Australian businesses must set targets to deliver genuine gains in gender equality

From 1 April, all employers with over 500 employees must establish targets, including specific percentagepoint  improvements that will be measured between 2027 through to 2029. The new requirements mean employers must move beyond disclosure to measurable progress. This will require the use of detailed diagnostics and data-led forecasting to determine realistically achievable improvements.

WGEA’s latest employer gender pay gaps report (21-page // 1409KB PDF), analysing data from 10,500 employers and 5.9 million workers nationwide, showed modest signs of progress while highlighting persistent disparities across Australia.

The agency reported that the average total remuneration gender pay gap fell to 12.7% in 2024–25, down from 13.1% the previous year. Most employers recorded year-to-year improvements, but about 70% of private sector organisations still have pay gaps that favour men, and a quarter reported gaps of 20% or more.

Reporting employers will have three years to demonstrate genuine improvement rather than symbolic commitments and will be required to update rolling targets. The new regime is designed to move from transparency to measurable change.

Employers that approach target setting strategically, backed by robust data and forecasting, will be best placed to meet regulatory expectations, enhance employer of choice reputation in the market, and achieve better workplace outcomes.

Clear rules on how targets must be expressed

WGEA has set out precise requirements for how employers must frame their targets – particularly the numeric targets, of which employers must set at least one. Central to the approach is the concept of a ‘percentage point improvement’. Unlike percentage changes, which can vary depending on methodology, percentage points offer clarity and consistency by reflecting direct numerical changes to the data. For example, a gender pay gap moving from 16% to 13% reflects a three-percentage-point improvement, not a ‘19% reduction’.

WGEA will report on whether employers have delivered against the specific percentage point shifts they nominate. This makes it critical to adopt realistic, evidencebased targets that reflect both the scale of change required  within the business and the operational levers available to effect that change.

WGEA also requires employers to follow strict rounding rules depending on the type of target. Where targets relate to gender pay gaps, organisations must round to the nearest decimal place, ensuring internal calculations and WGEA reporting align. For targets concerning pay quartiles or workforce composition, employers must use whole numbers, reflecting the fact these measures relate to counting people rather than value.

Data driven target setting

Setting credible targets requires more than reviewing top line figures. Employers will need to examine data at a granular level to understand where gaps originate and how they can be improved. Organisations are now introducing dashboards, detailed segmentation, and diagnostic tools to identify structural drivers of inequality, such as:

• occupational segregation or under representation in key business areas;
•  limited progression pathways into management;
• variations in starting salaries and remuneration practices;
• higher turnover among under represented groups; and
• unintended impacts of flexible work or part time arrangements.

An employer with a high baseline gender pay gap may need to focus on recruitment and progression pathways, while an employer facing a pay gap within a particular management category may need to examine remuneration decisions, loadings, and bonus structures.

Diagnostic analysis is also important. If an organisation’s gender pay gap fluctuates year on year due to workforce changes, setting targets without considering trend lines may result in over  or under committing.

Forecasting and scenario modelling

Employers are also increasingly applying forecasting and scenario modelling to understand what improvement is realistically achievable over the next five years. Using workforce data, employers can model the gender impact of recruitment strategies, promotion cycles, remuneration adjustments, retention initiatives, and structural changes.

Modelling may show that closing a three percentage point gender pay gap requires not only salary adjustments but also improved representation in higherpaid  roles, better retention of women at midcareer stages, or deliberate development of successor pipelines. Forecasting can also reveal whether a target will be met organically through expected workforce movements, or whether deliberate intervention is required.

This analytical approach gives organisations confidence that the targets they nominate are neither aspirational nor arbitrary. It also supports annual monitoring, allowing employers to adjust strategies if progress stalls.

Recommendations for employers

Employers preparing to set their targets should consider:

• conducting a robust review of current gender pay gaps, workforce composition and progression outcomes, using both quantitative and qualitative insights;
• aligning targets with strategic priorities, ensuring they support broader workforce and diversity initiatives;
• engaging senior leadership, securing governance oversight and clear accountability for achieving the targets;
• developing a communications plan to explain the targets, why they matter, and how the organisation intends to meet them; and
• implementing regular monitoring, using dashboards and analytics to track progress and intervene early if results deviate from expectations.

WGEA’s new target setting framework is a significant escalation in regulatory expectations. It is not enough to publish gender equality data and employers are now measured on improvement.

Organisations that take a data driven approach, apply realistic and transparent targets, and embed change across their workforce strategies will be well positioned to avoid reputational harm and achieve better gender equality by 2029.