The Australian Government’s latest gender pay gap report has laid bare an uncomfortable truth: progress in closing the gap remains painfully slow. With only a 0.2 per cent year-on-year improvement and three out of four employers still displaying a significant gap in favour of men, companies are racing to understand the issue and determine how to address it.
For large businesses, the upcoming Workplace Gender Equality Agency (WGEA) reporting deadline in May has put gender pay gaps in the spotlight. But for most small and medium-sized enterprises (SMEs) – those with fewer than 100 employees – reporting is not mandatory. This exemption, however, does not mean that gender equity isn’t relevant.
In fact, smaller businesses arguably have more to gain from getting it right.
While SMEs are not required to report gender pay gaps to the government, they still face expectations from employees, customers and investors. Gender equity isn’t just a compliance issue – it’s a business imperative. Research shows that diverse workplaces perform better, attract top talent, and foster stronger workplace cultures. For smaller businesses, where every hire has an outsized impact, ensuring fair hiring, pay and promotion practices is crucial to long-term success.
Unlike large corporations with dedicated HR teams, SMEs often lack structured policies on gender equity. This can lead to unconscious biases creeping into hiring and pay decisions, limiting opportunities for women and reinforcing disparities. Without intervention, these issues can become embedded in a company’s culture, making them harder to address as the business grows.
Practical steps for small businesses to advance gender equity
So, what can SMEs do to ensure they’re building equitable workplaces? Here are four key areas to focus on:
1. Fair hiring practices
One of the most effective ways to drive gender equity is through inclusive hiring. If certain roles in your business are dominated by one gender, it’s worth examining why. Are job ads unintentionally deterring female applicants? Are interview panels diverse?
Action to take: Review your hiring process to ensure it encourages a diverse applicant pool. Use gender-neutral language in job descriptions and consider structured interview questions to minimise bias.
2. Market drivers
Some disparities in pay arise from wider market realities. Salary rates vary according to supply and demand, and certain professions are significantly influenced by gender. For instance, the Australian Bureau of Statistics reports that 92% of pilots are male, whereas 77% of flight attendants are female.
Even if an airline hires fairly based on experience and merit, it will likely show a gender pay gap because of these structural industry imbalances. The key for companies is to determine their ‘market gender pay gap’ – the gap created by external market forces, and separate it from their ‘effective gender pay gap,’ which reflects internal biases.
Action to take: Calculate your market gender pay gap. If your effective gap is close to zero, your company may not need to take further action on this front.
3. Opportunities for Growth and Leadership
In many businesses, women remain underrepresented in leadership roles, not because of a lack of capability but due to limited opportunities for advancement.
Action to take: Identify high-potential female employees and provide them with leadership training, mentorship, or clear pathways for career progression.
4. Creating a Supportive Workplace Culture
Gender equity isn’t just about pay and promotions – it’s about fostering an inclusive workplace where all employees feel valued and supported. Flexible work arrangements, parental leave policies and clear anti-discrimination policies all contribute to a fairer workplace.
Action to take: Gather feedback from employees about workplace culture. Consider implementing family-friendly policies that help retain talented staff, particularly women returning from parental leave.
As expectations around workplace equity continue to rise, SMEs that take proactive steps now will be in a stronger position as they grow. While the WGEA reporting deadline doesn’t apply to smaller businesses, the push for gender equity does. The good news? SMEs have the agility to make meaningful changes faster than larger organisations bogged down by bureaucracy. By focusing on fair hiring, leadership opportunities and an inclusive culture, small businesses can drive real progress – without waiting for government mandates.
