ADP research reveals India’s progress in closing gender pay gap

• 21 Nov 2023
• TM Team
• 0 Comments

While the gender pay gap remains a global concern, India is making notable strides in addressing this issue, according to the ADP® Research Institute's People at Work 2023: A Global Workforce View report. The report, based on a survey of over 32,000 workers in 17 countries, reveals that pay rises in 2022 averaged 6.7% for men compared to 6% for women worldwide. However, India has shown progress on this front, with the gender pay gap being lower than the global average.

Indian men reported an average pay increase of 7.2%, while women saw their pay rise by 7%. Looking ahead to the next 12 months, Indian men and women expect their pay to increase by the same rate at 8% indicating that gender pay parity is becoming a reality in the Indian workforce.

A notable majority of survey participants (63%) expressed confidence in their company's advancement toward achieving gender pay equality over the last three years. This surpasses countries in the broader Asia-Pacific (APAC) region, with Australia at 34%, China at 51%, and Singapore at 31%. 

While men received slightly higher pay raises last year, they are yet more inclined than women to express dissatisfaction with their compensation. Only 25% of men believe they are fairly compensated for their contributions, whereas a notably higher 31% of women express contentment with their current pay. Moreover, 49% of all workers continue to feel they are underpaid, while only 17% feel they are overpaid.

Older workforce rewarded

Senior employees experienced significantly higher pay increases last year, with those aged 55 and above leading the pack, receiving an impressive average pay rise of 10%. In contrast, individuals starting out in their careers (in the 18-24 age group) received a notably lower average pay hike of 6%. Those in the 25-30 age bracket saw an increase of 7%, and the 35-44 age group and 45-54 age group received 8%. The pattern underscores India Inc.'s practice of rewarding senior talent for their experience and valuable skills.

This trend also carries over to expectations for upcoming pay rises, with employees aged 55 and above anticipating the highest average pay hike at 11%. In comparison, those aged 35-44 years and 45-54 years are expecting 9%, while those in the 25-34 age bracket projected 8%, and the youngest workers in the 18-24 age group anticipate the lowest at 7%.

Rahul Goyal, Managing Director, ADP India & Southeast Asia, said, "While rewarding experienced talent is essential, it's equally vital to meet the expectations of the youngest generation entering the job market. Ignoring the compensation needs of Gen Z could prove short-sighted, leading to low morale among younger employees and failing 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."

Leading the way on Diversity, Equity, and Inclusion (DEI) initiatives

What sets India apart is its significant improvement in Diversity, Equity, and Inclusion (DEI) initiatives over the past three years, leading the Asia-Pacific (APAC) region. 59% of respondents in India acknowledged enhancements in DEI initiatives over the last three years, again, surpassing APAC averages, with Australia at 42%, China at 57%, and Singapore at 35%.

While 24% of Australians and 21% of Singaporeans say their employer doesn’t participate in DEI initiatives, this falls to just 11% in China and 6% in India, a sharp contrast to 30% in Europe. This highlights India's commitment to fostering a diverse and inclusive workplace.

The most popular DEI initiatives among India Inc. employees are staff training at 54%, followed by awareness events at 45%. Additionally, 37% of employees favour initiatives that involve reviewing company demographics to identify areas for improvement and mentoring programs.

Rahul further added, "India's remarkable progress in narrowing the gender pay gap and advancing Diversity, Equity, and Inclusion (DEI) initiatives demonstrates our commitment to creating a more equitable and inclusive work environment. Despite the global challenges, India is taking significant steps towards fostering a dynamic and inclusive workforce. The trends we've observed in pay equity, DEI, and the rewarding of experienced talent demonstrate India's leadership in these crucial aspects of the workplace."

The positive outlook isn't limited to pay rises. Indian workers are increasingly optimistic about skills development opportunities, further emphasizing the commitment to providing equal growth opportunities to all employees. This journey of progress showcases India's improvement in addressing gender pay parity and the crucial role that DEI initiatives play in fostering a dynamic and inclusive workforce.