Mandatory Gender Pay Gap reporting

The quick answer is that 8.6% is only an estimate! So, whilst the New Zealand pay gap figures look relatively good on paper, we don’t actually know for sure what the ‘true’ figures are.

Stats NZ uses the Household Labour Force Survey to conduct its analysis - a sample survey that does not interview every person in New Zealand. The Mind the Gap campaign goes some way to addressing this, with more than 100 companies, including PwC New Zealand, reporting their pay gaps. However, the data and methodology chosen is at the discretion of the company which makes it difficult to calculate the actual New Zealand gender pay gap or compare companies on a ‘like for like’ basis. Different methodologies also add to the complexity of seeing what, if any, meaningful activities companies are undertaking to address existing pay gaps with a view to their elimination over time. 

It is likely that those companies that volunteer to disclose their gender pay gap are proactively taking steps to address inequity and so are ahead of the curve. Spark stated in their 2023 Annual Report their ambition to achieve 40:40:20 representation (aligned to the Champions of Change initiative) “Spark wide” by the end of FY24 (i.e. 40% men, 40% women and 20% of any gender) and to reduce their median gender pay gap by 10% from FY20 to 18% by the end of FY25. Interestingly, Spark’s CEO is female, and research conducted on Bloomberg’s Gender Equality Index 2023 revealed that companies with female CEOs tend to be more likely to conduct a review to understand the extent of their gender pay gap.  

It is generally accepted that gender pay gap reporting, equal pay audits and other pay transparency policies help advance gender equality in the workplace, as these measures present up-to-date information on a company’s gender pay gap, encourage employers to offer equal pay for work of equal value and identify systemic focus areas to address. 

It is also clear that whether in a ‘buyer’ or ‘purchaser’ market, attraction and retention tactics are key. The ability to show that you are a diverse company, that you value all employees equally and are proactively addressing the root causes of any pay gap and/or pay inequity is extremely powerful and fundamental in remaining competitive and successful in the marketplace. It is also an intrinsic part of a company’s overall Employee Value Proposition (EVP) which future generations, especially, will expect from their employers. 

The New Zealand Government’s commitment should compel companies to take a proactive approach to assessing their current pay gap, and to move beyond reportable numbers to understand the underlying inequalities that contribute to these gaps - especially given the government’s comment in its announcement that a review will take place in three years’ time which will likely make the now voluntary remediation action plans mandatory. This will allow the government, customers, stakeholders, and workforce to see how a company measures up against its peers and whether they are actively addressing the gap and adopting policies and practices that create a sustainable future.

While the specifics of the reporting requirements (i.e. data, methodology, breakdown etc.) have yet to be announced, companies need to consider what actions they can take now to assist with their own state of readiness.  Because if you don’t, you risk being left behind!

Looking at the global landscape, it is obvious that pay gap reporting is only the tip of the iceberg. New Zealand companies need to ensure that they appropriately prepare not only for the announced mandatory requirements and the transparency that will provide to the market/stakeholders, but for those that we expect to see in the not-so-distant future.