Statistics can be used (or misused) to prove anything. One such commonly used statistic is around the gender wage gap. In early 2014, when President Obama cited a common gender wage gap statistic in his State of the Union address, he said, “Women make up about half of our workforce. But they still make 77 cents for every dollar a man earns. That is wrong, and in 2014, it’s an embarrassment.” This data point and his statement did draw a lot of attention and along came some severe criticism. Why?
It’s not just the US. The International Labour Organization (ILO) stated in its latest Global Wage Report that men were paid more than women in all of the 38 countries examined, showing that the gender pay gap remains firmly entrenched around the world. But here is the mystery. The same ILO reports that working women in large parts of the world are better educated, more experienced and more productive than their male counterparts on an average, but are still paid less. So what’s really going on here? The problem is only partially explained by the top-line statistical data reported by leading organizations.
In definition, gender pay gap is simply the difference between the average earnings of all men and women working full-time. It does not account for differences in occupations, positions, education, job tenure, life choices, or hours worked per week. When all these relevant factors are taken into consideration, the wage gap narrows.
A deeper analysis will tell you that the problem lies with gender based social expectations and stereotypes. Consider, for example, how men and women differ in their college majors / education choices. Men overwhelmingly outnumber women in high paying Science, Technology, Engineering & Math (STEM) careers, while women prevail in what is known as pink collar jobs e.g. health and education careers, which are typically less remunerative compared to STEM careers.
Adding to this are the challenges of work-family choices, most women have to sacrifice their careers and pay a “Mommy penalty”, which has a far reaching impact on their career growth and advancement opportunities and hence compensation.
What’s the solution?
In my humble opinion, the first thing all of us need to do is stop fretting about such statistics and respect women’s choices. Women in most countries have to deliver on many more social expectations and conventions than men folks, hence a statistical data point like this demeaning in addition to being misplaced and inaccurate.
Furthermore, some of the seemingly women friendly benefits like maternity leaves are in effect defeating the purpose. For instance, most leading organizations I know of have maternity leave for 12-24 weeks, while paternity leaves vary between 5 and 20 days. Such differences further accentuate and strengthen the social expectations that women are the primary care giver to the new born. How about organizations offering increased number of paternity leaves, which allows women folks to join work earlier?
Well with greater awareness around the issue as well as on overall Diversity and Inclusion (D&I), most progressive organizations have fairly detailed gender focused D&I agenda, be it in terms of diversity ratios, career advancement programs, leadership development programs etc. As per Economic Times report, fierce battle for female talent erupts during the top tier MBA placement season as marquee recruiters—all keen to improve their diversity scores—prepare to swoop in on the limited women graduates. The excess demand for women in comparison to the gender ratio at top B-schools is likely to spark a war for female talent.
As reported by Economic Times, in February 2014, consulting firm Bain & Co—one of the biggest recruiters at Harvard, Stanford and Wharton—is likely to ensure 50 per cent of its US B-school hires are women. The mandate for India hiring is not very different. Last year, Axis Bank recruited only women from ISB's flagship post graduate in management programme. This was part of a special program called 'Diversified Leadership Among Women in Banking' that it runs at the B-school.
For the moment, most organizations don’t have stated policies for enhanced compensations for women employees; however as the war for female talent gets more fierce, I hope to see the tide turn in favour of women employees.
Disclaimer: The column does not represent the views of the organizations that author is associated with.