Event: Interview with Elysse Morgan, ABC, The Business
Date: 24 September 2018
Topics: Workplace diversity and equal pay 
E&OE

Elysse Morgan, Host: Jennifer Westacott, welcome back to the program.

Jennifer Westacott, Chief Executive, Business Council of Australia: Thanks very much.

Elysse: Will the Business Council support Labor’s policy of publishing the pay data?

Jennifer: Well, I think you’ve got to break this down. We've got a couple of issues here that we really need to make sure everyone understands what we're talking about. The first is, at an aggregate level, whether women get paid less than men, and the data is that over the 1990s that gap, if you will, was around 15 per cent – 18 per cent, down now to around 14 per cent. Obviously, women's participation is now at a record high. But that gap is driven by things like recruitment, promotion, talent pipelines, how people are recruited, how people are mentored, the opportunities they're given for development. Then the second issue that drives that problem is of course that many women are in jobs that are not well valued. The whole caring profession. So, that's a problem that is quite systemic. So we’ve got to fix that problem, that aggregate problem. Then the second issue is whether women are paid less to do the same job as men. The data I've seen, international data, says that that's far less of a problem. Indeed, that is about 98 per cent, women are paid 98 per cent of their male equivalent in the same job. Now, I think it's important to get those issues right to answer your question. Because, if we're serious about solving those complex problems of recruitment, of pipeline, of talent development, of the fact that some professions are not valued, making a very small percentage of the economy publicly report on that, I'm not sure that that is actually going to solve that problem. And I'm always nervous of these smoke screens or kind of virtue signalling, if you will, ideas that really are not actually getting to the problem. This is a problem. We do have to fix it. Is this the best way of fixing it? I'm not sure. If we're really serious about fixing it, well let's make sure we have the same reporting regime for government departments. I mean, interestingly, last time Labor was in office, when they introduced the diversity reporting standards, they exempted government departments. They exempted themselves. So, if we're serious. Let's get serious. I'm happy to sit down with the Labor Party and try and work this out. But simply naming and shaming large companies, a small percentage in the economy, I'm not sure that's the way to fix it.

Elysse: It's 3 million workers. It's 700 companies. It's the biggest companies that we've got. So, it's not really a small percentage, it's a lot of big employers. It's a lot of workers. Isn't this... I mean, there are a whole range of issues, as you mentioned, but isn't this just a good first step in order to actually make companies accountable about who they're hiring, about how they're hiring, and about how they're awarding promotions?

Jennifer: Many people are covered under diversity reporting. If the data's already there, why not report everyone, why not report on government agencies. So as long as this is a genuine effort, in which case you'll be sitting down and making sure that we're not just kind of reporting the symptom, we're reporting actually kind of what is driving this. Certainly, when we did a study last year, the very existence of polices, we found, had no impact on the number of women in positions of seniority. It was all about those pipelines, training, development. So, this is just a naming and shaming of large companies versus a serious effort to get to the bottom of something that doesn't just exist in large companies. This is across the whole of the economy, the whole of society, and people will get serious about it and they'll sit down in business and we'll make sure that we understand what's driving it and we make sure that some sectors, where it's going to take a lot longer in some of those traditional male-dominated sectors. We've got to get to the bottom of that. But I think, if this just a naming and shaming exercise, what I'm anxious about, what I'm really anxious about, is that when we do these things often companies just go and do a kind of tick box exercise. We don't want that. We want culture change.

Elysse: So would you be more willing to put the BCA’s support behind it if it wasn't just the top 700 companies or employers with 1,000 or more employees, if it was everyone? If everyone's data that reports to the WGEA was out and publicly available?

Jennifer: Yeah, and if there was a genuine effort, to not just name and shame organisations, but a genuine effort to say what is it that we want from this data? How do we make sure that we're really tracking the systemic issues that sit behind that? I can tell you that the large companies are all working hard at this. They are all working hard at making sure there are more women in senior positions, which of course is really at the cause of these pay gap issues, which is that many women do not have the same pipelines that have access to the more highly paid jobs. My other point being that many women are doing what society values as low-paid work. In particular, in the caring sector, we should do something about that. So, if it's an attempt to do something about these issues, fine. If it's an attempt just to name and shame large employers, then it won't solve the problem.

Elysse: Labor’s proposed also changing the Fair Work Act to prohibit pay secrecy clauses, meaning that men and women can discuss, in the workplace, who's getting paid what. Basic, accountability within the workplace. Now, it's been found that some of the biggest companies are the ones who enforce these the most, big banks and the finance sector are the biggest users of these clauses. Will you support the removal of those?

Jennifer: Well let’s sit down and work the detail out. And again, if this is across the whole economy, then that's something we should talk about. Again, what are we trying to solve with that?

Elysse: Well, pay equality amongst men and women in the same workplace.

Jennifer: Sure, let's make sure that that's the reason we actually want to solve it. Look, certainly for the very senior people in companies, companies have to do a report to their shareholders that gives tremendous detail about the pay arrangements. But of course, there should be more transparency. But of course, you are talking about negotiated contracts. These things sound great until someone says, whether it's a man or woman, I actually don't want that detail revealed.

Elysse: But it's not going to be about personal, I mean, the whole thing about removing the pay secrecy clauses is about you can personally tell someone what you're paid, if you wish to. At the larger scale, the publishing of the pay data is just a company statistic.

Jennifer: It may be fine but again the most important thing is for the Labor Party to do is sit down with business and try and work out what problem we're trying to solve. Is me telling you how my pay is structured going to solve the systemic problem about the whole issue of pipelines and training and recruitment and development and the way management positions are described? The way attributes are given to leadership positions? Those are the issues that serious research has shown that's what you’ve got to fix. We don't want to do these things that are just kind of superficial things that make people feel good. We have to fix some of these problems. I can assure you, large corporations are actually really trying hard to fix this problem but it's not going to get fixed overnight. Simply naming and shaming companies and doing a few things around the edges is not going to fix a very systemic problem.

Elysse: But doesn't it help start the conversation and bring into, I mean, if large companies have nothing to fear, and if they are working hard to fix these problems, surely they, surely they have nothing to fear from publishing–

Jennifer: Then report the whole economy. If we've got nothing to fear, why did government exempt itself from these guidelines? If we've got nothing to fear, report the whole economy. If this is not going to add a burden to small business and another regulatory burden, then report the whole thing because this is an economy-wide, society-wide problem, don’t just pick on the big companies. We're serious about it and we want to make this is a first step. Let's actually, seriously look across the economy and say, what is happening? Why is it that women aren't getting access to middle management and senior positions that are going to give them a pipeline to earning more money? If we're really serious about it, do it for the whole economy. Do it for all these government agencies.

Elysse: What's the BCA’s ideas for addressing, if it's not this, then what's the BCA's policies for getting more women into managerial roles, executive roles, and ensuring that when they're there they are actually paid the same as their male counterparts?

Jennifer: Well as I said, that is less of an issue. When women are doing the same job, the research that I've seen, international research, shows that there's a 98 per cent match. Now, we have to do something about the 2 per cent.

Elysse: When you say international research, are you talking around the globe or are you talking about international research, on Australia?

Jennifer: International research around the globe, and some stuff I've seen in Australia. So, this is not as big an issue. But that's probably something some research should really get to the bottom of. But I think that's far less of an issue. So, people tend to sort of use the pay equity discussion as you and I doing the same job and we're not paid the same amount of money. It's a much more complex issue than that which is that systemically, women don't have access to the jobs that have higher pay. Now, we've done very serious work last year with McKinsey and we looked across the companies, who was doing the best. What we found, interestingly, was that people who had very good policies, it made no difference. What made a lot of difference was whether flexible work arrangements were built into the way people were working, what made a huge difference, a huge difference was leadership and particularly, people like Andrew McKenzie last year, who said, "I'm actually going to sometimes leave work early because I want to do things with my family and I'm going to make a call at one o’clock in the morning". That whole kind of role modelling stuff. The business case being super, super clear. The whole way the recruitment was done, making sure that job descriptions were not kind of biased, if you will. Those sorts of things, we found, that the really successful companies, who had actually gotten more women into leadership positions, and done really practical things but particularly the one thing that made an enormous difference, was flexible working arrangements and, of course, when women had children, keeping them attached to the workforce, inviting them to come to training programs, keeping them in touch, and then accelerating their capacity to be promoted when they return to work. Very practical things. We need that to happen at scale, not just in large companies but across the whole economy.

Elysse: Jennifer Westacott, thank you so much for joining us.

Jennifer: You're welcome. Thank you.

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