The Gender Pay Gap Is Real – Women in India still collectively earn 18.8% less than men, due to lack of representation in high-paying industries, senior functions and leadership positions. But organizations are addressing the wrong issue, according to Korn Ferry Hay Group Gender Pay Index. Firm’s Index analyzed gender and pay for more than 8 million employees in 33 countries, including 57,000 job holders in India
Companies need to address the disproportionate amount of opportunities for females, lack of a progression path to the ‘big jobs,’ rather than solely limiting their pay gap solution to what men and women make at similar job levels and functions (the pay gap favor men by 1.6% globally and 3.5% in India).
According to a new and extensive research by Korn Ferry Hay Group, a division of Korn Ferry (NYSE: KFY), the much-publicized pay gap between men and women is real, and it impacts companies almost identically across the globe. However, companies are perhaps looking for a solution in the wrong places.
The global study findings come from Korn Ferry Hay Group’s PayNet database, which tracked and analyzed gender and pay for more than 8 million employees in 33 countries, including 57,000 job holders in India.
The Truth About The Gender Pay Gap
When comparing pay between genders overall, the study found that men are paid vastly more (17.6 percent) than women, in line with other research on the subject. The figure for India stands at 18.8 percent. The findings further affirm that women still collectively earn less than men due to a lack of representation in the highest-paying job functions and industries, and at the most senior job levels.
Yet this doesn’t paint a complete picture. Hay Group analysis found that, when evaluating the same job, function and company to compare like with like, the true gender pay gap shrinks to favor men by 1.6 percent globally and 3.5 percent, here in India.
|Global Figure||India Specific|
|Overall average pay gap||17.6% (favors men)||18.8%
|Pay gap after controlling for same job level||6.6%
|Pay gap after controlling for same job level at same company||2.2%
|Pay gap after controlling for same job level at same company and same function||1.6%
“Our data shows that when it comes to thinking about pay on the basis of gender, a man and a woman in the same company, doing the same job, will usually be paid nearly the same – but still favoring men by 1.6 percent. The data shows this very consistently, from Sweden to South Africa,” said Ben Frost, a global reward expert at Hay Group. “We need to look at the pay gap differently. The biggest driver of the pay gap is a lack of women in high-paying industries, senior functions and in leadership positions. If we want to close the pay gap and make a difference, it is the road to the top jobs that needs to be the focus. This is the pay gap problem.” The same figure for India stands at 3.5 percent.
As Hay Group points out in a forthcoming whitepaper, which accompanies the Gender Pay Index, women make up a very small percentage of CEO and executive officer positions. For example, women only occupy 20 (4 percent) of CEO positions and 25 percent of executive/senior-level and manager positions at S&P 500 companies, while they account for 45 percent of the labor force at these companies (Catalyst).
But it’s not just seniority – the number of women found in the highest-paying industries (for example oil & gas, technology and life sciences) is also lacking. Furthermore, even in lower-paying sectors where women dominate – such as hospitality and tourism – men still hold the vast majority of management and executive roles –the highest paid jobs within any industry.
Hay Group’s research found that when looking at jobs by level from its PayNet database, women make up 40 percent of the workforce for clerical jobs, but only account for 27 percent of manager and 17 percent of executive level jobs. In India, women only account for 10 percent of manager and 5 percent of executive level jobs.
The analysis proves that women are still vastly underrepresented in the best paying areas of the labor market – that’s to say, in the most senior roles, at the best-paying companies and within the highest-paying industries.
Closing the Real Gender Pay Gap
Hay Group and other research shows that diversity in working teams is strongly correlated with better business performance and shareholder return. In fact, in a study issued in March 2016 by Korn Ferry Hay Group of 55,000 professionals across 90 countries, women score higher than men on nearly all emotional intelligence competencies. Therefore, getting more women into high paying functions and industries, as well as into senior levels of organizations, is a business as well as social imperative.
In order to move the needle, organizations need to make a conscious effort to empower female leaders by:
- Rethinking recruitment, development, promotion and reward processes.
- Getting more women into the talent pipeline (and keeping them there).
- Creating the right kind of culture where women want to stay and progress their careers.
“Organizations need to scrutinize the unconscious male bias in the ways they hire, develop, promote and reward employees, and define successful career paths, to ensure they optimize female talent,” said Peggy Hazard, managing principal at Korn Ferry Hay Group and co-author of the study. “Only when we have more women in higher paying jobs will we see the gender pay gap begin to close – not only by further equaling pay at similar job levels, but ensuring females reach the most senior roles, at the top of global organizations.”
The Pay Gap By Country
Hay Group analyzed data for 33 countries from across the world. Data for 10 countries is included below for illustration:
|Country||Headline pay gap||Same level||Same level + company||Same level, company, function|
(The data was drawn from Hay Group’s PayNet database which contains pay data for more than 20 million job holders in 25,000 organizations across more than 110 countries. Within this database, Hay Group has gender information for more than 8 million job holders across 33 countries. The analysis did not look at the gender pay gap for the United States since gender data is not collected by Hay Group in the US.)