In a climate where diversity, equity and inclusion initiatives are under scrutiny, how can HR help ensure their organisation’s gender equality targets stay on track?

As of 1 April 2026, Australian employers with over 500 employees are required to report on their gender equality data, to set specific targets for improvement and demonstrate measurable progress towards them over a three-year cycle.

The changes, introduced through the Workplace Gender Equality Amendment (Setting Gender Equality Targets) Act 2025 and administered by the Workplace Gender Equality Agency (WGEA), represent a fundamental shift in diversity and inclusion compliance in Australia. For HR practitioners, this is an active, data-driven, multi-year commitment with real regulatory and reputational consequences.

AHRI explored the practical side of the reforms in depth in a recent episode of its ER/IR Unpacked podcast, which unpacked the legislative changes, target-setting requirements and the strategic opportunities the new rules present for HR leaders.

But, as DEI initiatives face growing scrutiny globally, even the most prepared organisations are facing another challenge: how do you continue to pursue meaningful gender equality outcomes in an environment where inclusion initiatives are increasingly politicised, questioned or dismissed as performative?

This article explains the legal and cultural context of DEI in Australia, and how HR can navigate this climate as they strive to meet the new requirements in a way that is credible, achievable and strategically sound.

Diversity and inclusion in Australia in 2026 

HR practitioners setting gender equality targets in 2026 are doing so against a complex and, in some respects, contested cultural backdrop. Understanding that environment is important both for designing an effective internal approach and for communicating targets credibly to employees, leadership and the public.

Over the past two years, there has been a global retreat from DEI programs, partly coming from the United States. Some major corporations have scaled back or rebranded their DEI functions in response to political and (for US-based companies) legal pressure. 

That shift has reverberated across multinational organisations operating in Australia, and has emboldened some domestic voices to question whether DEI commitments represent genuine business value or ideological overreach.

HR practitioners should be across about what this means in the Australian context. Unlike the United States, Australia’s gender equality obligations are embedded in legislation – the Workplace Gender Equality Act 2012 (Cth), the Sex Discrimination Act 1984 (Cth), and the Fair Work Act 2009 (Cth) – and those obligations are being strengthened, not weakened. 

The mandatory target-setting framework coming into force in 2026 is a product of deliberate parliamentary intent to keep progressing gender equality initiatives in Australia.

Framing matters more than ever

The language and framing of workplace inclusion initiatives matters in the current environment. Programs that are perceived as performative, ideologically driven or disconnected from business outcomes are increasingly subject to scepticism from employees, unions, media and the public.  

HR practitioners are consistently grounding their gender equality work firmly in evidence, legal compliance and measurable business outcomes rather than in language that risks being dismissed as virtue signalling.

Australian HR practitioners should also be alert to the possibility that the gender equality reporting framework may not be the endpoint of Australia’s regulatory journey on workplace equity. For example, the UK has moved beyond gender pay gap reporting to introduce mandatory pay gap reporting requirements covering ethnicity and disability. 

These requirements reflect a growing policy consensus that gender is only one dimension of structural workplace inequality, and that evidence-based accountability must extend to other groups who face systemic disadvantage.

“Programs that are perceived as performative, ideologically driven or disconnected from business outcomes are increasingly subject to scepticism from employees, unions, media and the public.”

Generational expectations are also shifting reputational and employer of choice measures. Younger workers in Australia increasingly regard workplace inclusion not as an added benefit, but as a baseline expectation. 

Organisations that cannot demonstrate credible progress on gender equality, especially once WGEA begins publishing target progress data in 2029, will face mounting pressure in the talent market. However, those that can point to genuine, evidenced improvement will have a meaningful competitive advantage in attracting and retaining talent. 

WGEA’s target-setting requirements currently only apply to large organisations. Employers subject to the target-setting obligations are referred to under the Workplace Gender Equality Act 2012 (Cth) as Designated Relevant Employers (DREs). A DRE is any employer with over 500 employees in Australia.

HR practitioners in corporate groups should be aware of the following rules:

• Where a parent company or subsidiary individually employs 500 or more people, each entity is considered a DRE and must set and improve against targets separately.
• A subsidiary or parent company will not be considered a DRE if it would need to be combined with other group entities to reach the 500-employee threshold.

An employer will cease to be a DRE, and will no longer be required to report against targets, if its headcount falls below 400 for six continuous months.

While employers with between 100 and 499 employees are not subject to the mandatory requirements, they may voluntarily select and measure progress against targets. 

For smaller employers, doing so provides an opportunity to demonstrate commitment to best practice and leverage similar commercial, competitive, and reputational benefits to those available to DREs. 

Progress against voluntary targets can be integrated into internal and external communications alongside annual WGEA reporting, enhancing the visibility of genuine DEI commitment.

WGEA has set precise requirements for how numeric targets must be framed. HR practitioners should be familiar with these rules before finalising any target.

The core concept is the percentage point improvement. This reflects a direct numerical shift in the data, and it is how WGEA will assess whether employers have delivered on their commitments. For example, a gender pay gap moving from seven per cent to four per cent represents a three-percentage-point improvement. 

The distinction matters because WGEA will report publicly on whether employers have delivered the specific percentage point shift they nominated.

Rounding rules also apply as follows:

• For gender pay gap targets, round to the nearest decimal place, ensuring internal calculations align with WGEA reporting.
• For pay quartile or workforce composition targets, use whole numbers, as these measures relate to counting people rather than measuring value.

Recommended actions for HR practitioners

With target reporting required between 1 April and 31 May 2026, employers should be prepared for reporting now. Key steps include:

• Start the diagnostic early, using current gender pay gap data as a forecasting and modelling tool to determine which targets to select and where to set numeric values.
• Understand your corporate structure, confirming whether your entity or entities are individually classified as DREs and what that means for reporting obligations.
• Select at least three targets from the prescribed list, ensuring at least one is numeric and that all are expressed in accordance with WGEA’s percentage point and rounding rules .
• Apply scenario modelling to validate that selected targets are realistic, attainable, aligned with strategic business goals, and evidenced based on workforce composition, trends, and available levers.
• Secure senior leadership engagement, with clear governance accountability for target achievement.
• Develop a communications plan covering why targets were selected, what they mean, and how the organisation intends to achieve them, for both internal and external audiences.
• Implement regular monitoring, using data dashboards and analytics to track progress and intervene early if results are not on track.

In an environment of DEI scepticism, it is no longer enough to set targets that sound good on paper. What matters is whether they are grounded in reality, backed by leadership and capable of holding up under scrutiny over time.

Emma Lutwyche is a Partner at law firm Pinsent Masons.