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HR gender pay gap fails to keep up with counterparts

Despite employing more women than men, HR is lagging behind other functions when it comes to closing the gender pay gap
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Mind the gender pay gap

HR may be the voice of the organisation for gender equality and pay equity, but research finds it is still lagging behind other functions when it comes to gender pay parity.

A study by executive pay comparison site The Pay Index finds the global executive gender pay gap in HR stood at 14% in September.

While this is a drop of 4.6% compared to The Pay Index’s initial findings in March 2018, where it was -18.6%, it is still 5.3% wider than the overall global senior executive gender pay gap of 8.7%, while the rate of reduction is lower than within other functions.

The combination of UK legislation combined with continual media coverage has firmly shone a spotlight on the gender pay gap, but more still needs to be done to work towards parity across all functions and levels

 “The relatively small reduction we have seen within the executive gender pay gap within HR is not consistent with our global data, which has shown us that the gender pay gap has halved in the last six months,” says Marvin Aristotle from The Pay Index, part of international human capital specialist firm Leathwaite.

 “The combination of UK legislation combined with continual media coverage has firmly shone a spotlight on the gender pay gap, but more still needs to be done to work towards parity across all functions and levels.”

HR gender pay gap

The Pay Index initially analysed the remuneration packages of almost 4,000 global executives in March and found a gender pay gap of -17.1. The latest study, which finds the global gap plummeting to 8.7%, included an increased sample of 7,708 executives earning more than $100,000 and based in 452 cities across 64 countries. Around half work in companies with more than 10,000 employees, 90% possess a Bachelors’ and/or Masters’ degree and 86% have worked 16 or more years in industry.

Impact of legislation

The UK witnessed the largest narrowing of the gap, falling from 21.5% to 12.2%. However, the US is trailing a blaze with the gap decreasing from 7.9% to 2% during the same period.

In April 2018 legislation forcing companies with more than 250 employees to publish annual gender pay and bonus data was introduced. In the United States, legislation was introduced in several states the previous year, restricting companies from asking prospective employees about their existing pay. According to The Pay Index, this has effectively given the country a six-month lead in the battle for pay parity.

The Good

In technology the gender gap has reversed in favour of women. Currently women receive 9.2% more versus March when men were paid 6% more than women. Among chief operating officer and operations executives, the gap is now almost non-existent, with women paid 0.1 % more versus March when men were paid 11.9% more than women. In risk the gap is also falling, with men currently paid just 2.1% more than women.

The Bad

The gender gap may have almost halved in sales, product, marketing and digital but senior men are still paid 8.6% more.

Meanwhile, in some sectors, pay favours women. In audit women receive 16.2% more than men, although this is down from 23.7% in March, while in information security women receive 11% more than their male counterparts. And in compliance, women receive 5% more than men.

The Ugly

In law the gap has fallen from 35.4% but men are still paid 29.1% more than women. And while the gender pay gap at CEO level has almost halved, male CEOs still receive 30.5% more pay than female CEOs.

Over in finance, tax and treasury functions, the gender gap has widened in favour of men. Executives in these functions currently get paid 7% more than women compared to 3.1% back in March.

“It’s well documented that companies are facing increasing challenges to attract and retain talent – at all levels – due to skills shortages, high employment levels and increasing job opportunities,” says James Rust, founder and managing director of The Pay Index.

“As such, companies with gender pay gaps will find it increasingly difficult to maximise their performance if they do not embrace pay parity. Pay parity is a positive thing for both individuals and business.”

14 November 2018

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