You Can’t Close What You Don’t Understand: The Case for Adjusted Pay Gap Analysis
Australia’s national gender pay gap currently sits at 21.8% (WGEA, 2025). It’s a headline figure we’ve all come to know - the difference in average total remuneration earnings between men and women across the workforce.
But while this number is important, it’s not the full story.
If your organisation is serious about achieving pay equity, the real question is this: Do you know what’s driving your pay gap - and which part of it you can actually close?
That’s where adjusted pay gap analysis comes in. It goes beneath the surface and reveals the pay patterns that can’t be seen in raw averages alone.
At equidi, we believe you can’t fix what you don’t understand - and you can’t build fair, future-ready organisations without understanding both your unadjusted and adjusted gaps side by side.
What is the adjusted pay gap?
The adjusted pay gap is the difference in earnings between men and women after controlling for the factors that legitimately influence pay - things like job level, performance rating, location, and tenure etc.
This isn’t a like-for-like role comparison (which should also be undertaken as a minimum). It’s a holistic model that reflects how fairly your organisation rewards work, while accounting for the factors that should influence pay.
Think of it as a more accurate lens on pay equity: It answers the question - given what’s appropriate to consider in pay decisions, are we rewarding people equitably across our organisation?
If the answer is no, the adjusted gap will reveal where inequities are hidden - and where to take action.
Why it matters
Understanding both the adjusted and unadjusted pay gaps are essential because they tell you different things, and each finding will likely require a different approach and strategy to successfully embed equity in your organisation.
🟣 The unadjusted gap reveals systemic inequality in workforce composition, characterised by the underrepresentation of women, particularly in higher-paying roles and functions. Closing this gap may require structural changes, including but not limited to: evaluating who gets hired, who gets promoted, or who forms part of the future state of the organisation, including leadership. Most importantly, the organisation should be asking itself if these decisions are being made with an equitable lens.
🟣 The adjusted pay gap gives you clarity. It filters out the noise by accounting for relevant variables like level, age, tenure, performance, location, and pay grade - so you can focus on what you can actually control.
In many cases, organisations find that their adjusted gap is smaller than the headline figure. That’s good news - it means that while structural issues like representation may still exist (and it goes without saying - they still need to be addressed), pay practices themselves are more equitable than they appear at first glance.
Rather than exposing new problems, adjusted analysis often gives leaders a clearer path forward - with confidence, focus, and data to back their decisions .
These are insights that rarely show up in surface-level metrics - but they erode trust, performance, and culture over time. If not identified, they can also lead a company down the garden path in terms of addressing the pay gap. I often hear this phrase from companies:
‘We just need to hire more women’
Whilst this is often well-intended, this may not solve the problem; in fact, it may even exacerbate the pay gap if you are unclear about what you are trying to address.
Without understanding both the unadjusted and the adjusted pay gap collectively, you’re only solving half the problem.
For example: You might see a small unadjusted gap and assume you’re in the clear - but your adjusted analysis could show pay discrepancies at the senior manager level. Or you might have a large unadjusted gap due to underrepresentation in leadership — but a near-zero adjusted gap, indicating your pay practices are fair and the issue is pipeline or opportunity related.
Each insight leads to a different course of action. And both are critical to building a truly equitable workplace.
Turning insight into action
When organisations understand their adjusted pay gap, they gain more than just a metric - they gain:
Clarity on where specific inequities exist
Precision in how to respond
Accountability to track progress
Confidence and certainty in the fairness of their internal systems
You can’t close the gender pay gap with good intentions or aggregated averages. You need to understand what’s driving the numbers, and that starts with adjustment.
Certification: Recognising real progress
At equidi, we’ve built our adjusted pay gap model in line with global best practices - and it forms the foundation of our Universal Fair Pay Certification, delivered in partnership with the Fair Pay Innovation Lab.
This certification:
Audits your unadjusted and adjusted pay gap across your entire organisation
Benchmarks you against international standards
Recognises companies that are actively working toward measurable, equitable pay
It’s not just about ticking boxes. It’s about showing your people, your board, and the market that you take fairness seriously - and have the data to prove it.
Fair Pay Certification Badges
Let’s make pay equity actionable
The path to pay equity isn’t just about closing a gap - it’s about understanding which gap, and why it exists.
If you're ready to dig deeper, we’d love to show you how equidi can help you turn data into strategy - and strategy into certification.
equidi is reshaping the future of fair pay. Our platform puts pay equity at the centre of business strategy - giving you real-time visibility into pay gaps and workforce representation across every part of your organisation. With tailored insights and guided actions, equidi helps you set goals, track progress, and drive meaningful change every day.
And when it comes to compliance, we’ve got you covered — automating your WGEA reporting and keeping you aligned with the latest gender equity requirements, effortlessly.
