Gender pay gap- sad reality for corporate world?

Gender pay gap in India

Women are no longer an underclass of “roti makers” and “child producers” to be cast aside and held back from progress. Given an equal opportunity, they are capable and ambitious as their male colleagues. They are still facing gender discrimination in almost all the sectors, with manufacturing sector having highest pay gap.

India suffers from a gender pay gap of 27%, with men earning an average gross average salary of Rs 288.68 per hour, when women earn Rs 207.85, according to a new report. The manufacturing sector was found to have the highest pay gap at 34.9%; the banking, financial services and insurance sector and that of transport, logistics and communication have the lowest pay gap at 17.7%, according to the Monster Salary Index.

Even the employees of organisations like Wipro, which claim to be award winning supporters of gender diversity, face this problem. Infact, women were being paid 50 per cent less than my male colleagues for doing the same work. But as the UK employment tribunal verdict against this company has highlighted – what good are these gender diversity policies if companies are breaking the law? Policies can be self-serving, law is not.

IT Industry– IT services sector pays the highest median gross hourly salary at Rs 337.3, the gender pay gap in the field stands at 34% – men in the IT services sector earn Rs 360.9 per hour, while women earn only Rs 239.6. Also, despite being one of the main criteria taken into consideration while deciding salaries, the education sector was found to pay the least, PTI reported.

Pharma Industry- The world’s third largest producer of drugs, the Indian pharma industry employs some 49.5 million people. Just 15% are women. The key reasons for the huge gender gap in the industry include the significantly large sales force that is not yet considered an ideal opportunity for women, conservative policies that do not adequately address the creation of women-friendly work environment and the traditional perception that pharma is a male-dominated sector. However few companies like Sanofi India Ltd, the local unit of French drug multinational Sanofi SA, Quintiles India, Lupin Ltd and Biocon Ltd are led by women leaders, are a few other firms have successfully established better models in gender balance.

Medical Industry- There is a rising welcome trend of women joining medical colleges in India, with female students being comparable in number or even outnumbering male students in many colleges. The highlights of Monster Survey Index indicate that the gender pay gap in India in the healthcare sector stands at 26 per cent – Median gross hourly salary fluctuated: it stood at Rs 216.5 in 2013, at Rs 240.6 in 2014 and in 2015, it decreased to Rs 220.4. The report states an overall gender pay gap of 27 percent in India where men earned a median gross hourly salary of Rs 288.68, whereas women earned only a median gross salary of Rs 207.85 per hour.

Given the high number of women entering medicine—a status report in 2012 pegged the number of female medical students in India at around 200 000, compared with 175 000 male students—and subsequently also joining as faculty in medical colleges, one would expect a significant number of them to occupy top leadership positions in medical education. This is where there seems to be a gap—much fewer women occupy positions of director or principal in medical colleges in India than men, as reported by Anant Bhan, a researcher in global health and bioethics, and adjunct visiting professor at Yenepoya University, India.

What does the Law say?

Laws in India for gender gap in India are Equal pay for equal work which is a Directive Principles of State Policy under the Constitution. According to Article 39 (d), the state shall, in particular, direct the policy towards securing that there is equal pay for equal work for both men and women.

Under Section 4 of the Equal Remuneration Act, 1976 which says that it is the duty of the employer is to pay equal remuneration to men and women workers for same work or work of similar nature.

Section 5 of the Act specifically makes positive discrimination against women as it says that no employer while making recruitment for the same work or work of a similar nature make any discrimination against women.

The penalty for the discrimination is given in Section 10 (2) which says that if any employer

(a) makes any recruitment in contravention of the provisions of his Act, or

(b) makes any payment or remuneration at unequal rates to men and women worker, for the same work or work of a similar nature, or

(c) makes any discrimination between men and women workers in contravention of the provisions of this Act,

he shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to twenty thousand rupees or with imprisonment for a term which shall be not less than three months but which may extend to one year or with both for the first offence, and with imprisonment which may extend to two years for the second and subsequent offences.

Is Start- up ecosystem too gender biased?

Well! If nothing worked opening a start-up of your own seems to be a good option. But it is found that only 21 out of 670 funded startups are owned by women. What are the challenges women faces when they wish to be their own boss?

Subjects like fashion, food and lifestyle interests a woman more than tech, automobile etc. but even here, men are front runners owning startups like Myntra, Voonik, Jabong etc. Although more and more women are opting for careers in Engineering, but they still hesitate to set up a start up. Since there are very few women in technology sector, it makes hard for an investor to trust upon her intellectual capabilities. Investors often end up asking the questions regarding raising her family. In such cases, it is the woman who turn down the investor.

The American Scenario

The American law for gender pay gap says that women may have gotten the Equal Pay Act in 1963, making it illegal to pay men and women differently for the same type of work, but today, women are still paid, on average, only 78 cents for every dollar a man earns. Though this number has substantially narrowed down but the pay gap for women of color still persists. How has America managed to do so yet it’s still 2.5 times the size of those of other industrialized countries? In 2009, President Obama signed the Lilly Ledbetter Fair Pay Act, intended to restore and improve on equal pay law. Under this Act, he announced an executive action that will require companies with 100 employees or more to report pay data broken down by gender. The government should make it illegal for companies to pay men more than women.

Men in the U.S. work more hours than women do. Some economists to argue that, because of this, paying women exactly the same when they work less than men would be unfair. According to data from the Bureau of Labor Statistics, 26 percent of men who work full time worked more than 41 hours a week, whereas only 15 percent of women worked those hours. One study found that this accounts for 10 percent of the gender pay gap. (However, it’s worth noting that men may not be working as much as they say, and women’s honesty with regard to hours may be stymying their advancement in the workplace.)

National surveys from the Bureau of Labor Statistics overwhelmingly support the notion that women spend a lot more time on chores than men do, which is why many proponents who want to close the gender gap argue that one way men can contribute to closing the gender wage gap is ensuring equality on the home front.

Perhaps there can be policies that would support that too, which brings us to … Answer– Give women flexible work, better maternity-leave policies, and free childcare.

Reasons for pay gap

The report said that some of the reasons behind this gender pay gap could be the preference for male employees over female employees, preference for promotion of male employees to supervisory positions, career breaks of women due to parenthood duties and other socio-cultural factors.

The lower average income for women is partly due to increased numbers working part time across all professions.

Sanjay Modi, managing director (India, West Asia, Southeast Asia, Hong Kong) said men often receive higher salary offers than women vying for the same title in the same organisation. He added that the task at hand is the pace at which this pay gap can be bridged.

Across industries, irrespective of salary levels, there often tends to be high levels of dissatisfaction with pay, said Nishchae Suri, partner and head of people and change advisory, KPMG in India. “One reason could be because there is lack of clarity in pay communication. Organisations are not very transparent in their pay decisions and the communication is not purposeful enough, leading to overall dissatisfaction.”

There’s no country in the world where women earn more

Between 2011 and 2014, a woman earned $76 for every $100 that a man was paid, according to the World Bank. Even in the country with the smallest pay gap – New Zealand – women still earned 5% less than men in 2015. In the US, the gap was 18%, one country shy from the bottom 10

 

Some of the researchers and reports say that though according to various surveys, the pay gap is estimated to vary anywhere between 19% and 27%. But on a closer look, the difference is far less, finds a recent global report. Indian men, overall, earn an average 18.8% more than women, according to Korn Ferry Hay Group’s report. But on comparing the salaries of men with women at the same job level, the same company and in the same function, the study shows that men earn only 3.5% more than women.

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