Gender pay gap decreasing but still far from over

While the gender pay differential is slowly reducing over the years, there is still a long way to go.

Ritika Mathur, Partner, Human Capital Consulting at Grant Thornton Bharat, said it is too early to say if the gender pay parity will close soon, but there is “significant progress in this regard”.

“With more and more organisations making diversity a critical agenda in their strategy, ensuring fair and equitable distribution of work and pay is gaining importance,” she said.

“This is something even investors look at, as it is a critical pillar of employee engagement.”

Talking to The Indian Express, Mansee Singhal, Mercer’s Rewards Consulting Leader (India and South Asia), said a skew in gender representation substantially impacts the raw pay gap.

“Gender pay equity starts with the improved representation of women across different levels in the organisation and (it should) not just be limited to lower and mid-level,” Singhal said.

“Companies need to proactively assess the current state of pay equity across their organisation by gender,” said Singhal, adding that firms need to “develop a recommended remediation strategy that enables organisation to cost-effectively achieve its pay equity objectives. ”

According to Mathur, gender pay parity remains “a challenge in some industries such as real estate and manufacturing, where the population of women in the workforce is still a lot less. However, in the education and financial services sectors, we are seeing significant strides in pay parity”.

Another report published by foundit (formerly Monster APAC & Middle East) on March 6, showed that the job roles with the most significant percentage of women are customer service/call centre/BPO stood at 25 per cent, while the IT sector held the second largest share at 23 per cent.

It was followed by HR roles at 18 per cent and sales/business development roles at 12 per cent. The report pointed out that jobs with people-centric roles had a higher demand for women professionals.

Why does the gender pay gap widen at higher levels?

The Mercer report showed that women leave jobs at higher rates at career level 3 (13 per cent attrition rate), while companies buy more male talent at level 5.

Mercer’s Singhal said the inequities in the rates of entry, exit, and update progression hinder an organisation’s ability to build its female talent pool beyond level 3.

According to the report, total hires at the entry level of both men and women stands at 17 per cent. At levels 2 and 3, women are hired more than men, but from career level 4, male hiring starts increasing as compared to female employees.

At level 4, female hiring stands at 5 per cent, and male hiring at 6 per cent. This gap further widens, as at level 5, female hiring stands at 3 per cent, and at level 6, it is at just 1 per cent. Meanwhile, at levels 5 and 6, male hiring stands at 5 and 3 per cent, respectively.

The survey showed at the top level, male hiring is at 2 per cent, but female hiring stands at 0 per cent.

Mathur also said, “We have traditionally had a significant portion of the female workforce taking a back seat in their careers, as they take on personal responsibilities in their life. Invariably, this clashed with the time in life when they usually started to take on more managerial positions. As a result, we saw women reaching a certain milestone later in life as their male counterparts, leading to pay disparity.”

“The gender pay gap is bigger at the executive level…as women often need to make a choice between career and marriage and how supportive the spouse also decides her career path,” co-founder of CommsCredible, Priyanka Wadhwa, said.

She added, “Women are also the primary caregivers and shoulder the responsibility of taking care of the children and the elderly. Hence women tend to take more career breaks. Women are also considered secondary breadwinners. All these factors lead to a bigger pay gap at the executive level.”

The way ahead

The foundit report showed that there has been a rise in demand for women in the Indian white-collar economy. The data showed that jobs for women rose 35 per cent year-on-year in February.

The report said that women’s workforce participation primarily increased due to two factors; a) women who dropped out of work during the pandemic to become full-time caregivers have now re-joined the workforce; and, b) focused efforts by India Inc to increase female participation in the workforce. These include introducing benefits such as menstrual leaves and childcare, introducing programs to fight bias in the workplace, allowing flexibility at work, and diversity-focused hiring, among others.

Mathur said, “We see a shift in mindset around domestic responsibilities being shared more fairly between men and women, therefore enabling the younger female workforce to be able to take on more demanding roles. In addition, organisations are also working towards creating a more conducive environment for women to be able to continue their professional commitments along with managing their personal responsibilities – for eg – flexible timings, creating daycare centres, etc.”

Wadhwa, Co-owner of Kapila Krishi Udyog Limited, said, “The principle of equal pay needs to be strongly advocated and promoted by the Government. There also needs to be more women’s representation in the top and senior management of companies which is currently very little.”

“Employers should look at this issue not only as one of equality, but also as something that boosts employee engagement and productivity. If employees feel they are not valued enough it might affect their morale and affect their output,” CommsCredible’s Wadhwa said.

She added, “When hiring, one should have a clear idea of the role and the budget and the gender of the candidate should not have any bearing on the decision. Not only during hiring but also during appraisals, the policy should be the same.”