Women’s Economic Empowerment, Work Force Participation and Closing the Gender Pay Gap

Women’s economic empowerment is central to a gender-equal world. When women are given equal opportunities to earn, learn and lead – entire communities thrive.

The theme for International Women’s Day 2024 is Count Her In: Invest in Women. Accelerate Progress.

While important progress has been made, women face significant obstacles to achieving equal participation in the economy. Without equal access to education, employment pathways, financial services and literacy, how can we ever hope to reach gender equity.

With this in mind, the team at QIG have decided to unpack two key areas connected with Women’s economic empowerment that they are experts in: workforce participation and the gender pay gap. Whether it’s navigating the return-to-work experience, negotiating conditions that work for both parties or more broadly pay rises and promotion opportunities, our results with organisations and individual women showcase the opportunities available to us all, as together we facilitate pathways to greater economic inclusion for women and girls everywhere.

What is Economic Empowerment and why does it matter?

Women’s economic empowerment1 is central to realising women’s rights and gender equality and includes• women’s ability to participate equally in markets (including employment)• their access to and control over resources,• access to decent work,• control over their time, lives and bodies, and• agency and meaningful participation in economic decision-making at all levels

Why it matters

When more women work, economies grow.

Women’s economic empowerment boosts productivity and increases economic diversification and income equality. For example, $128,000,000,0002 is the value to the Australian economy that can be realised by purposefully removing the persistent and pervasive barriers to women’s full and equal participation in economic activity recognising, however, that this by itself does not automatically lead to a reduction in gender-based inequality.

Education, upskilling and re-skilling are critical for wellbeing and women’s income-generation opportunities and participation in the formal labour market. But, for the majority of women, significant gains in education have not translated into better labour market outcomes.

Women’s economic equality is good for business. Companies greatly benefit from increasing employment and leadership opportunities for women, which is shown to increase organisational effectiveness, innovation and performance. Institutional Investors know that this is what’s required to run profitable organisations and are starting to demand that organisations they invest in reach at least 40/40/20 across all levels.

It’s good for governments and society: financial security at all stages of life means greater choice, options, security and safety and less reliance on welfare.

Some quick stats

  • Overall: The World Economic Forum’s Global Gender Gap Report attempts to benchmark countries’ performance on gender equality more broadly, against four key sub-indexes: economic participation and opportunity; educational attainment; health and survival; and political empowerment. According to the report, at the current rate of progress over the 2006- 2023 span, it will take 169 years to close the Economic Participation and Opportunity gender gap. Australia’s ranking of women’s economic participation and opportunity is 38th 3 in the world.
  • Workforce Participation: Women remain less likely to participate in the labour market than men around the world. The global labour force participation rate for women is just over 50% compared to 80% for men. In Australia, the participation rate is 62.4%4, with women more likely to work part-time or casually than full time (42.7%) as compared to their male peers (66.9%)5. Progression opportunities for anyone working part-time are limited.
  • Gender Pay Gap: Globally, women are paid 20 per cent less than men. An Australian woman earns $1 million less6 across the lifetime of her career when compared to her male counterparts, which doubles (increases to $2 million) if she chooses to have a least one child7. On current projections, it will take 26 years to close the gender pay gap in Australia.
  • Superannuation: In the 2019-20 financial year, the median superannuation balance of women aged 65+ years was $168,000 for women, compared to $208,200 for men8.
  • Career Progression: Women are constrained from achieving the highest leadership positions: Only 10% of Fortune 500 CEOs are women which is consistent with the ASX 200.
  • Caring Responsibilities: Women bear disproportionate responsibility for unpaid care and domestic work. In Australia women who participate in unpaid work activities spent on average 4 hours 31 minutes a day, while males spent 3 hours 12 minutes9. The amount of time devoted to unpaid care work is negatively correlated with female labour force participation.

The Impact of Workforce Participation and The Gender Pay Gap on Economic Empowerment and Economic Equity

We have decided to unpack two key areas connected with Women’s economic empowerment that we are experts in: workforce participation and the gender pay gap.

Whether it’s navigating the return-to-work experience, negotiating those conditions or more broadly pay rises and promotion opportunities, our results with organisations and individual women showcase the opportunities available as together we facilitate pathways to greater economic inclusion for women and girls everywhere.

Why workforce participation matters?

When more women work, more women increase their experience, which increases their earning capacity (including superannuation) and it:• Increases their skills ,capabilities and experience• Increases progression opportunities available, and• Increases their confidence (we know through hour work, the more experience women have the more confident they will feel).

What gets in the way of women’s work that forces participation decisions?

  • Societal norms / systemic factors
    • Societal and cultural assumptions around care giving and the way they influence individual loyalties, beliefs and decision-making eg. the expectation that women will take on primary care of children and household responsibilities (the mental & emotional load is not shared equitably).
    • Undervaluation of female-dominated industries impacting the earning capacity of many women.
    • Childhood messaging impacting education and industry choices and the flexibility and opportunities available within those industries.
    • Gender bias in the recruitment and development of female vs male talent eg assignment of stretch projects, opportunities, mentoring / sponsorship relationships.
    • The impact of bullying / harassment on women’s career choices.
  • Structural barriers
    • Disincentives to work full-time hours related to gender pay gap (including childcare costs, taxation policy).
    • Cost and availability of childcare.
    • Limitation of progression opportunities / senior roles available for women not working full time.
  • Individual beliefs and assumptions
    • Perceptions vs reality of what a woman can or can’t do and the assumptions of what’s required / what I can ask for / what am I capable of doing.
    • Individual fears and concerns about the cost of getting something wrong (not doing something perfectly) or what is required to be ‘ready’ to say yes to an opportunity.
    • Assumptions and expectations around what is required to successfully progress and the compromises in life required to do so.

Why does the gender pay gap matters?

Ultimately this is the constant measure of the difference in male and female earning and spending power and provides context, tracks progress and exposes issues for organisations, industries and governments.

The gender pay gap is not equal pay for equal work (which was enshrined in legislation via the Affirmative Action (Equal Employment Opportunity for Women) Act 1986, (replaced by the Equal Opportunity for Women in the Workplace Act 1999 and then the Workplace Gender Equality Act 2012).

The OECD defines the gender pay gap as the difference between median10[i] earnings of men and women relative to median earnings of men. Australia’s estimated gender pay gap as published in Australia’s Gender Equality Scorecard 2023-23 published by WGEA is 19 per cent. Note WGEA reporting includes the full-time equivalent of part-time and casual employees, however, is limited to private sector organisations with 100 or more employees.

While there are various approaches and debate about how the gender pay gap is calculated what remains consistent across them all is a stubborn gap which impacts women’s economic empowerment.

Motherhood penalty severely impacts women’s economic empowerment.

A report released by Treasury in October 202211 revealed that women’s earnings are reduced by an average of 55 per cent in the first 5 years of parenthood. The gap in earnings termed the ‘motherhood penalty’ remains significant a decade into parenthood.

What gets in the way of the gender pay equity?

In 2022 KPMG published She’s Price(d)less12, The economics of the gender pay gap which talks to 4 significant items driving 87% of the gender pay gap. These are:

  • Gender discrimination, 36%: defined as the element of the gender pay gap that would remain if men and women in other respects such as education, time in the workforce, and age were equal. Gender discrimination in the workforce is linked to practices such as workplace culture, hiring, promotion and access to training. Bias and assumptions in workplaces by many that believe there is no ‘real’ gender pay gap or that the work in this space is done is impacting the success of initiatives designed to address this aspect.
  • Years not working, 20%: due to career interruptions, including career breaks, study and unemployment.
  • Industrial segregation, 20%: the industries, occupations and enterprises that are dominated by women often face a wage penalty and also have significantly higher proportions of part-time and casual workers. Since 2017, industrial segregation has grown by 11 per cent to contribute 20 per cent of the gender wage gap in 2020.
  • Part-time employment, 11%: impacting current income and long-term earning potential, as part-time workers may be provided with fewer opportunities to develop their skills and miss out on promotional opportunities often viewed as not being interested or having the capacity for such progression.

Levers for change

In September 2022, the Minister for Women established the Women’s Economic Equality Taskforce. The Taskforce’s role was to provide recommendations to inform the Federal Government’s action to build economic equality for the ensuing decade. In August 2023 they handed down their final report that detailed these recommendations which focused on 5 economic pillars where gender inequality is prevalent:

  • Care
  • Work
  • Education and skills
  • Tax and transfers
  • Government

These recommendations are comprehensive and include changes to government decision-making, budgeting, and policy design, driving reform across both female and male-dominated industries, and enhanced accessibility to flexible working to share but a few. The recommendations represent significant potential for progress at a national level over the coming decade. In addition to this, our work provides evidence of the impact a grassroots focus of supporting individual women to drive change for themselves, their teams and organisations, and society, one woman at a time.

Our mission at Quantum Impact Group is to help individual women to accelerate their career by overcoming the roadblocks (things like self-doubt, fear, imposter syndrome) that often hold them back from achieving what they want in career and life. Working both individually with women and supporting organisations to grow and develop their female talent pipeline, our programs deliver transformational results and impact across organisations and systems.

How To Drive Change in Workforce Participation and The Gender Pay Gap

Below are actions and initiatives that can be taken to drive change when it comes to women’s workforce participation and the gender pay gap in your organisation. This is not an exhaustive list and our hope is that no matter what your situation and role, we each can take action to collectively shift the dial on these two important issues.

Individuals

  • Raise an awareness around your conditioning of societal norms and the default assumptions and beliefs that impact your decision-making. Many women are not consciously aware of how much these are impacting the choices being made AND the impact it is having on their career potential and progression.
  • Get clear about who you are, what you really want and how you could get there. Clarity creates confidence and courage, which creates a compelling why when it comes to stepping outside your comfort zone.
  • Spotlight and acknowledge your fears. It is human to have fears, it is normal to feel uncomfortable with change and uncertainty and our nervous system is wired to react to any perceived risk or threat such as being laughed at, getting something wrong, failing or not knowing an answer. Recognise these reactions and develop self-coaching skills to navigate through these dynamics rather than avoiding them.
  • Take small acts of confidence to provide evidence that will challenge old beliefs, assumptions and default behaviours. Recognise low stakes, safe opportunities to take imperfect action (for example: ask for what you want, negotiate for what you’re worth, say no to an opportunity / task or request). As you do, you will right size the perceived risks, concerns or fears.
  • Talk about what is going on for you. Whether you feel undervalued, underpaid or are thinking about applying for a new opportunity but feel a little out of your depth, discuss it with a friend, a colleague or mentor. Other independent perspectives can help us form a more balanced view.

Leaders

  • Get involved: ask about your organisation, department or team’s work force participation and gender pay gap. Try and understand what is driving the gap and seek to advocate when opportunities present themselves.
  • Remain vigilant with biases relating to recruitment and salary decisions/discussions. Even the greatest advocate can fall prey to assumptions and beliefs that get in the way of good intentions.
  • Be proactive with preparing for parental leave – establish a plan and personally support your team member as well as staying in touch where this is their preferred option.
  • Coach them and be a mirror for behaviour that can be a roadblock to career progression. Ask great questions to draw out their talent and contribution; encourage them to step outside their comfort zone.
  • Talk to them about the importance of being visible by sharing their contribution & achievements, engaging with senior stakeholders and decision makers. Create opportunities for them to do this.

Organisations

  • Use WGEA reporting as an opportunity to have conversations across your organisation and leverage your employees to recognise issues and develop organisation wide solutions. Leverage WGEA’s toolkit: https://www.wgea.gov.au/tools/gender-strategy-toolkit
  • Pilot, test and keep improving return-to-work programs to increase engagement and retention of women throughout parental leave. Encourage and showcase (not celebrate) male peers who are also taking parental leave.
  • Get creative regarding flexible work opportunities including job share, part-time and compressed working weeks. In many circumstances the default for many leaders is it’s too hard, however these strategies can be a great way to attract and retain top female talent.
  • Create career development plans for high-potential female talent as part of your regular succession planning process and invest in their growth. Initiatives like QIG’s Acts of Confidence Program, support women to take small acts of confidence consistently over time, challenge a lot of default behaviours and beliefs that hold women back and reset their often-unrealistic expectations of themselves.
  • Develop hiring and remuneration policies to provide oversight and cross checks to unconscious bias behaviour that will inevitable show up during these processes. Don’t shame, blame or make people wrong, rather normalise that this happens and that the checks are there to help achieve gender-equal outcomes.
  • Develop a network of allies that can be ambassadors and key influencers in driving change across the organisation. Use this group to address cultural behaviours and norms that may otherwise be unspoken and/or be roadblocks for other gender equal initiatives.

Industry bodies

  • Provide resources for smaller businesses who do not have the capacity or capability to address some of the challenges discussed in this document as part of their business plan.
  • Promote education and career pathways for female talent especially in male-dominated industries and showcase role models who have been successful in the sector.
  • Create connections for women with peers and mentors and provide proven development opportunities. Many of the most successful development and mentoring programs are run by industry groups who are seen as trusted partners to individuals and organisations.
  • Address wage inequality in female-dominated industries and advocate for reform with key government agencies and other stakeholders.
  • Cultivate a network of allies that can be ambassadors and key influencers in driving change across the industry. Use this group to address cultural behaviours and norms that may otherwise be unspoken and/or be roadblocks for other gender-equal initiatives.

Conclusion

We all have a part of play. While government has a taskforce and is talking about the structures that need to shift, there are practical, tangible ways organisations and the individuals within them can impact and support the economic empowerment of women.

If you’d like to discuss how your organisation can address women’s workforce participation or the gender pay gap reach out to fiona@quantumimpact.com.au.If you’d like to access a copy of our summary document on this topic, send an email to info@quantumimpact.com.au and we’ll get a link across to you.

 

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https://www.unwomen.org/en/what-we-do/economic-empowerment/facts-and-figures#notes

2 Deloitte Access Economics and Australians Investing in Women, ‘Breaking the Norm: Unleashing Australia’s Economic Potential’, Deloitte Access Economics, November 2022, p. vii.

3 Page 17, Table 1.2 The Global Gender Gap Index 2023, results by subindex (World Economic Forum)

4 Australian Bureau of Statistics (ABS) Feb 2022

5 Australia’s Gender Equality Scorecard 2022-23, WGEA page 14

6 The Times They Aren’t A-Changin, The Centre for Future Work at the Australia Institute 2023

7 D Wood, K Griffiths and O Emslie, ‘Cheaper childcare: A practical plan to boost female workforce participation’, Grattan Institute, August 2023, p15.8 ABS (2022) Household Income and Wealth, Australia (2019-20 financial year)9 ABS, ‘How Australians Use Their Time, Table 1 Time Spent’, ABS Website, 202210 The mean (average) of a data set is found by adding all numbers in the data set and then dividing by the number of values in the set. The median is the middle value when a data set is ordered from least to greatest. For example, suppose that five homes sold in a market with the following prices: $80,000, $90,000, $100,000, $110,000 and $500,000. The median price is $100,000, while the average price is (80,000 + 90,000 + 100,000 + 110,000 + 500,000) / 5 = $176,000. Identifying the middle of the dataset assists in accounting for outliers, which can occur with CEO remuneration, for example

11 Children and the gender earnings gap, Treasury Round Up, October 2022

12 Prepared with Diversity Council Australia (DCA) and the Workplace Gender Equality Agency (WGEA)