Q&A: South African Reward Association - JSE MAGAZINE

Q&A: South African Reward Association

Lindiwe Sebesho, exco member of the South African Reward Association, on the reasons why women still earn less than men, and what they should know to help address gender wage disparity

Q&A: South African Reward Association

Q: Is the gender pay gap a myth?
A: No, it is a reality as illustrated by various research papers, including the ILO Global Wage 2018/19 report, which indicates that women continue to be paid 28% less than men for the same job. The global wage report surveyed 70 countries and 80% of waged employees, revealing SA as one of the countries with the highest wage inequality. As said in the report, gender pay gaps are one of the greatest social injustices of our time and remain a significant obstacle to ensuring a better and more sustainable future for all, especially if we want to succeed in achieving the UN 2030 Agenda.

Q: Why does it matter and who is to blame?
A: It certainly matters to women and to companies that appreciate the proven benefits of having a diverse and inclusive workforce. It is also important for women to be recognised for their competencies on a fair and balanced scale.

SA’s history and legacy of exclusionary policies have contributed significantly to the nation’s high wage inequality. However, the right to fair remuneration is now enshrined in the ‘equal pay for work of equal value’ provisions of the Employment Equity Act. Employers are therefore legislatively and morally responsible for ensuring that gender-based wage gaps are addressed through appropriate company policies.

This is why an organisation such as the South African Reward Association is invaluable because it promotes sound remuneration practices by setting minimum standards, providing training and development opportunities, and awarding professional status to eligible professionals, thus helping member organisations with their efforts towards fair remuneration practices.

Q: What are the discriminations that account for wage disparity?
A: One of the reasons often cited for the persistent gender wage gap include social and labour market distortions that limit women’s career options by under-valuing their ability to contribute effectively in male-dominated occupations. Another reason is that there are limited opportunities for women to advance to core strategic, high-earning roles, despite their higher levels of education. Where such opportunities exist, women tend to either occupy support function roles or lead struggling organisations that do not always pay high salaries.

What also comes into play is that the responsibility to raise families still lies predominately with women, which translates into their needing to either put their careers on hold, or have extended periods of leave to be the caregivers for children.

Q: In current times, why are there still gender wage disparities in SA?
A: SA’s efforts to address the factors that result in gender wage disparities have not been effective. There is also limited shareholder and board activism, which, if elevated, would ensure corporates are held accountable for full and meaningful compliance to the provisions of the Employment Equity Act.

Transparency and reporting of wage gaps is also inadequate especially as the act itself does not require companies to report all elements of pay in detail, for example, performance-based incentives, which usually form a big part of executive pay. We also have to factor the country’s high unemployment rate, which results in many women’s career choices being restricted to accepting or remaining in jobs that do not always help them unleash their full potential.

The requirements for growth are not always easily achievable for women, meaning that they may need to switch companies in order to advance their careers at faster rates.

Q: Why don’t women just choose higher-paying careers?
A: More and more women are actually selecting academic studies and pursuing careers in traditionally male-dominated, high-income sectors. Despite this, women still earn lower wages than men for the same occupational categories. This means that the wage-related returns women get for their education are lower than those realised by men. We can’t always expect women to find these roles easily either, especially in physically demanding careers, for no matter how competent a woman may be, it’s a fact that men are viewed as physically stronger.

Q: What are the pay practices women should be aware of?
A: Most companies have pay policies that enable them to compete for top talent by paying at the median of the industry or market they operate in. Pay policies are generally adjusted accordingly based on talent supply and demand patterns.

For example, where there is a high supply of skills, knowledge and experience, a company may pay below the relevant market median. Many companies also adopt ‘earn your pay through exceptional performance’ practices to encourage the discretionary effort required to achieve stretch business outcomes. Accordingly, short- and long-term incentives are used to reward exceptional contribution and results, substantiated through integrated performance management systems.

It is therefore important that women understand all the elements of pay – in other words, basic pay, benefits and incentive schemes, as well as how a company’s performance management system works. And when possible, women should challenge unfair pay practices or, at least, highlight them.

Q: Does this wage disparity change with age and experience?
A: Not necessarily. The ILO Wage Gap report mentioned earlier dispels the myth that human capital characteristics such as age, experience and education can be substantially used to explain the gender wage gap. It focuses particularly on education and finds that ‘on average, education and other labour market attributes explain relatively little of the gender pay gap at different points of the wage distribution’. This is particularly significant since the educational attainment of women is, in many instances, higher than men but they still tend to earn less than men.

Wage penalties persist right through a woman’s career lifespan, particularly during maternity, whereas fatherhood is often associated with a wage premium.

Q: What measures can women take against wage discrimination?
A: It is important for women in SA to know that their right to fair remuneration is legally enshrined in the Employment Equity Act, which provides the basis for women to earn and/or demand the same remuneration as males who perform similar work.

As the South African Reward Association, we encourage women to improve their understanding of remuneration issues through a number of channels. Firstly they should research and understand skills-demand patterns and the value of the jobs they are interested in so that they can make the right educational and career choices early on. Understanding salary package structures is crucial, taking into account all elements. In other words, basic pay, benefits and short- and long-term incentive offerings. If women are result- rather than activity-driven, they will be better able to illustrate the contribution they make towards the success of their teams and companies.

Women must also consider tracking, evidencing and communicating business value, adding to this their performance achievements. Using these personal performance statistics is important as a reference for negotiating for fair remuneration. This also helps overcome the tendency by women to assume that ‘someone more senior’ will acknowledge their hard work, or to wait to prove themselves before negotiating for more pay.

Q: Should there be more transparency in wage comparisons to highlight the issue?
A: Absolutely. Despite progressive labour legislation in SA, many companies still do not share their pay policies in a simple and understandable manner with their employees. Transparency does not mean that companies should share confidential employee salary information, especially as this may lead to unintended consequences. It could, however, include communicating pay grades and ranges to indicate the value of jobs at different levels and the performance expected in those jobs.

This also gives other women an opportunity to negotiate fair and equitable wages when applying for jobs, or when seeking to grow through promotion within an organisation.

Q: How does maternity impact wage levels?
A: Maternity leave and other forms of time taken to raise children contributes to the gender wage gap, as women are considered less available to work and therefore cannot produce results at the same level or capacity as men. This misconception results in women of child-bearing age being overlooked for opportunities that could advance their careers and earnings. It is therefore important for companies that are serious about diversity and inclusion to drive and value the output/results that their employees achieve and not purely base performance on their employees’ physical ‘office presence’.

Generally speaking, the work ethic of many women proves their capability to deliver exceptional results even when they are not physically at work.

Q: Are there any post-maternity income changes?
A: There could be changes based on the provisions of a company’s maternity leave policy. Some companies allow women to take longer maternity leave at reduced or no pay. This might result in women missing out on the benefits of full pay, getting a lower annual increment and, in some instances, not being considered for full year performance-based incentives, or even being overlooked for promotion.

Although many countries, including SA, also offer paternity leave, the duration of such leave is usually less than provided and therefore taken by women, which means that men are unlikely to suffer the same ‘absence’ consequences as women.

By Kerry Dimmer
Image: Haleema Rawoot