Uncovering the gender pay gap

A new study has identified that the real reason for the gender pay gap is the lack of women in higher-paying roles.

An in-depth global analysis by Korn Ferry finds the much-publicised pay gap between men and women to be very real, but it is predominately caused by fewer women than men in higher-paying roles.

The truth about the Gender Pay Gap globally

When comparing pay between genders overall, the study found that globally, men are paid on average considerably more (16.1 percent) than women, which is in line with other research on the subject.

However, the Korn Ferry Gender Pay Index found that, when evaluating the same job level, such as director, the gap fell to 5.3 percent globally. When considering the same level at the same company, the gap further reduced to 1.5 percent. And when the male and female employees were at the same level and the same company and worked in the same function, the average gap amounted to 0.5 percent.

“Our data show that women earn about 16 percent less than men as a whole, which is a real, significant issue, but this doesn’t paint a complete picture,” said Bob Wesselkamper, Korn Ferry head of Rewards and Benefits Solutions.

“While there are still a number of organisations that pay women less for the same role, on average, when we compared women and men in the same job, the gap is significantly reduced. This pay gap issue can be remedied if organisations address pay parity across the organisation and continue to strive to increase the percentage of women in the best-paying parts of the labour market, including the most senior roles and functions such as engineering and other technical disciplines.”

The pay gap in Asia

In Asia, the overall average gender pay gap is widest in mature markets (Australia, New Zealand) and higher than the global gap at 19.3 percent. For growing markets (China, India) and fast-growing markets (Indonesia, Vietnam), the gap is slightly lower at 14.4 percent and 11.5 percent respectively. When evaluating the same job level, the gap falls to 6.0 percent in mature markets, 4.9 percent in growing markets and 2.2 percent in fast-growing markets.

Interestingly, when considering the same level at the same company, it seems that female employees are favoured in fast-growing markets, with the average gap at -1.3 percent. When male and female employees at the same level and same company worked in the same function in fast-growing markets, the average gap works in female employees’ favour at -3.1 percent.

“Pay parity is still a very real issue, but it’s an issue that can be addressed if there is an ongoing effort to enable, encourage and select talented women to take on and thrive in challenging roles,” said Dhritiman Chakrabarti, Senior Client Partner, Regional Rewards and Benefits Leader for Asia Pacific, Korn Ferry Hay Group.

“Our research shows women have the skills and competencies needed to ascend to the highest levels within organisations, and it should be a business imperative for companies to help them get there.”

Researchers analysed information from Korn Ferry’s pay database to create the Korn Ferry Gender Pay Index. The Index is an analysis of gender and pay for more than 12.3 million employees in 14,284 companies in 53 countries across the globe.

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