TomorrowMakers

Gender pay gap is a real concern, and it is time we started becoming more aware of the situation.

Gender Pay Gap: Where do Indian women stand right now

Women in India – as elsewhere in the world – usually get the short shrift when it comes to gender equality in the workforce and pay parity, and maybe sometimes we are to blame. But guess what? Women are now fighting back – and considering the empirical evidence, we are beginning to see results.

The Monster Salary Index 2016 – the latest from the series released in March 2017 – shows the bigger picture: for every Rs. 100 earned by a male employee for a job in 2016, a woman earned Rs. 75; in other words, she earned 25% less.

 

But don’t let that get you down; we are slowly seeing victories, albeit small ones. For instance, in 2015, we earned 27% less than men; this number was reduced to 25% in 2016. The two percent shrinkage in the gender pay gap signifies that income packages for women are getting fatter.

The Highs

The Monster survey is usually carried out across eight categories:

  • Construction and Technical Consultancy
  • Education and Research
  • Financial Services, Banking and Insurance
  • Healthcare, Care Services and Social Work
  • ICT services
  • Legal, Market Consultancy and Business Activities
  • Manufacturing
  • Transport, Logistics and Communication

Apparently, in 2016, the worst-off, in terms of the pay gap, was the transport, logistics and communication sector, where women’s earnings were less than men’s by more than 42%. However, believe it or not, women earned more than men in the education and research segment – by 3.4%!

An essential learning from the data shows that the higher a woman rises in job hierarchy, the lower the gender pay gap. According to the Monster data, the gender pay gap shrank from 28.1% in 2015 at the supervisory level to 20% in 2016 – a drop of 8.1%.

In fact, we should take heart from the fact that in India, the gap is shrinking each year, a trend that sets India apart in the world, according to a Linkedin report released in 2017, titled “Moving the Needle for Women Leaders”. The report says that hiring of women in leadership positions rose by 25% in India in the 2008-16 period – the highest rate of increase, globally.

This has been the trend for over a decade now, as per the data of Paycheck India, the research wing of the Indian Institute of Management - Ahmedabad. According to this data, the gender pay gap had narrowed from above 70% before 2008 to about 40% in 2011. 

Source: Paycheck.in (Graph 1-Gender Pay Gap in India.)

And if you consider the five years between 2006 and 20011, the salary gap was still at an ugly 54% over 2006-11, shows Paycheck data. Compare that with the current level of 25%, and you can gauge the strides we have made.

Even the Constitution of India addresses the issue of gender equality, specifically Articles 14, 15(1), 15(3), 16, 39(a), 39(d), 42 and 51. Apart from this, there are laws that specifically address gender pay gap too.

The Lows

It is, however, vital that we don’t get carried away by thinking that pay corrections are happening across segments. It is also important to note two ground realities vis-a-vis the three studies mentioned.

  • The Linkedin survey relates to only leadership hiring, and at this level, pay gaps are non-existent.
  • The Paycheck survey, conducted online, left people without a computer out of its purview. And it did echo some of Monster’s unpalatable findings; for instance, an unhealthy pay gap among health professionals: of about 66%.  

The Monster survey, too, was online, and only about 15% of respondents were female employees. This, the study concedes in a footnote, “underscores the gender divide, signifying a gap in access to the labour market and/ or the Internet.”

Thus, we see the positive developments only in certain pockets. The overall picture is bleak, as highlighted in the Global Gender Gap Report 2017, the latest in the series from the World Economic Forum (WEF).

As per this report, India closed its gender gap by 67% during the 12 months under review. At first blush, this may appear as an impressive performance in itself, but it is not.

In the WEF ranking of how well various countries have managed to close their gender gap, India stands 108 – down 21 places from 87 in the previous year. Moreover, it trails Bangladesh and China, which are ranked 47 and 100, respectively.

“Newly available data reveals the scale of India’s gender gap in women’s share among legislators, senior officials and managers, as well as professional and technical workers for the first time in recent years, highlighting that continued efforts will be needed to achieve parity in economic opportunity and participation,” the report notes.

 

Image Source: The Global Gender Gap Report 2017

So, what is the Indian government’s take on the situation? If its Six Economic Census is anything to go by, it acknowledges the importance of gender equality and the role of women in achieving this. And “women have started playing important roles in decision making at all levels”, it says.

However, the report is forced to concede, of the 58.5 million business establishments registered in India, only 8.05 million are run by women – accounting for a measly 14% of Indian companies.

Women Entrepreneurs

For quite a while now, Hollywood actresses have been speaking out against the disparity; most recently, Jennifer Lawrence and Viola Davis. Women athletes such as Serena Williams too have voiced similar complaints, while in Bollywood, Priyanka Chopra and Kangana Ranaut have been vocal about the issue.

But no contest is won unless someone takes the initiative to do something about it, and that perhaps is best when there is a woman at the top. Today, at least two women-propelled venture capitals have come forward to make this happen by giving women entrepreneurs a leg-up: SAHA Fund and SonderConnect.

SAHA Fund believes large companies with more women in leadership positions performed significantly better regarding finance. Their ROI was found at least 41% higher while operating results were 56% better. Similarly, women-led private tech firms achieved 35% higher ROIs, it says.

Because of this, SAHA Co-founder and Managing Director Ankita Vashista says, the fund will not only back women-led start-ups, but also companies that have women in senior positions. The areas it is looking at includes firms across e-commerce, social media, mobile, cloud, analytics, education, analytics, healthcare, food tech and tech platforms, and those that can scale up leveraging digital technology.

It provides finances between Rs. 1.5 crore and Rs. 6 crores. One start-up that SAHA funded in 2015 was fitness aggregator Fitternity, which today claims annual sales run rate of $3 million, and over 300,000 online transactions.

Another company that does not hesitate to take a chance on women is SonderConnect, which says “there is a problem in the start-up ecosystem for women” in India. To support its argument, it says while India was the fifth largest start-up ecosystem in the world in 2015, showing a 40% growth numbers, only 9% of founders were women.

On its web page, the company states “SonderConnect wants to play a significant role in finding the solution. In the long term, our aim is to create a generation of successful women entrepreneurs that are equal players in the vibrant Indian start-up ecosystem.”

SonderConnect is helping India’s first organic food brand HappyHealthyMe, another women-led start-up, raise $1 million.  

Dealing with the pay gap

Despite the gender pay gap slowly decreasing, it will probably be a while before women, at every professional level, will be on par with their male counterparts in terms of earnings. This makes it essential for us to start making a conscious effort to get involved with our finances and investments. We need to accomplish the task of financial planning keeping in mind our longer life spans, specific health concerns, rising rate of inflation along with a comparatively lower pay. Some tips that can help here include

  • Becoming better acquainted with current earnings and outgoings. For instance, making a list of monthly expenses and finding a balance between saving and spending.
  • Becoming more involved with investments, insurance and other financial areas that can help increase wealth.
  • Reading and staying updated with the latest news and changes in the finance world so to make pre-planning easier.

Conclusion:

While things are slowly changing for women for the better, it is crucial that we don’t get ahead of ourselves. The fight for equal pay will not end anytime soon, but you can do your bit by keeping firm control of your finances to improve your situation.Women in India – as elsewhere in the world – usually get the short shrift when it comes to gender equality in the workforce and pay parity, and maybe sometimes we are to blame. But guess what? Women are now fighting back – and considering the empirical evidence, we are beginning to see results.

The Monster Salary Index 2016 – the latest from the series released in March 2017 – shows the bigger picture: for every Rs. 100 earned by a male employee for a job in 2016, a woman earned Rs. 75; in other words, she earned 25% less.

But don’t let that get you down; we are slowly seeing victories, albeit small ones. For instance, in 2015, we earned 27% less than men; this number was reduced to 25% in 2016. The two percent shrinkage in the gender pay gap signifies that income packages for women are getting fatter.

The Highs

The Monster survey is usually carried out across eight categories:

  • Construction and Technical Consultancy
  • Education and Research
  • Financial Services, Banking and Insurance
  • Healthcare, Care Services and Social Work
  • ICT services
  • Legal, Market Consultancy and Business Activities
  • Manufacturing
  • Transport, Logistics and Communication

Apparently, in 2016, the worst-off, in terms of the pay gap, was the transport, logistics and communication sector, where women’s earnings were less than men’s by more than 42%. However, believe it or not, women earned more than men in the education and research segment – by 3.4%!

An essential learning from the data shows that the higher a woman rises in job hierarchy, the lower the gender pay gap. According to the Monster data, the gender pay gap shrank from 28.1% in 2015 at the supervisory level to 20% in 2016 – a drop of 8.1%.

In fact, we should take heart from the fact that in India, the gap is shrinking each year, a trend that sets India apart in the world, according to a Linkedin report released in 2017, titled “Moving the Needle for Women Leaders”. The report says that hiring of women in leadership positions rose by 25% in India in the 2008-16 period – the highest rate of increase, globally.

This has been the trend for over a decade now, as per the data of Paycheck India, the research wing of the Indian Institute of Management - Ahmedabad. According to this data, the gender pay gap had narrowed from above 70% before 2008 to about 40% in 2011.