Strategic Pay’s 2021 Pay Equity analysis highlights persistent gap

Findings from Strategic Pay’s second annual Pay Equity analysis have identified a lack of improvement in gender pay gap levels in the wake of COVID-19, reinforcing the need for meaningful and comprehensive organisational change if New Zealand is to succeed in addressing pay disparity.

The new report, based on data from over 180,000 employees around New Zealand, has identified an overall fixed remuneration pay gap of 18.5 per cent – a slight (but statistically insignificant) increase from just under 18% per cent in 2020 – which Strategic Pay Managing Director, Cathy Hendry, says reflects minimal wage movements over the last year.

“As businesses ride out the impact of COVID-19, many have either opted to implement pay freezes or restraints, or apply standard percentage wage increases across the board. In the event of the latter, of course that’s meant any existing pay gap will have increased to that same degree,” says Hendry.

A more in-depth analysis of the findings shows the vast proportion of the overall increase can be attributed to significant growth in the wage gap for CEO roles at large organisations, defined as those with annual revenue over $300m. Over the last 12 months, disparity in fixed remuneration at this level has grown from approximately 19% to 28%.

“This is not just a reflection of the fact that fewer women are moving into these senior roles overall, but also that those who do are generally within the health, education or public sectors. These “caring professions”, as they’re known, tend to pay considerably less than traditionally male-dominated industries such as IT or engineering – which have also seen pay levels rise even more in recent months, as ongoing border closures cause significant skills shortages. Meanwhile, the women who are working within these industries are often in lower-level, customer-facing roles which are undervalued by the market, and offer more limited opportunities for progression.

“It really is a perfect storm. This challenge of occupational and vertical segregation – or where women are working – is why tackling remuneration alone will never be enough to address the overall challenge of pay equity. We really need businesses to be actively creating a culture which supports women flourishing and succeeding across all levels and disciplines, by providing opportunities for flexibility, professional development, and mobility.

“Particularly for those industries that are really feeling the impact of border closures, and struggling to find good talent, I’d suggest there’s no better time than right now to be implementing this sort of meaningful change – making themselves infinitely more attractive to prospective employees, both male and female,” says Hendry.

Overall, the private sector continues to experience the greatest level of pay disparity, with a fixed remuneration pay gap of almost 20.8%, up slightly from 20.3% in 2020. Within the public sector, although females have maintained greater representation across senior positions (one third of roles, compared to one in five across the general market) the wage gap has increased from 18% last year, to sit just shy of 19%.

Meanwhile, the not-for-profit sector continues to lead the way for pay equity in New Zealand, with pay gap decreases of approximately 1% across all types of remuneration – including base salary, fixed remuneration (including benefits) and total remuneration (including performance bonuses or similar).

Unlike similar reports, the Strategic Pay analysis considers the value of fixed and variable benefits in addition to base salary, providing a more accurate picture of pay disparity levels. The report identified an overall gap of about 47% for bonus payments (averaging $5,616 average for males, and $3,000 for females), and almost 18% for KiwiSaver contributions ($2,412 for males, compared to $1,989 for females).

“Failing to consider the significant financial value of other benefits – such as company cars, superannuation contributions or performance bonuses – leaves us with a woefully incomplete understanding of the reality of the wage gap. Our analysis clearly demonstrates why it’s so important to dig a little deeper, and explore the detail,” concludes Hendry.

For more information, or to download the full report, check out

https://www.strategicpay.co.nz/pay-equity-booklet

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