Gender pay gap drives staff turnover & shrinks talent in Australia

A new survey has found that the gender pay gap is having a direct effect on employee motivation, talent attraction and retention in Australian businesses.

The Pay Gap Matters pulse check, conducted by AI-powered startup EvenBetter, surveyed employees across Australia to assess how gender-based pay disparities are shaping workplace decisions and outcomes. The results reveal clear risks for companies with significant pay gaps, including higher potential turnover among women, reduced motivation, and a narrowing pool of job candidates.

Motivation and retention

The survey identified that one in three women in Australia would leave their employer due to a significant gender pay gap. It also showed that 41% of women and 20% of men report a pay gap reduces their motivation at work. These figures highlight that the impact of unequal pay extends beyond compensation, affecting broader employee engagement and productivity.

According to the findings, 71% of women and 29% of men said they would be hesitant to apply for a job at a company known to have a pronounced pay gap. This reluctance among potential hires risks reducing the diversity and calibre of talent available to Australian businesses.

"It is the first survey of its kind in Australia to measure how pay equity shapes day-to-day workforce choices," said Sorrel Kesby, Co-Founder of EvenBetter. "The results demonstrate that pay equity is a key driver of growth and a strategic priority for business leaders."

The survey results come as new data from the Workplace Gender Equality Agency (WGEA) shows that over 7,800 Australian companies have an average gender pay gap of 20%. Of these, more than 3,000 organisations are classified as having a high or very high pay gap. In total, these companies employ approximately 1.6 million Australians, including 750,000 women.

Talent attraction

Ayal Steiner, Co-Founder of EvenBetter, outlined the business implications of these findings, noting that pay transparency and pay equity are increasingly critical to recruitment and retention strategies:

"This is about business performance. Leaders who treat pay equity as a growth opportunity can unlock stronger engagement, attract better talent and improve retention. Pay transparency is becoming more commonplace and when over two-thirds of prospective female hires screen out a company before the first interview, then that company's recruitment funnel and overall performance are impacted."

The data also suggests that existing gender pay disparities can begin to reinforce themselves over time. Companies with larger pay gaps tend to receive more applications from male candidates, further entrenching gender imbalance and limiting workplace diversity.

"While the gender pay gap tends to have a greater impact on women, our findings show that the right balance is crucial for all employees, as men are also influenced by it when deciding where to work. This is about building the strongest and most diverse team to drive success," Kesby added.

Pay gap analysis

Understanding and addressing the causes of the gender pay gap remains a complex and time-consuming process for many Australian businesses. Human resources specialists often spend significant time on compliance reporting and manual analysis, complicating efforts to address disparities efficiently.

EvenBetter has developed an AI-powered diagnostic platform designed to streamline this process by benchmarking market data and using analytics to reveal the root causes of pay gaps. The company says these insights can help leaders develop more targeted actions to achieve pay equity.

The Pay Gap Matters pulse check was conducted between July and August 2025, surveying hundreds of employees across Australia.