The first comprehensive research into pay gap reporting in Aotearoa New Zealand challenges the common belief that mandatory reporting would be a financial burden for businesses and outlines a raft of benefits of undertaking this work.
"We hear that the main roadblock to mandatory pay gap reporting is adding additional compliance costs to businesses. This report shows that for most businesses the cost is less than 10 hours of staff time, and 80 per cent of businesses reported no external costs," said STILL Minding the Gap Co-Founder Jo Cribb, who commissioned the report.
Even more importantly for New Zealand businesses, the research found organisations that reported their pay gaps experienced a range of benefits:
The research found that a 25 per cent reduction in the gender pay gap could unlock more than $18.2 billion in increased productivity and retention – matching the direct GDP contribution of New Zealand's tourism sector.
Te Uru Tāngata Centre for Workplace Inclusion Chief Executive Maretha Smit says an economy grows when it makes better use of its human capital.
"The productivity gains associated with a narrower gender pay gap come from better utilisation of women's skills, stronger labour-force participation, improved career progression, and more people contributing where they create the greatest value.
"Pay gap reporting provides organisations with a useful signal about whether those opportunities are being realised."
The report was prepared by BERL with funding from the Clare Foundation and surveyed 319 New Zealand businesses across a variety of industries.
"For the first time, we have proof across the country that there are major benefits and very minimal costs to reporting on pay gaps,” Jo Cribb says.
“That sends a clear message that pay gap reporting isn't just good for fairness – it's good for business and good for New Zealand's economy."
"With costs this low and economic returns this high, paying attention to pay gaps is smart business. It's time to make pay gap reporting mandatory.”
The report showed 50 per cent of firms reported making salary adjustments after calculating their pay gaps, with the lowest-paid women workers seeing the most benefit.