80% discover a significant pay discrepancy. This misperception contributes to the lack of urgency in tackling the problem, and without systematic measurement, these inequities remain unaddressed.

“The biggest barrier to overcoming [pay inequality] is that we just haven't focused on it. The pay gap overall costs New Zealand women eighteen billion dollars a year."

During a recent Frog Recruitment NZ Market Update, hosted by Shannon Barlow, Managing Director, and featuring guest Dellwyn Stuart, Co-Founder of The Pay Gap Insights Hub, the true cost and challenges of pay inequality were discussed in depth. Stuart, who led the impactful "Mind the Gap" campaign, shared insights into why this issue has been so challenging to tackle and how companies can move forward.

Stuart explained, "The biggest barrier to overcoming [pay inequality] is that we just haven't focused on it. We haven't done this measurement as a routine business tool." She emphasized that even though measuring pay gaps is relatively straightforward, complacency has been a major hurdle. "We think things are equal here," she continued, "since we were the first country to give women the vote, but actually, we're not. The pay gap overall costs New Zealand women eighteen billion dollars a year." Her comments underscore how vital it is for organizations to be proactive and take concrete steps toward pay equity.

One of the critical elements discussed was unconscious bias, which Stuart pointed out accounts for a significant portion of the unexplained pay gap. "Some organizations will routinely promote men into the same pay band at the higher end and women at the lower end," she said. These practices aren't necessarily deliberate but are ingrained biases that, once identified, can be addressed. By training people managers and implementing fairer pay practices, companies can start to close these gaps.

Shannon Barlow, reflecting on the conversation, shared how Frog Recruitment and its wider group have prioritized gender equity. "Across the group, seventy-two percent of our employees are female," Barlow noted proudly, "and over eighty percent of our managers and directors are also female." This commitment to equality is rare, especially when considering that some female-dominated industries still experience significant pay gaps at the leadership level.

Barlow also emphasized the long-term impact of pay inequality, pointing out how it affects not just the current workforce but the next generation. "Pay inequality isn't just an abstract issue," she remarked. "It's something that will shape the futures of young women stepping into their careers, and that's unacceptable in this day and age." Her comments highlight the urgency of taking action now to ensure a fairer future for all.

Addressing pay inequality requires commitment, visibility, and a willingness to confront uncomfortable truths. As Stuart aptly noted, "Once you see [the pay gap], nobody wants to have a pay gap. But once they see it, they want to fix it." It's clear that visibility and accountability are essential for real change.

So, what can businesses do to address these systemic issues?

1. Measure Your Pay Gaps Regularly: Understanding the scope of the problem is the first step. Conduct comprehensive pay audits that consider gender and ethnicity to get a clear picture of any discrepancies.
   
   
2. Increase Pay Transparency: Implementing transparent pay structures can reduce the opportunities for bias. Ensure all employees know how salaries are determined and what criteria are needed for pay raises.
   
   
3. Train Managers to Recognize and Address Bias: Provide training to managers on unconscious bias and ensure they are aware of how their decisions impact pay equity.
   
   
4. Standardize Hiring and Promotion Processes: Develop standardized guidelines for hiring and promotions to ensure equal opportunities for all employees.
   
   
5. Set Clear, Actionable Goals: Establish specific targets for reducing pay gaps and regularly track progress to hold your organization accountable.
   
   
6. Advocate for Policy Change: Support initiatives that push for legislative action to make pay gap measurement a requirement, not an option.

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In business since 2002 in New Zealand, Frog Recruitment is an award-winning recruitment agency with people at our heart. Located across Auckland and Wellington, we specialise in accounting and finance, business support, education, executive, government, HR, legal, marketing and digital, property, sales, supply chain, and technology sectors. As the proud recipients of the 2024 RCSA Excellence in Candidate Care Award, we are dedicated to helping businesses achieve success through a people-first approach.