How to close the gender pay gap in health care

Coming up to the UN’s International Equal Pay Day on 18 September, Australian women working in the healthcare sector still earn on average around $18,000 less than men each year. Employers must put action behind the rhetoric on equal pay and close this huge gap.

Women comprise around 76% of the Australian healthcare workforce, yet they are still earning much less than men working in the same sector.¹

While equal pay has been a right since 1969, many women who are performing the same work as men are often missing out on the extra dollars paid to their male colleagues. It is a little-known fact that health care is one of three Australian industries with the highest gender pay gaps — despite females making up the majority of the workforce.²

For example, females make up the majority of people employed as registered nurses (88%) and aged and disabled carers (77%), but they earn much less than males in the same roles.

The median weekly income for full-time male registered nurses in 2021 was $1802, compared to $1631 for females. For aged and disabled carers, the median weekly income for full-time males was $1254 and $1114 for females.³ Yet around 83% of the aged care residential services workforce in Australia is female.⁴

Across the healthcare workforce more generally, average male weekly total cash earnings per week were $2012 in May 2021 — well above $1670 for women — the most recent data from the Australian Bureau of Statistics (ABS) indicates.⁵ That represents a difference of $340/week, or almost $18,000 a year. That is an entirely unacceptable gap and legislation needs to be strengthened to reduce it in healthcare organisations.

The gender wage gap reflects long-held biases and inequality in workplace cultures and recruitment practices, which need to be removed from remuneration processes, even if employers are forced to act by governments. If they don’t already, all healthcare employers, large and small, should start with a pay audit and publish the results to employees and the public more generally.

Pay transparency enables organisations to identify and address gender pay gaps. A pay audit can also deliver valuable information to women that can be used in their negotiations for fair and equal pay with men.

Employers may also need to re-examine payment rates carefully. Many women work part-time, so the choice of full-time, part-time or casual employment shouldn’t affect the rate of pay women get. Yet casual workers, most of whom are women, are often penalised with lower payment rates or reduced benefits, which contributes to the gender payment gap. Such discrimination needs to be removed from remuneration processes.

Existing laws don’t go far enough either. Currently, only employers with more than 500 employees must have a policy or strategy in certain areas to support gender equality. Employers must have policies or strategies in place to support one or more of the following indicators:

• Gender composition of the workforce
• Equal remuneration between women and men
• Flexible working arrangements
• Sex-based harassment and discrimination.
   

This is not strict enough to drive change in Australian workplaces and does not require any employer to demonstrate what progress they have made. The Workplace Gender Equality Act 2012 separately requires Commonwealth public sector employers that employ 100 or more employees in total to register for the Public Sector Reporting program and submit data annually.

However, these laws do not apply to smaller employers. Minimum standards need to be strengthened to apply to all employers of women working in health care as a mechanism for accelerating the rate of change towards gender equality. Employers should be mandated by government to create timelines to redress pay gaps, setting out clear and measurable goals against which organisations can measure themselves.

Public policy too should support healthcare organisations to close the gap by providing concrete ‘how-to’ guides to achieve greater equality. Proactive communication about the eliminating the gender pay gap is important to achieving equality of opportunity for all. Apart from pay, there are several other employment conditions women may value, such as greater flexibility in working hours and working from home (WFH) options, which enable women to better balance their working and domestic lives.

There is some good news on the gender wages gap in Australia more generally. It is closing, with female wages growing faster than male wages as full-time jobs growth in female-dominated industries such as health care outstrips jobs growth for men. According to data from the ABS, full-time adult average weekly total earnings for women jumped 4.6% over the year to May 2023, well above growth in male average weekly earnings of 3.6%, helping to narrow the national gender pay gap to the lowest level on record in May 2023 to 13%. So, as a nation, we are moving in the right direction.

Organisations that take action to improve workplace gender equality now stand to benefit from equalising pay; policies and strategies they implement help to improve recruitment, and better working conditions for women could help improve retention of female workers and boost productivity. Gender bias plays a big role in how we pay men and women, so challenging these processes is very important as the UN reminds us.

*For the past nine years, Kris Grant has been leading ASPL Group as CEO, overseeing its management consulting, training and recruitment divisions to deliver major transformational projects, strategic leadership training, and personnel resourcing to improve business functions and increase productivity across Australian workplaces. Kris developed a passion for ensuring organisations have an inclusive workforce when she reached C-level position in her 30s and realised there was a gap, and still is, for the number of women in senior leadership positions and wanted to make change to ensure organisations prioritise inclusion and diversity in workforces.

<sup>1. https://oia.pmc.gov.au/sites/default/files/posts/2023/02/Impact%20Analysis%20-%20WGEA.pdf
2. https://oia.pmc.gov.au/sites/default/files/posts/2023/02/Impact%20Analysis%20-%20WGEA.pdf
3. https://www.abs.gov.au/media-centre/media-releases/caring-nation-15-cent-australias-workforce-health-care-and-social-assistance-industry
4. https://agedcare.royalcommission.gov.au/system/files/2020-06/CTH.0001.7300.0314.pdf
5. Australian Bureau of Statistics, Employee Earnings and Hours, Australia May 2021</sup>

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