Two Cents: Mind the Gender Pay Gap

Women are still earning less than men in today's workforce. But why is that so in the diverse and inclusive society we claim we are?
By: | January 15, 2020
Topics: Asia-Pacific | Compensation and Benefits | DE&I | Employee Experience | Features | Leadership | Southeast Asia | Two Cents

Imagine being told by the cashier that your dollar is worth less because you’re a woman. It might sound harsh, but that’s exactly what’s happening to women around the world as the issue of gender pay gap continues to persist in today’s workforce.

To cite a recent example, women working in Singapore earn 6% less than their male peers who are in similar roles, according to the latest report by the country’s Ministry of Manpower. That makes up to be over $300 lesser every month for doing the same job. And after taking away adjusted factors such as industry, occupation, age and education, the real gender pay gap is 16.3%, which is comparable to the global pay gap of 16.1%.

In Asia, the unadjusted pay gap is slightly lower at 15%, according on a report by Korn Ferry in 2018. But it remains a figure too high for the diverse and inclusive society we claim we are.

So what exactly is causing the gender pay gap?

First and foremost, there are more men in senior and high paying roles than women. So the real problem here is actually not the gender pay gap, but the continual preference of men over women for senior roles in organisations. We must tackle this issue head-on if we have any chance of bridging the gender pay gap.

But we must first understand why businesses still prefer men to head their companies. One of the reasons is the ‘old boys club’ mentality. While there have been improvements to gender diversity and inclusion among the workforce, most of the efforts towards equality are seen in less senior positions. As for leadership positions, it remains very much a male dominated space.

According to a report by Credit Suisse last year, only 14.4% of the CEOs in Asia are female, although that’s an increase from 11.6% in 2015. So with such gender disparity in leadership roles, it will naturally discourage women from aspiring and applying for top jobs, thus further increasing the ratio of men to women leaders and the gender pay gap in the process.

Another reason for having less females in senior positions is the fear of portraying a weaker commitment to shareholder value and the unfounded view that having more females on the board equates to weaker leadership thus affecting overall business returns.

However, a recent study (Women Don’t Mean Business?, Organisation Science 30(6), November 2019) by INSEAD professors Isabelle Solal and Kalsa Snellman has found that based on data of 1,800 US publicly listed companies, there was no material difference in the companies’ return on assets.

Therefore, the perception and belief that women can’t do a better job than men in top leadership roles is baseless and quite honestly, chauvinistic. A study by Harvard Business Review found that women actually rank more highly than men in 12 out of the top 16 leadership qualities – including problem solving, communication skills and innovativeness.

So it’s time to move away from tokenism and truly judge people based on their ability, not their gender.

Another contributing factor to the gender pay gap is segregation of jobs. There tend to be more women in industries such as healthcare, education and social work – all of which are not known to be high paying. The question is not why are women in those jobs, but why are those jobs not paying more in the first place?

Gender bias has devalued what society views as ‘women’s work’ which has unfairly not been given comparable and deserved compensation as other industries such as finance.

Women are naturally good providers of care and communicators, which is why they tend to be in jobs such as healthcare and education. These sectors, which play an important role in forming the fabrics of society, tend to be run by governments who are to be careful and prudent with taxpayers’ money. But it’s time for governments and society itself to give these jobs more recognition and reward that they deserve.

While we have made progress in our efforts towards diversity and inclusion at work, more work remains to be done if we are to be a truly meritocratic workforce.

For a start, whether you’re hiring a clerk or a CEO, let’s make it a point (or even a policy) to hire and pay someone based on their ability, not their gender. Because a dollar is a dollar – regardless who has it.

And the same can be said of ability.