News release

From: Adelaide University

What makes a workplace more likely to have a gender pay gap?

New Adelaide University research has identified which industries, workplace structures and employment policies are most strongly linked to gender pay gaps in Australian workplaces, with flexible work arrangements being a key indicator.

The study analysed publicly available data from almost 7800 Australian employers that report to the Workplace Gender Equality Agency (WGEA), examining workforce composition, industry sector, organisational size, leadership representation and workplace policies.

“We found that workplace structure matters. Employer size, industry sector, and the representation of women in senior and higher-paid positions were among the strongest predictors of an organisation’s gender pay gap,” said Dr Ilker Cingillioglu, from Adelaide University’s School of Accounting and Finance.

“Industries such as financial services, construction and mining consistently showed larger pay gaps than many other sectors. We also found that organisations with more women in higher-paying roles tended to have smaller pay gaps.”

One of the study’s most unexpected findings was that organisations offering flexible work arrangements often had larger gender pay gaps.

“At first glance, this appears counterintuitive because flexible work is often promoted as a tool for improving workplace equality,” Dr Cingillioglu said.

“This does not mean flexible work causes inequality. Instead, it suggests these policies may sometimes be introduced in workplaces where pay inequities already exist or where cultural barriers remain.

“The findings highlight an important lesson: workplace policies alone do not guarantee equitable outcomes. Organisational culture, leadership practices and career progression opportunities are just as important as the policies themselves.”

The study began when a group of MBA students — Aakriti Bhandari, Peiran Hu, Benjamin Lewis, Joshua Pryor and Matthew Squires — in Dr Cingillioglu’s Business Analytics for Managers course became interested in whether AI and machine learning could help explain why gender pay gaps persist despite decades of policy efforts.

Published in peer-reviewed academic publication Gender in Management, it is among the first to apply AI-driven algorithmic modelling techniques to the WGEA data set for gender pay gap prediction.

“While most previous studies have focused on describing the problem, we wanted to take it to a step further and identify which workplace characteristics are most strongly associated with large pay gaps and whether AI could help predict where inequalities are most likely to occur,” Bhandari said.

“The AI models we employed were highly accurate, correctly identifying organisations with above-average pay gaps nearly 92 per cent of the time.”

According to WGEA, women earn about 78 cents for every dollar earned by men when total remuneration is considered.

“Gender pay gap affects lifetime earnings, retirement savings and economic security for millions of Australians,” Dr Cingillioglu said.

“It also has broader economic consequences, with previous estimates suggesting the gender pay gap costs the Australian economy tens of billions of dollars each year.”

The researchers suggest future research could investigate which strategies are most effective in reducing disparities, while also exploring how responsible AI and machine learning can support evidence-based policymaking and workplace equality initiatives. It could also investigate the inclusion of smaller businesses, gig workers, contractors and unpaid care work.

“The study highlights the value of predictive analytics in gender equality research, showing that AI can help identify organisations at greater risk of significant pay disparities before problems become entrenched,” Bhandari said.