A study found that the gender pay gap is still profound across sectors and widens as people move up the career ladder. This is according to a report released by the CFA Institute, titled ‘Mind the Gender Gap’, that analysed women’s participation, pay and other measures of public companies.
It notes the average ratio of median remuneration of women to men for the companies in their sample was 0.97, suggesting approximate gender pay parity. This is, however, different across levels. The median remuneration ratio of women to men drops to 0.52 for key managerial personnel (KMP) and 0.64 for directors. This means a woman holding a key management position makes just about half the money that her male counterpart makes.
“Therefore, it is likely that the median remuneration for an overall category such as employees masks the systematic differences among job roles, levels of seniority, or years of experience,” the report noted, adding, “The relatively low level of remuneration for women directors (64 per cent) compared with men can be explained by the fact that most of the women directors are independent directors mandated by law, and independent directors are typically paid less than executive director.
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The report also observed that even though the workforce participation of women has improved over the past decades, their representation is abysmally low as they move up in the hierarchy. “According to the ILO (International Labour Organization), top barriers to women’s leadership were related to discrimination and unconscious gender bias. The existing company processes, practices and structures are entrenched with unconscious biases and stereotypes,” it noted.
Career progression
Sectors with higher female workforce participation rate don’t essentially favour the career progression of women, according to the report. It noted that in terms of sectors, information technology companies had the highest female participation rates, at 30 per cent, followed by financial services companies at 22.4 per cent. At the same time, it showed that the career progression of women in these sectors is poor.
“Within financial services companies, women represent 21.7 per cent of employees and only 15.9 per cent of KMP, a difference of 5.8 percentage points. Within the IT sector, the difference is more pronounced, at 18.7 percentage points, with women accounting for 27 per cent of employees and only 8.3 per cent of KMP,” it observed.
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Industrial companies and FMCG (5.5 per cent) had the lowest female participation rates at 4.3 per cent and 5.5 per cent, respectively. While the former had 10.9 per cent of women in key management positions, of the FMCG companies surveyed for the report, none had any women in these positions.