The real gap: fixing the gender pay divide

A gender pay gap exists — just not in the way conventional wisdom holds.

Two colleagues sitting near each other in the same office may be good enough friends to talk frankly about most matters, including their common jobs. But when the topic turns to pay, should she be seething at the thought that he makes more money just because he’s a guy? After all, the headlines proclaim there’s a gender pay gap where women typically earn 20% less than men, right?

Not exactly. New Korn Ferry Hay Group research shows that male-female pay disparity isn’t exactly as commonly portrayed. Tapping into its database of more than 20 million salaries at 25,000 organizations in 100 nations, the firm found that the gap is remarkably small—as low as 2.7% in France, for instance, or 1.4% in Australia across the globe, or .8% in Britain for like positions. The disparities the research found can be pegged to women still not getting access to the highest-paying jobs.

The study shows that gender pay disparities all but disappear if comparisons are made like for like, looking at individuals doing the same function in the same company.

To be sure, this data did not cover the United States. But in many countries, men and women doing the same job, in the same function and company, get paid almost exactly the same, the firm finds.

Instead, the gender pay gap, Korn Ferry Hay Group research finds, is rooted in other causes: As a demographic group, women get paid less than men. That’s true still. That’s because they still aren’t getting to the highest-paying jobs, functions, and industries, while men thrive in all three.

When the firm examined the overall, average pay gap?say, in the three nations where the like-for-like differences by position seemed to be negligible?the disparities soared: They were 28.6% in Britain, 23.7% in Australia, and 17% in France.

The study underscores how critical it is for societies and companies to redouble their efforts to close the gender pay gap and to reap even more benefits from the 50% of the workforce that now goes underutilized.

"Organizations can better support women's progress in many ways," said Peggy Hazard, Korn Ferry Hay Group’s managing partner and co-lead for Advancing Women Worldwide Solutions. "Our research shows one key way to achieve wage parity is to ensure more women advance to senior managerial levels, including to CEO, board director, and C-suite executive positions. To get women there, we need to ensure that early, and throughout their careers, they receive mission-critical and complex assignments?and that they receive candid feedback about their performance. Both of these are essential to build the skills, experiences, and attributes most valued at the top."

She also said more women should be encouraged to enter higher-paying fields of science, technology, engineering, and medicine.

Companies also must ensure that their talent pipelines work, and that women don’t get stuck in lower-level posts due to “headwinds” or impediments to their progress, said Benjamin Frost, the firm’s global product manager for pay.

“We know that women encounter all manner of obstacles, big and small, that are specific to their gender, and that block their progress,” Frost said. “Companies need to eliminate these ‘headwinds’ in such things as their male-aggressive culture, maternity-leave policies, and practices for excessive moves and transfers. Improvements here can benefit women and their companies.”

Download the PDF