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Friday, March 4, 2016, 13:04

Salaries come under the spotlight


Anation’s competitive advantage depends on many factors, but arguably, the most important is having a fair society, and an effective barometer of fairness is how it encourages, nurtures and rewards female talent.

Remuneration for working women is rightly a hot topic. A gender-based pay gap exists and there is a clear need to close it in order to create more opportunities for women. That, in turn, will represent an additional resource to help improve each nation’s competitiveness.

On a company level, gender-based pay inequality is an issue that businesses can no longer afford to ignore. In the past 10 years, women’s participation in the workforce increased from 1.5 billion to 1.75 billion worldwide. Yet, overall, women’s earnings today are at the level of men’s 10 years ago in most countries, according to The Global Gender Gap Report 2015, published by the World Economic Forum.

Analysis of the gender gap from a demographic point of view shows a gender split (female: male) participation in the workforce across the Asia Pacific of approximately 45:55. Some markets, such as Singapore, the Philippines and Hong Kong are 50:50, while others are more skewed, such as India (30:70) and Japan (35:65).

From a pay-gap perspective, the average annual base pay for men exceeds that of women between roughly 15 percent (the Chinese mainland, Hong Kong and the Philippines) and 30 percent (Malaysia, India and Singapore) with significant differences across job grades.

Data at a country level shows a big gap for both management and professional positions with men incredibly earning up to 45 percent more than their female colleagues. The only exception in the region is Singapore, where women in managerial roles have an average base pay premium equal to 11 percent. The best practice is evident in Hong Kong and the Philippines where the pay gap is less than 10 percent.

How can organizations across the Asia Pacific lead the way to a more inclusive and equitable pay philosophy?

Clearly, no one solution works for all situations. But one thing that can be used across the board is to address employees’ needs and generate awareness about employers’ rewards plans and programs.

There should not be any gender disparity if companies’ pay philosophy and practice are designed to recognize top performers, and key talent. Nevertheless, women on average do indeed earn less than men.

A large part of the story is that men and women tend to do different kinds of work. Research has highlighted that, on average, women are most likely employed in functions with a less competitive pay level than others. Men, on the other hand, have jobs that tend to be related to the company’s revenue stream.

Participation in the workforce and job scope prove to be the main drivers for pay parity while also creating a truly inclusive working environment.

Recent findings — from a research project by Willis Towers Watson, titled Employee attitudes on inclusion and diversity: Examining the implications — show that a diverse and inclusive workplace contributes to an organization culture that ultimately, through more enlightened leadership and engagement, is associated with better financial outcomes.

This makes sense. As organizations look to alternative sources of talent — including women — those that provide the right pay, training and opportunities for advancement will draw the brightest and best from every demographic.

This will require effort but will also result in a big payoff. Companies that have already embraced pay equity among men and women in the same roles have reported a huge competitive advantage in the talent game, a more engaged and productive workforce, and better business outcomes.

To achieve this, companies need to look at their pay programs from a gender perspective.

Once pay disparities have been identified, the findings must be shared with leadership so that strategies for corrective action can be developed. A shore-up on pay where there are inequities and inconsistencies should be a priority and addressed through the regular overall salary budget.

These measures will effectively close the pay gap but also allow the company to understand why the gap exists in the first place.

There are several factors contributing to pay inequality. These include recruiting practices that exclude qualified female candidates because of the nature of the job, manager bias and workforce policies that are not conducive to women who have to balance their work and family life.

It is important to take a look at those policies and see what needs to change to enable a culture that supports equal pay practices and development opportunities for women. This might include flexible schedules that encourage a work/life balance, paid leave, programs that support adjustment in corporate life after maternity or other career breaks, and training and development plans that help women advance in the organization.

While these policies may seem to be cost intensive they can be self-financing as they allow each company and country to maximize its output by optimizing both genders’ abilities.

Sambhav Rakyan, data services practice leader, Asia Pacific, Willis Towers Watson and Gaia Gentili, practice leader, global data services for Singapore, Brunei, Vietnam, Willis Towers Watson.

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