Hon Paula Bennett
Minister for Women
7 March 2017 Speech

Speech to HRINZ: The reason for the Gender Pay Gap

Good afternoon, and thank you for coming along today. I’d like to acknowledge Chris Till and the Human Resources Institute for hosting me.

This is my first major speech as Minister for Women and that seems quite appropriate given that tomorrow is International Women’s Day.

In just about every speech I have given since taking over my new portfolios I get someone from the audience ask me if there is a Ministry for Men. My answer is simple. When we have closed the gender pay gap and women aren’t predominantly the victims of domestic and sexual violence I will look to close down the Ministry for Women.

Today we are going to dig deeper into the gender pay gap – unfortunately there is still a lot of work to be done. I’d like to acknowledge Margaret Retter, the Acting Chief Executive at the Ministry for Women, Professor Gail Pacheco whose research about the Gender Pay Gap I’ll be discussing today.

I asked to be the Minister for Women, it is a privilege to be an advocate for women and I think there’s much we can achieve. And I think that alongside being the Minister for State Services I can actually get a lot done around pay equity and pay equality in the Public Sector. As Minister for Police I work as part of the team working towards reducing domestic violence victims – but that’s another speech for another day.

I want to talk to you today about the Gender Pay Gap. Closing the Gap is one of my top priorities as Minister. I reluctantly accept that it won’t change overnight. But it is simply unacceptable that women who are as productive and contribute so significantly to business and the economy are paid less than men. There are some historical reasons for pay equity where women’s work was simply valued less than men’s contribution to the workforce. I want to thank the unions and business for working with government to design a set of principles that mean we can work our way through some of the claims. As I announced last week we are working with unions to apply the principles in some cases already, and the negotiations on Terranova are ongoing and as such something I can’t talk about.

So let’s talk gender pay. For the past decade the Gender Pay Gap has stayed about the same at around 12 per cent. That’s women earning 12 per cent less than men.

So why is it that for an entire decade we haven’t been able to close the gap?

The Auckland University of Technology, on behalf of the Ministry for Women carried out some research which is being released today. I have to say – the findings of this study are actually really disappointing.

The last time research was done – back in 2003 - it identified a range of factors that contributed to 40 to 80 per cent of the Gender Pay Gap. They’re the traditional factors that we all know about. They include the differences in occupation and industry of employment, differences in the amount of work experience between women and men, and women’s qualifications relative to men. But what this report, in 2017 has found is that those are no longer the biggest factors in why women are paid less than men. In fact – those traditional reasons play a very small role, around 20 per cent can be explained for these reasons. As Professor Pacheco will tell you, between 64 to 83 per cent now can’t be explained.

Over the past decade women have gone away and addressed some of these factors. We’ve become more educated. Fewer girls than boys leave school without any qualification. 50.7 per cent of school leavers with NCEA level 2 or above are girls. Sixty per cent of people who gain tertiary certificates and diplomas are women. Sixty per cent of people who gain bachelors and above are women.

Not only have we risen to the challenge of becoming more educated, women are being encouraged into areas like science, technology, engineering and maths which have traditionally been male dominated, we’re participating more in the labour market, we have the fourth highest participation rate in the OECD. We’ve starting moving more in male dominated occupations.

But despite all of that, up to 84 per cent of the reason for the Pay Gap, that’s right, 84 per cent, is described as ‘unexplained factors.’ That means its bias against women, both conscious and unconscious. It’s about the attitudes and assumptions of women in the workplace, it’s about employing people who we think will fit in – and when you have a workforce of men, particularly in senior roles then it seems likely you’re going to stick with the status quo – whether they do that intentionally or just because “like attracts like”. It’s because there is still a belief that women will accept less pay than men – they don’t know their worth and aren’t as good at negotiating.

You are a very important audience. You are a powerful group of people, you do the hiring. You are involved in setting pay rates. As Chris Till said in his introduction, 80 per cent of your membership are women.

I’m here today to tell you that it’s no longer acceptable to keep ignoring this issue.

I’m not here to tell you off, or put the blame on you. We need to look for solutions. We need to consciously work together to put this right.

It will take a concerted effort to reduce the gender pay gap. Our former Finance Minister, now Prime Minister, Bill English is a good example of someone striving to do better for women. When he was Minister of Finance he had to approve board appointments. He’d receive lists that were mostly, if not entirely men. So instead of taking the attitude “that must be all there was out there” and the word of Treasury that these were the only qualified candidates, he’d send the list back to Treasury and wouldn’t consider making appointments until he had women to choose from. And sure enough – once Treasury was challenged they always found good women candidates. He would still always choose the best person for the job – he just insisted on having the best to choose from. Forty eight per cent of his board appointments as Finance Minister were women.

That’s the sort of attitude we should all be taking. When you go to hire someone – do you put forward a list to your employer that has gender balance? Do you question why women aren’t putting themselves forward for roles that they’re clearly capable of doing? Do you encourage women to have a shot at it? And do you encourage your employer by putting women forward to them. Do you actively seek women out when they’re not coming forward themselves?

As I’ve said, this is about finding solutions. We know that women are less likely to go for a promotion than men, we know that women will look at a job description and will only apply if they meet a hundred per cent of the requirements, men will apply knowing they have skills for 60 per cent of the role. That’s frustrating for me and not good for your business as you may have a potential applicant who can do 80 per cent of the role but you are going to choose from the bloke who can do 60 per cent.

Yes, as women we can do more to help ourselves, of course we can – everyone can, men and women, CEOs, HR managers, teachers, parents and current employees.

When I worked in recruitment I used to challenge women to put themselves forward, to step up. The question I always used to get women to ask themselves when considering a role was ‘why not me?’ When they look at the other male candidate who’s not as qualified but willing to go for it anyway – do they think he will do a better job than them? Does he deserve the promotion, the pay increase?

I’ve been the woman fighting for a promotion – you may have heard I did it quite recently – going for the deputy PM role. In my teens and through my 20’s I was plagued by self-doubt and low confidence. Not anymore. I knew I was the right person for the job. I also knew some would question me about being the Minister for Women. I would be “too something” for just about everyone. Too stroppy, too weak, too old, too young, too feminist, not feminist enough. That one is interesting. Feminism means different things to different people these days. I am very comfortable being a feminist. I don’t judge others who sit in different places on the spectrum – they of course get to judge me, but that is called politics.

I’m now a mentor to some in parliament, and some that want to get into parliament. I believe women should support each other and mentor each other along the way. It might surprise you to know this, but even as Deputy Prime Minister I still sought out a mentor, outside of politics, to provide me with support and advice. Asking for guidance and leaning on others occasionally is not a sign of weakness but in my view a sign of strength.

Women need to be supported by employers when they try to do this. Research shows that women are no longer afraid to negotiate but it isn’t as well received by their bosses as when men do. They might get a small pay rise but they won’t move as high up their pay band as when men negotiate. Attitudes need to change. Judge her on what she contributes to the business or organisation, not on her gender. I can hear the gasp from some indignant employers. They will staunchly declare that they are not biased and that they actively promote women. They may of course be absolutely right, I tell them they should do a gender pay gap audit within the business and publish the results if they are that confident. The public service recently did this by department. It means we are open and can continue to make positive gains for women.

So let’s take a look at some of the positive examples from employers about what they are doing to change their behaviour and encourage women because there is some really great work being done in both the private and public sectors.

I am really enjoying being the Minister for Police. They’ve set a target of 50 per cent of police recruits being women. They’ve launched a TV show called “Women in Blue” to highlight police as a career for women. They carry out unconscious bias training and a Women’s Advisory Network Steering Group advises the Police Commissioner and Police executive on the best ways to improve the recruitment, retention and progress of women.

Treasury has recognised that it can only deliver a high living standard for New Zealanders by listening to the viewpoints of all Kiwis. So it’s running a gender and ethnic diversity programme. It checks for gender equity during all performance and pay discussions. It runs training for unconscious bias for all staff. And it has blind recruitment in the graduate and internship programme.

Within Government we’re doing things like making Careers New Zealand part of the Tertiary Education Commission. There will be more and better advice to all young people about their career prospects. We’ll make sure girls and women know exactly what they can achieve and encourage them towards careers they might not have thought possible.

In the private sector I’m told that companies like Fletchers, OPUS, Beca, Xero, Vodafone and Dimension Data are all actively encouraging women in their workforce through recruitment and retention policies, flexible hours, apprenticeships and marketing their industry to women. It’s fantastic to hear those stories.

Last month we saw Kate McKenzie become the Chief Executive of Chorus. She’s the only women CE at a company listed on the NZX 50. The only one. Come on New Zealand business – we can do better than that, we need more women CEs.

So what can we do? There are some practical solutions. The first step is recognising where there’s a problem. Organisations don’t set out to create a pay gap. A gender pay audit might be a good way to find if there is a problem. Look at your recruitment processes. Look at whether women are being promoted into positions they deserve, are you shoulder tapping people when they’re worthy of promotion? Often women are being recruited but not retained or progressed to senior management.

I’m here today to set down a challenge. If we’re going to change this. If in another decade we actually want the 12 per cent gap to have reduced – then it starts with all of us, including you and your attitudes. Let’s look at ways of how we can improve the gap.

Our challenge is to hire a person based on merit, to give women as many opportunities as men and to pay them what they are worth.

It’s 2017. So employers it’s time to remember three things.

It’s not about what you can get away with.

It’s not about what she is willing to accept.

It’s simply about what you paying her what she is worth.

Thank you for hosting me today and now invite you to ask some questions.

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