Gender pay gap in New Zealand is 18%, says consultancy

26 July 2020 2 min. read

According to analysis by remuneration and performance management consultancy Strategic Pay, the pay gap in New Zealand is nearly double of what is reflected in official figures.

In a report the Auckland-based consultancy released, the authors argue that the gender pay gap estimate of just over 9% from the official body Stats NZ is too optimistic, arguing that the metrics used to arrive at the figure were limited. Stats NZ used the median pay per hour of 25,000 workers (both men and women) to calculate the figure.

StrategicPay has conducted a broader assessment, not only expanding the sample size by several times, but also widening the criteria used to measure the pay gap. “Using base pay may be a useful starting point, and it sheds some light on the gender pay gap, but our analysis allows us to turn a brighter spotlight on the issue,” said StrategicPay CEO John McGill.

The firm used a sample of nearly 190,000 employees across more than 900 organisations in New Zealand, taking into account KiwiSaver contributions, bonuses and car payments to calculate the pay gap. The resultant figure is a gap of just under 18%, with discrepancies across all criteria.

Gender pay gap in New Zealand is 18%, says consultancy

Men receive higher contributions to their KiwiSaver superannuation funds, and also draw more in incentives and drive higher value vehicles. McGill points out that this might reflect the structure of the workforce, with men dominating the higher-level roles that usually come with cushy bonus packages and vehicles. 

“It is less clear why females at all levels receive less in KiwiSaver than their male counterparts. This could be because KiwiSaver is a payment based on a percentage of base pay, or it could be because men have negotiated higher contributions from their employers,” said McGill.

To make matters worse, women have been amongst the worst affected by Covid-19 and the resultant job cuts, primarily because female participation is concentrated around roles that require a high degree of social interaction. As the crisis worsens, McGill fears that gender pay parity is only likely to fall down the list of priorities, as businesses focus on survival.

At the same time, he highlights how the rebuilding phase is an opportunity to tackle this problem at a structural level. No doubt, female participation in the country has been on the rise in recent years, with growing representation at the board level. A more equitable workforce has tremendous economic benefits, although closing the pay gap is crucial to ensuring that these benefits are realised.