why does pay equity matter?
Fair Compensation
For starters, society has progressed to the point where it is only fair that pay equity becomes a staple in Australian and New Zealand organisations. The stereotypical roles that men and women used to play in the home and at the office no longer apply across the board, and business’ payroll practices are the next area that need to change to keep up with this social progression.
Organisation benefits
Having a pay equity strategy has been proven to actually have a number of hugely beneficial effects on organisations, such as a healthy company culture – organisations that implement transparent and fair pay systems send a positive message about their values. Employees are not only looking for the right job, but also for a company that displays a good foundation of values toward social issues. This kind of Corporate Social Responsibility (CSR) is also increasingly important in the eyes of stakeholders and potential clients.
PRODUCTIVITY & PROFITABILITY
Pay equity can also improve the profitability of your organisation. According to research from the Australian Bureau of Statistics, a 10% reduction in gender pay inequality could boost labour productivity by up to 3%. This is due in part to the idea that employees who know they have an equal playing field are more likely to maximise their productivity and effort in order to excel. It’s also due to reduced turnover from dissatisfied or undervalued employees, as well as increased commitment and diversity. In companies with such policies in place, employees become brand advocates and promote your business for free – easy marketing!
SOCIETAL IMPACT
Pay equity benefits not only your business, but also the economy as a whole – people are incentivised to enter and remain in paid work. Women in particular will therefore have greater financial independence and increased personal capital.
How does pay equity help Australia and New Zealand's economies?
more opportunities for women increases New Zealand's GDP
Pay equity can seem like a costly expense for a business – management is being asked to shell out significantly more compensation to many of its employees, and what for? What tangible benefits will the organisation actually see?
In 2017, research from Westpac and Deloitte brought the idea that New Zealand had the opportunity to grow its economy by NZ$881 million by having better gender parity in business. That’s equivalent to a 0.33% increase in GDP, or a 1.5% profitability boost for business. That parity, meaning businesses have a more even spread of genders, is directly correlated with pay equity – only 29% of managers in NZ are women, but we can encourage more women to take management roles by offering them the same salary as their male counterparts.
Westpac NZ Chief Executive David McLean claims that the research clearly shows the benefits of having women in decision-making business roles. “I’d argue gender parity is a common-sense priority for businesses wanting to boost the diversity of thought, experience and skills in their organisation. All these things lead to better business performance.”
So what about in 2026? Well, Westpac released a follow up report in July 2026 and the claim jumped from $881 million dollars to $10 billion if there were less barriers for women-led businesses.
“The report cites the fact that in 2024, female-owned firms received less than 3% of total venture capital available in New Zealand,” Ms Feaunati says.
more opportunities for women increases Australia's GDP
History has shown that an individual’s work effort is closely related to their wage. Therefore, in theory, the gender pay gap discourages women from exerting maximum effort in their job – this is because they’re undervalued and there is less opportunity for them to reach their full potential in a higher-level role. Pay inequity has also historically resulted in a decline in female labour participation (there is understandably less incentive to remain at a company when pay systems aren’t set up in your favour), which consequently lowers real GDP per capita.
Research from the University of Canberra, Australia, finds that eliminating the gender wage gap would boost long-term labour productivity by 5.7% and contribute an additional AU$93 billion to the economy. This is due in large part to two things:
- Companies have an easier time attracting and retaining talent when they have pay equity policies in place because employees are attracted by an employer’s commitment to progressive societal causes.
- Having an equal playing field incentivises women to maximise their effort in the workplace because they’re being fairly rewarded for their work, thereby boosting productivity
3 ways pay equity benefits your business
There are a number of tangible benefits (both on an individual business basis and for the economy as a whole) to improving pay equity throughout Australia and New Zealand. These include:
- An increase in overall GDP
- Boosted productivity
- Less resource spent on attracting/retaining talent
How can companies work towards pay equity?
The first step to pay equity is by determining what your business’ current pay equity and HR policies or practices are through a comprehensive pay equity analysis – this is a workforce analytics solution that involves evaluating remuneration data and other variables to determine whether or not a business is practising pay equity.
What is pay equity analysis?
Falling under the category of HR Analytics, pay equity analyses are recommended when remuneration data doesn’t have the depth or number of variables necessary to give a rounded picture of the gendered salary ratio.
The first step to a pay equity analysis is to determine how your business records, reports and uses HR data – this will determine the exact level of analysis needed and the approach you’ll want to take.
Once the goals of the analysis have been outlined, you’ll be able to determine what data you have and what extra data you need. In most cases, salary information from HR will not be enough to give the full picture. For example, remuneration data will often suggest that men are paid more than women overall, but this can sometimes be explained by men and women occupying different roles within the business (men tending to have higher paying job functions than women).
Pay equity analysis involves regression modelling, a technique that adds multiple variables into the analysis in order to offer the most rounded picture of the situation. Using the insights from the analysis, you’ll have a much clearer idea of what your pay equity practices are – from there, it will be easier to determine:
- What the drivers are (if any) behind inequity
- What kind of HR information you’ll need to collect going forward
- Where you’ll need to focus improvement efforts
- Whether your organisation would benefit from a gender parity policy
HOW DATAMINE CAN HELP YOU ACHIEVE PAY EQUITY
In order to determine whether or not your business is compensating everyone fairly for equal work, you’ll need to dive into your HR data. Pay equity analysis is a type of analytics that uses multiple variables to give organisations a clearer view of the drivers behind gender inequality.
Doing a pay equity analysis will allow you to determine any pay inequity, what kind of HR information you’ll need to collect and where you’ll need to focus improvement efforts going forward. The world is moving closer to a future in which pay equity is the norm – download the Datamine Guide to Workforce Optimisation to learn how to start that movement in your organisation.
