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HR Connect New Zealand – Volume 3, Issue 2, 2014

Exploring the issue of Gender Pay Inequity in New Zealand organisations

In the previous edition of HR Connect, we touched briefly on the topic of gender pay inequity in our article Managing Employee Engagement in times of change. Understanding the importance of this issue, we now take the time to delve into it more in-depth. Drawing on data from our recent Aon Hewitt General Industry Remuneration Report September 2013 – we explore the findings and ask ‘Where to next?’ How can New Zealand tackle this very real issue – one that is political, emotive and, given the evidence to support the benefits of equal gender representation in the workforce, simply practical.

Taking the broadest possible look across the market, Aon Hewitt’s 2013 research reveals that men are paid 44% more than women, when base salary, bonuses and commissions are taken into account.¹

Some of the widely cited explanations for gender pay inequity such as underrepresentation of women in senior roles and role choice are certainly factors in the whole issue, yet they form only part of the story when it comes to understanding the reasons behind the issue and its potential solutions. While the prevalence of men at more senior levels of the organisation is well established, Aon Hewitt’s research shows that pay inequity is driven by more than just higher representation of men at more senior levels. There is in fact a genuine pay gap at every career level – that is, across the market, women are paid less than men at the same organisational level.²

In summary

• Women are paid less than men at the same organisational level,
• Women are paid less than men in the same roles, yet
• Relative performance of men and women is the same.

Where to next?

The issue of gender pay equity is complex and it is critical for organisations to understand the full range of factors. We recommend that organisations seek to understand the pay differentials from as many different perspectives as possible.

1. Understand the data – what are the gender differences in fixed remuneration, incentive and commission payments? Is there a consistent pattern across job families, seniority levels or geographies?
2. Assess the causes – what roles do female representation, tenure and career breaks play in the differentials? Is performance appropriately assessed? Does your reward structure accommodate flexible working adequately? Finally, it is important that structured calibration and reporting practices are embedded to minimise the risk of unconscious bias in remuneration decisions.
3. Look beyond your organisation – do your internal pay rates align to the external market data? Is there an inherent gender-bias within the market data of your industry?

Each and every day organisations are coming to recognise the competitive advantage that having a diverse and inclusive workforce brings. If not already a critical priority, then gender equality in the workplace must be the obvious starting place in creating an organisational culture that values and utilises diversity to deliver organisational performance.

For more information or to discuss organisational culture further, contact Jocelyn Anso on +64 9 362 9296 or email [email protected]

1 Aon Hewitt’s New Zealand General Industry Remuneration Report ‘The Source’ contains 23,286 lines of survey data from over 124 organisations in most industry sectors.
2 Aon Hewitt’s New Zealand General Industry Remuneration Report ‘The Source’ contains 23,286 lines of survey data from over 124 organisations in most industry sectors.

 

 

Four things that Top Companies for Leaders do differently

Various studies over the years have highlighted the challenges organisations face in building the leadership depth they need to successfully deliver on strategic objectives. Companies often cite the lack of return on investment (ROI) they receive on their leadership development activities as cause, however our global research and work with clients suggests otherwise.

Organisations who have been awarded Aon Hewitt Top Company for Leaders status achieve on average, 9% higher total shareholder returns than their industry peers. These are the companies that have an intense focus on talent and invest effectively in leadership development at all levels. This creates a strong pipeline of leaders who champion the company’s cause and drive results. Our research also shows that an increase of 10% in attracting and retaining their best performers adds approximately $70 to $160 million to a company’s bottom line.¹

So what are the best organisations doing to develop their leaders now and in the future?

In the most recent Top Companies for Leaders study undertaken in 2011, we were delighted to recognise Refining New Zealand, Coca-Cola Amatil and Commonwealth Bank of Australia in our regional awards. The study highlighted four key trends that distinguish what the winners and other leading organisations are doing differently from the rest:

• These companies have a clear leadership brand. This is embodied by their existing senior leaders who promote the organisation externally and personally support the development of those below them
• They apply more rigour at the attraction stage, making clear investment decisions and utilising a more thorough range of assessment methods to select only the best suited candidates
• They invest more in individualised and targeted development programs, rather than looking for a one size fits all solution. Aligned to this they are more likely to build succession plans earlier, deeper, and broader than others
• They measure and monitor the effectiveness of their programs thoroughly and will update them in line with business strategy changes more effectively than others.

If your organisation is looking to gain valuable insights into how to improve your current leadership capabilities, examine the link between leadership practices and financial results, and develop a strong pipeline of talented leaders, register for the Aon Hewitt Top Companies for Leaders 2014 study before 30th April to participate.

Since its inception in 2001 more than 2,000 organisations worldwide have participated in the study, making it the most comprehensive global research on leadership development. The study highlights trends in the identification, selection, development and reward of leaders.

For further information on participation requirements, the different categories of recognition, or to understand how Aon Hewitt can assist with any of your leadership practices, contact Jocelyn Anso on +64 9 362 9296 or email [email protected] 

1 Aon Hewitt Top Companies for Leaders Survey Highlights 2011

 

 

Help your employees grow their wealth in 2014

A new year inevitably brings about new beginnings, new goals and sometimes, new concerns. Now is the time to start educating your employees on how they can grow their wealth and fast-track towards their financial goals.

Many organisations already offer financial education and wellbeing services to their employees. In fact, findings from Aon Hewitt's 2013 Best Employers support the idea that the provision of financial wellbeing programs contributes to high employee engagement scores within organisations. Of the 19 organisations accredited as 2013 Best Employers:

1. 76% provided their employees with access to a financial planner
2. 29% provided mortgage advice to their employees
3. 59% provided retirement planning support for their employees
4. 65% held investment and financial education seminars to benefit their employees.

Providing financial education resources can help your employees maximise their financial position and increase the perceived value of their total rewards package. Using KiwiSaver as an example, here are a few tips to get you thinking about how you can educate your employees to help them reach their financial goals faster.

Ensure your employees understand their KiwiSaver choices and where and how their money is invested – Around 40% of new KiwiSaver members are automatically enrolled with a default provider and have not actively made a scheme choice of their own. Educating employees that being an active member of KiwiSaver and researching scheme providers will ensure they understand where their money is going and what types of investment choices are available to them. Reflecting on what type of ‘investor’ they are e.g. high risk or low risk will further help them. Help employees understand that anyone not invested in the fund that works best for them might lose out on a satisfying investment future and potentially additional investment earnings over time.

Ensure your employees know how their contributions stack up – Understanding just how member contributions and employer contributions stack up is an excellent incentive to get on-board KiwiSaver and stay on-board. While, like any investment, KiwiSaver carries its risks – given crown and employer contributions, KiwiSaver is an investment choice everyone should consider as the ability to accumulate funds over time is very important.

Ensure your employees can maximise the benefits of belonging to KiwiSaver – These include the $1000 kick start, a tax credit (up to $521.43) per annum, employer contributions and first home subsidies. Are your employees informed of these?

Presently, more than half of the 2.15 million members in KiwiSaver are either not contributing or saving enough to receive their member tax credit of $521.43. Of those, many may need to only increase their contributions by a small amount to become eligible for this maximum and in the meantime are unnecessarily missing out on free money!

To find out more about how you can give your employees access to financial education resources, please contact Amanda Beeslaar on +64 9 362 9184 or email [email protected]

 

 

Is your organisation reaping the benefits of a corporate health plan?

In times of need, private health insurance can really make a difference to your employees and their families. When facing medical uncertainty, there's little more valuable than being able to get immediate access to treatment and avoid lengthy waiting times. Corporate health plans are company endorsed private health insurance plans that can have a unique benefit and/or pricing structure. Ideally in our world of “Flex Benefits” these are part subsidised by an employer or with employee paid voluntary top up (paid for by the employee) and they will form part of your employee value proposition.

Aon Hewitt's recent Employee Insured Benefits Survey confirmed that corporate health plans are one of the most popular employee benefits. While voluntary health plans are endorsed, but not funded, by the organisation, they will usually have advantages for your employees over a standard retail offering.

The Employee Insured Benefits Survey revealed that: 38% of employers surveyed pay the total cost of an employee's private health insurance through their corporate plan while 40% of employers surveyed partially subsidise cover.

Based on these statistics many employers simply do not consider medical insurance when thinking of employee benefits for staff and their families. This is a missed opportunity because, as well as benefitting employees, a corporate health plan can have positive implications for your business.

Findings from the Employee Insured Benefits Survey support the idea that private health insurance forms a valuable part of the employee value proposition and contributes to the attraction and retention of employees. A corporate health plan can also help drive other healthy initiatives within your organisation, with major insurers also offering wellness programs.

Aon Hewitt New Zealand arranges corporate health plans for clients that offer a significant discount over the retail alternative, and critically can also provide cover for qualifying pre-existing conditions for staff and family members.

At Aon we strongly believe in a holistic approach to benefits, understanding your business strategies and staffing issues and responding with the best and most tax effective outcome for all. We can help you review, assess, select and promote your corporate health plan to ensure it delivers value.

For more information, please contact Peter Harland on +64 9 362 9127 or email [email protected]