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Can we talk about the gender pay gap?

The covid-19 crisis has further pushed back gender pay parity efforts

Demonstrators during a 2019 march on International Women's Day in Berlin, demanding equality in pay. (Bloomberg)

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In the past 15 months, there’s been a lot of conversation around gender diversity at the workplace. Some companies have announced they are working actively towards a more equal workforce. Whether the change is really happening is anyone’s guess, but what we do know for sure is that when it comes to equal pay for men and women, corporates and businesses are still far behind.

Here are some worrying figures: the estimated earned income of women is only one-fifth of their male counterparts, according to this year’s Global Gender Gap report. In its 14th edition, the report said India had dropped 28 places to take 140th among 156 countries. The only other South Asian country trailing India was Pakistan, at the 153rd spot. The same report highlighted how India was one of the countries with largest economic gender gap (32.6%), and that only 22.3% women are engaged in the labour market.

With the pandemic’s impact on the economy and the job market, experts say the gender pay gap will widen. “The pandemic has pushed MSMEs and companies in sectors that have been severely impacted into survival mode. The uncertainty has made organisations curb costs. In such a situation, gender diversity and pay parity would be the least of their priorities,” says Soujanya Vishwanath, co-founder of Pink Ladder, a platform that focuses on creating a career enhancement ecosystem for women.

The main findings of a 2019 survey by job portal Monster India offer a glimpse of the yawning gender pay gap in the country: women earned 19% less than men. The median gross hourly salary was 242.49 for men and 196.3 for women in 2018. As per the survey, the gap was wider in IT services at 26%, followed by manufacturing where the gap was 24%.

Studies in the past year, too, have indicated that the pandemic has had adverse impact on women, with many leaving the workforce.

A March report, published on the World Economic Forum (WEF) website, says the “pandemic reversed women’s workplace gains in many of the world’s wealthiest countries as the burden of childcare rose and female-dominated sectors shed jobs”. Citing the latest annual PwC Women in Work Index, which looked at 33 countries in the Organisation for Economic Co-operation and Development (OECD) club of rich nations, it said women were more likely than men to lose their jobs in 17 of the 24 rich countries where unemployment rose last year. Jobs in female-dominated sectors like marketing and communications were more likely to be lost than roles in finance, which are more likely to be held by men, according to the index, which called the slowdown a “shecession”.

“If there is any ground we have gained—and the WEF data doesn’t indicate that we have—it’s been ceded because of the covid-19 pandemic,” says Madhura DasGupta Sinha, founder and chief executive of Aspire For Her Foundation, which works towards increasing women’s participation in the workforce and making women financially independent. “The pandemic affected everyone. But, working women, whether employees or entrepreneurs, were the worst hit. Many women have shut businesses because it wasn’t economically viable to run them anymore.”

Need for change

The hurdle is not just convincing businesses about the benefits of having a more diverse workforce and the need for fair pay. Experts say the problem is more deep rooted, because of unconscious biases and subtle prejudices against women in the workplace.

More than eight years ago, Viji Hari, now the founder of CecureUs, a consulting firm for diversity and inclusion and prevention of sexual harassment at the workplace, worked at one of India’s leading IT companies. She recalls an instance when her manager told her that although she had performed well that year, she would not get a hike. He was, instead, giving a raise to another colleague who earned less than her though she had performed better. Since Hari’s husband was doing well in his career in another company, she could afford to not get a raise for a year, he told her. “Is this a conversation a manager should be having,” asks Hari, still incensed by the reasoning. “So, it’s the managers who take these kind of decisions. There needs to be mindset change overall, but especially among team leads,” she says.

Aspire For Her Foundation’s Sinha says Viji’s experience is a common one. “Since women are not considered breadwinners, they are seen as taking someone else’s place,” Sinha explains. “It’s unfair and it’s a thought process that needs to change.”

Last month, UK-headquartered consumer goods company Reckitt released its gender pay report for 2020, providing data for the 10 major markets it’s present in, including India. With over 3,000 employees in India, the median gender pay gap is -148.5%—the negative number represents a gender pay or bonus gap in favour of women, the company said. For bonus payout, the proportion of women (97%) is more than men (88%).

Unlike in the UK, where it’s mandatory for employers with 250 or more employees to calculate and report gender pay gap in their organization, in India there’s no such rule.

While some companies have started tracking the compensation divide between genders, the data is circulated only within the management. Those who voluntarily reveal are mostly multinationals, extending their global practice in markets beyond their home country. Will having a law mandating companies to disclose their gender pay gap, along the lines of what the UK has done, help?

It’s too evolved a concept for India at present, which has many other gender issues to tackle first, says Sinha. “Women’s participation in the workforce itself is minuscule right now,” she says.

“We need to bring more women to the workforce. Once we increase the diversity percentage then we can talk about pay parity. Blind regulations won’t drive a change,” Sinha says.

While most Indian organizations are talking about diversity, the attitude is to tick a box, not to embrace it in spirit, she believes. “Scott E. Page (John Seely Brown Distinguished University Professor of Complexity, Social Science and Management at the University of Michigan, US) did studies on how diversity in the workforce brought in diversity of thinking and enhanced decision making. Most Indian organizations haven’t understood this concept,” Sinha says.

Demanding transparency

Not all share Sinha’s opinion, though. The changes in awareness about diversity, societal expectations from women, and introduction of a law that mandates greater transparency in compensation, all need to happen in tandem, insists Vishwanath of Pink Ladder.

“Take the case of the law that mandates inducting a woman on a company board. It would not have happened without a law. The more women who come in, the higher the chances of overall change taking place,” Vishwanath says. Besides laws, skill development and creating a support system for all genders are also important.

Interestingly, there has been a 45% increase (from 102 to 148 firms in 2020) in the number of organisations under the FTSE (Financial Times Stock Exchange) Asia Pacific Index, which are forthcoming with their gender pay gap data, shows a recent gender pay gap analysis report of Refinitiv, a subsidiary of London Stock Exchange Group.

The report, released in March, also highlights that all equal pay portfolio companies outperformed those having a difference in gender pay. The former had cumulative returns of 55.1%. Technology equipment and software and IT services were the sectors that performed well, according to the report. It doesn’t have India specific data.

The onus doesn’t lie just on the organisations. Women, too, have to participate actively to bring about change. “How many women are aware of gender pay parity and how many will question it and take action? How many are willing to take the risk, as they may be labelled ‘trouble makers’, which, in turn, will affect their growth in the organization,” says Hari.

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