American economist Claudia Goldin, Nobel Prize winner, through her research established that women are “vastly underrepresented in the global labour market and, when they work, they earn less than men.”
While her research was broadly based on the gender gap existing in the US, skewed gender pay remains a global problem. However, India is making giant strides in overcoming it. Male workers in India saw wages increase by 7.2% on average in 2022 compared with 7% for women, according to a report released by ADP Research Institute.
Compared to the worldwide average - wage increases in 2022 would average 6.7% for men and 6% for women – India has made progress in this sphere with the gender pay gap being reduced, according to data by the ‘People at Work 2023: A Global Workforce View’ report.
Looking 12 months ahead, both Indian men and women expect their salary to rise at the same rate of 8%, reflecting that gender pay equality is coming close to becoming an achievable reality in the Indian workforce.
The report, based on a survey of more than 32,000 workers across 17 countries, shows that nearly 63% of the Indian survey participants expressed confidence in their company's advancement toward achieving gender pay equality over the last three years. This revelation outnumbers countries in the Asia-Pacific (APAC) region, with Australia at 34%, China at 51% and Singapore at 31%.
Despite having slightly higher pay increases than women, the male employees surveyed are more likely than female employees to voice dissatisfaction with their salary. Compared to 31% of female employees, just 25% of male workers said they felt their pay was fair. Overall, 49% of employees responded they still believe they are paid too little, while 17% stated that they are overpaid.
In India, senior employees saw a large gain in compensation compared to the younger workers with those aged 55 years of age and older reported an average salary increase of 10% last year. However, the average salary increase for workers in the 18–24 age bracket was only 6%. The average increase for individuals in the 25–30 age group was 7%, whilst the increases for those in the 35–44 and 45–54 age groups were almost 8%. The pattern emphasises how India Inc. pays senior professionals for their experience and valuable skills.
This trend also carries over to expectations for upcoming pay increases with employees 55 years of age and older anticipating the highest average salary raise at 11%. Comparatively, workers in the age groups of 35–44 years and 45–54 years anticipate an increase of 9% while workers in the 25–34 age group expect 8% increase on average, and the youngest employees age group in the 18–24 bracket anticipate increases of roughly 7%.
“While rewarding experienced talent is essential, it’s equally vital to meet the expectations of the youngest generation entering the job market,” says Rahul Goyal, managing director, ADP India & Southeast Asia, while adding, “Ignoring the compensation needs of Gen Z could prove short-sighted, leading to low morale among younger employees and failure to engage with the next generation. Embracing and meeting their expectations at the workplace is not just an immediate concern but a strategy for long-term success.”
Further insights from the report reveal that India has also shown significant improvement in DEI (diversity, equity and inclusion) initiatives over the last three years, which has brought it to the top of the pack in the Asia-Pacific (APAC) region. Nearly 59% of Indian respondents shared that they have seen improvements in DEI programs over the last three years, compared to 42% in Australia, 57% in China, and 35% in Singapore.
While 24% of Australians and 21% of Singaporeans reported that their employers don't partake in DEI activities, the percentages in China and India are far lower at 11% and 6%, respectively, a sharp contrast to 30% in Europe.
Additionally, Indian workers are becoming more optimistic about their chances for skill development and are highlighting the willingness of employers to provide everyone equal growth opportunities.
Earlier this year, in alignment with further progress for women employees, even Deloitte India in its ‘Women @ Work’ report revealed that women in India experienced fewer non-inclusive behaviors in 2023 than in 2022. The instance fell by almost 10% points to 48%. Amongst those who did experience such behaviours, reporting of microaggressions more than doubled. The most commonly experienced non-inclusive behaviour was being interrupted or talked over during meetings. Similarly, there’s a sharp drop in women reporting a lack of exposure to leaders, or feeling excluded from meetings, decisions, and informal interactions.
“Workplace dynamics are beginning to solidify after three years of pandemic-driven disruptions… However, the interplay among these factors will challenge employers to get creative,” says Nela Richardson, ADP chief economist.
