Eliminating the parent penalty

Mothers who work part-time or partly from home can be disadvantaged simply by not being seen as much.

The gender pay gap is being talked about a lot lately, with statistics showing no improvement in the 12 per cent gap during the past decade.

Despite the recent landmark pay equity settlement for low-paid, mainly female care workers, Diversity Works NZ chief executive Bev Cassidy-Mackenzie says there is still much to be done by businesses to rectify the inequality. However, many employers might be unsure of just what practical steps they can take to make a positive impact.

"The first step is actually measuring the gender pay gap in your organisation," says Cassidy-McKenzie.

"Tracking the data can be as simple as setting up a spreadsheet and measuring the gap annually. Analyse the findings to identify where pay inequity lies, and if your data shows male and female remuneration is not in sync, commit to what you want to achieve and make the necessary salary or wage adjustments."

The next step is to tackle unconscious bias. "Train your HR staff and managers to understand unconscious bias and how to mitigate it," says Cassidy-McKenzie.

"Then actively support your female employees in their career development and encourage them to apply for higher paid senior positions and technical roles."

Given it is overwhelmingly women who take parental leave (99 per cent in the State sector), a key reason for women earning less than men is the financial benefits lost when taking time out of the workforce to raise children. Recent research by Statistics NZ has revealed a "motherhood penalty". While the overall gender pay gap sits at 12 per cent, when working mothers are compared with working fathers it increases to 17 per cent.

Cassidy-McKenzie is emphatic that parents should be included in salary reviews and given pay increases while on parental leave. "These employees contribute to organisational performance right up until they go on leave and their knowledge and skills are just as valuable when they return, so they shouldn't be penalised. It's also a signal that you value them and it helps them look favourably on returning to work at your organisation instead of somewhere else."

Parents can accrue annual leave while on parental leave because it is considered continuous service. But Cassidy-McKenzie says it's how much they will be paid for that annual leave that is the issue, because the rate is based on the employee's pay from the previous 12 months. "And of course, this can be considerably reduced depending on length of time and amount of pay received while away."

She says switched-on employers will recognise paying valuable employees their "regular" holiday rate in the 12 months following their return from parental leave is another great way to show them how much they're valued. "And it's the fair thing to do."

Cassidy-McKenzie recommends employers continue medical insurance and other financial benefits for parents on leave if possible, "especially medical insurance, which can be really valuable with a new baby and when reduced incomes make it challenging to pay the premiums."

She also suggests trying to continue paying KiwiSaver contributions, as a couple of gaps during a career can make a big difference to wealth at the end of a career. "Another idea is to roll up some benefits into a 'return to work incentive', paid when the employee returns from parental leave."

Parents on leave can be overlooked when learning and development opportunities arise, but Cassidy-McKenzie says including them in L&D makes them more valuable when they do return to work. "It also ensures staff on parental leave still feel like part of the team, helping to create an inclusive culture -- which research shows improves productivity and retention."

Mothers often prefer to work part-time or partly from home after having children, and this can mean being disadvantaged simply by not being seen as much. Cassidy-McKenzie says all employees should be treated fairly when salary reviews and bonuses are discussed.

"Create visibility around the key achievements of your remote-working staff." She also suggests scheduling social events and important team meetings at a time when everyone is available to attend, so part-time or remote staff are not "out of sight, out of mind".

Crucially, Cassidy-McKenzie says we will get more women in higher paying, senior roles when men take on more responsibility for childcare.

"Employers should be encouraging male employees to take parental leave to care for young babies, and sick leave to care for ill children, and ensuring this does not impact on their pay or promotion prospects. Senior men in the organisation can role model this behaviour by openly leaving early to pick up children from daycare or taking leave for school camp, so it's accepted as a normal part of working life for men and women."