Business and Economics

National Pay Equity Forum Spotlight on SMEs Hosted by economic Security4woman and the Office for Women

Dr Susan MaysonDepartment of ManagementMonash University5th September 2013

What do we know about women in SMEs and gender pay equity?

– Very little data/research on gender equity/gender pay equity in Australian SMEs (but see Barrett & Mayson, 2008 on PML and Barrett & Mayson (in preparation) on gender pay equity)

– We can extrapolate some information various statistical reports on SMEs eg RBA, 2012 and DIISRTE, 2012, HILDA data.

– Fair Work Australia research reports provide some understanding of how employment matters in SMEs play out eg FWA Enterprise Case Studies: Effects of minimum wage-setting.

– Some studies about management practices, employment arrangements and gender pay equity in SMEs again see Barrett & Mayson 2006 & 2007 (Aust) also Woodhams & Lupton, 2006, 2009 (UK)

– We really have more questions than answers on the issue

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We know small firms are numerous, economically important and significant sources of employment (including new employment) not only for workers but also for owner-managers

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Firm Size Share of Employment%

Share of Value Added%

Small (0-19) 45.7 33.7

Medium (20-199) 24.3 23.4

Large (200+) 29.9 42.9

Source: Dept Industry, Innovation, Science, Research and Tertiary Education (2012) Australian Small Business: Key Statistics and Analysis, December, 2012. See also RBA, (2012) Small Business: An economic overview, May 2012.

Employment and value added by firm size

We also know that many small firms are located in the service industry, an industry where many women are employed

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Industry %

Services 84.4

Agriculture, forestry & fishing 9.1

Mining 0.5

Manufacturing 6.0

Source: Dept Industry, Innovation, Science, Research and Tertiary Education (2012) Australian Small Business: Key Statistics and Analysis, December, 2012

Small firm employment by industry

In female dominated sectors of the service industry, there is significant employment in small firms

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Sector % employment in small

businesses

% small business in sector

Health care and social assistance 34.4 45.3

Accommodation and food 51.2 41.5

Retail 38.4 38.7

Admin and Support 33.6 36.8

Arts and recreation 38.5 27.2

Ed and training 28.2 17.5

Source: Dept Industry, Innovation, Science, Research and Tertiary Education (2012) Australian Small Business: Key Statistics and Analysis, December, 2012

In terms of people management we know small firms….

Are characterised by

– Highly personalised management by owner-manager (Beaver and Jennings, 2005)

– Employment relations and HR practices (where they exist) shaped by owner-managers’ values and perceptions (eg the sense they make of work and employment in the context of their firm and its environment) (Edwards et al, 2006; Baron and Hannan 2003 etc)

– Informality in management practices (Barrett & Mayson) (can bring both positives and negatives to the firm (see Marlow et al 2009)

– Employment relationship can be treated as an social relationship, rather than an economic relationship as a result of personal and familial ties and good communication between small group of employees and owner-manager

– Stereotyped as being resistant to change/sensitive to cost increases and regulatory burden (see Barrett, Mayson & Bahn forthcoming)

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We know there is reliance on awards for terms and conditions of employment

12.9% of small firms use award (only) for determining wages and conditions

29.7% of small firms adopted a combination of award and other arrangements for determining wages and conditions

57.4% used non-award arrangements

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Source: Fair Work Australia Research Report 1/2012 Award-reliant small businesses (data drawn from Business Longitudinal Database)

Small firms are said to offer advantages of flexibility for workers but this not apparent in employment arrangements by firm size

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Employment arrangements 0-4%

5-19%

20-199%

200+%

Flexible hours 47.5 64.7 69.6 88

Flexible leave arrangements buy/cashout leave/LWP

11.6 28.2 48.1 72

Determine own roster 19.1 27.5 28.3 33

Job sharing 7.1 16.5 20 40

Work from home 21.8 17.7 32.6 58

Paid Parental Leave 2.2 6.0 18.4 49

Flexible use of personal, sick, unpaid, compassionate leave

17 34.2 60 85

Source: ABS Cat. No. 8167.0 Dept Industry, Innovation, Science, Research and Tertiary Education (2012) Australian Small Business: Key Statistics and Analysis, December, 2012, p.32.

Basic HRM practices a step towards good people management and gender pay equity

Job analysis– Job description and person specification

• Tasks, skills, abilities, experience and responsibilities• Key performance indicators (for performance management later on)• Job evaluation to inform rewards?

Recruitment and selection– Recruit on basis of job description – Look more broadly for applicants– Select for skills, abilities and experience

Remuneration– Modern awards as basis– Market intelligence

Compliant and good practice employment arrangements– National Employment Standard as the bottom line – Advice on good practice eg written policies

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See Barrett’s findings on Gender Pay Equity in Small firms for eS4W

What to do next? More research on gender pay equity in Australian small firms

– Qualitative – how do small firm owners make sense of people management and equitable practices?

Develop check lists/advice sheets on

– Job analysis and job descriptions– Ways to broaden applicant pool– Merit based decision-making– Questions employers can ask themselves that will help surface their

underlying assumptions about people Develop training materials in the form of case studies/vignettes on issues

such as

– Formalising people management practices– Merit-based decision making– Work value and valuing comparable work– Compliance with Fair Work and other regulatory provisions

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