The public service has a much smaller gender pay gap than the private sector. It’s a big achievement

After two years of publishing the gender pay gaps of Australia’s private-sector companies, the Workplace Gender Equality Agency has released public-sector employer data for the first time.

The report^[1] shows a stark contrast between the private and public sectors. The Commonwealth public sector has a gender pay gap of 6.4%, far less than the equivalent gap of 21.1% in the private sector.

The agency attributes a big part of the “substantially better” outcome in the public sector to the achievement of gender balance at managerial and board levels.

Women’s representation in senior and governance roles doesn’t just narrow the pay gap at the top. It can also change workplace cultures and embed more gender-equitable practices that ripple through to all occupational levels.

The agency says public-sector employers have achieved this outcome by “long-term and deliberate actions that address gender equality”. These include conducting a gender pay gap analysis and formulating a gender-equality strategy.

The public sector’s results also illustrate the power of setting targets. The Australian government has set – and now achieved – targets^[2] for women to hold 50% of all Australian government board positions.

Who’s performing well?

Of the 120 public-sector employers in the Workplace Gender Equality Agency’s dataset, 55 have a gender pay gap that falls into the target range of between –5% and +5%.

Several have a gender pay gap in total remuneration at or very close to zero. These include the Department of the Prime Minister and Cabinet, Department of Treasury, Department of Social Services and the Office of the Fair Work Ombudsman.

A handful have a slight positive gender pay gap in favour of women, including the Productivity Commission.

Where is there room for improvement?

To support greater transparency, the Workplace Gender Equality Agency has published a searchable database^[3] of Commonwealth public sector employers. This is broken down by each department and agency.

The largest gender gaps in median total remuneration are reported by the National Offshore Petroleum Safety and Environmental Management Authority (50.4%) and Coal Mining Industry Corporation (31.7%).

Closer to the middle of the pack, the Australian Federal Police reports a gender pay gap of 12.2%. The Reserve Bank of Australia has a gap of 11.5%, and Australia Post 8.6%.

The data does not include elected officials such as members of parliament.

All up, half of Commonwealth public-sector employers have a gender pay gap larger than 5%, which the agency deems the acceptable maximum.

But this is still a better performance than in the private sector, where 60% of companies exceeded the 5% threshold.

Read more: Women's annual salaries are narrowing the gap. But men still out-earn women by an average $547 a week^[4]

How much less are women earning?

Women working in Australia’s public sector earn on average A$8,200 less per year than their male colleagues.

The data cover both the Australian Public Service (APS) (which is directly responsible for the delivery of government services) and non-APS organisations (which deliver services on behalf of the government).

Within the APS workforce, men’s average total remuneration of $128,503 compares to women’s $121,146. This equates to a 5.7% gap.

In public-sector agencies outside the APS, this gender pay gap widens to 8.8%. Men’s average salary of $127,354 compares to women’s $116,157.

Read more: Women's annual salaries are narrowing the gap. But men still out-earn women by an average $547 a week^[5]

In agencies outside the APS, more of this gender gap – 5.6 percentage points – is due to men being paid more in bonuses, overtime and superannuation. Within the APS, these above-base payments contribute only 1.1 percentage points to the overall gap.

The role of discretionary above-base payments in widening the gap in total remuneration is similar to the dynamics of the private sector, where there is also greater scope for individual negotiation.

Research^[6] shows negotiation practices are laced with gender biases.

More standardised recruitment, promotion and wage-setting practices in the public sector, compared with private companies, mean there’s less scope for personal subjectivity and implicit biases^[8] in hiring, promotion and salary decisions.

Turning data into action

This is the first year the Commonwealth public sector’s performance on gender equality has been published at employer level. It follows changes to legislation^[9] in 2022 requiring public sector employers to report their gender equality indicators to WGEA from 2023, similar to the obligations of large private companies.

The point of publishing gender pay gaps is to spark awareness and motivate employer action.

Three in four public sector employers report they have taken action after conducting a gender pay gap analysis. Of these actions, one in four employers have corrected instances of unequal pay.

With a heightened awareness of the benefits of flexible work, almost all public-sector employers (96%) reported “flexible working is promoted throughout the organisation”.

But there is scope to improve the practical implementation of flexible work policies.

Only 56% of public-sector employers offer an online option for all team meetings. Only 43% provide support to managers to ensure performance evaluations are not unfairly biased against staff who work remotely or hybrid. And only 5% report that management positions can be designed as part-time.

With this greater transparency, there will be opportunity to monitor changes in future to look for ongoing improvements in gender-equality practices and outcomes.

It’s in the interests of fostering a more equitable, productive and effective public sector for all.

Read more: Working from home is producing economic benefits return-to-office rules would quash^[10]

References

1. ^{^} The report (www.wgea.gov.au)
2. ^{^} targets (www.pmc.gov.au)
3. ^{^} searchable database (www.wgea.gov.au)
4. ^{^} Women's annual salaries are narrowing the gap. But men still out-earn women by an average $547 a week (theconversation.com)
5. ^{^} Women's annual salaries are narrowing the gap. But men still out-earn women by an average $547 a week (theconversation.com)
6. ^{^} Research (hbr.org)
7. ^{^} Tint Media/Shutterstock (www.shutterstock.com)
8. ^{^} implicit biases (journals.sagepub.com)
9. ^{^} changes to legislation (www.wgea.gov.au)
10. ^{^} Working from home is producing economic benefits return-to-office rules would quash (theconversation.com)