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The three key factors behind the gender pay gap

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The gender pay gap is not a new topic of discussion. In fact, it is something that makes headlines on a regular basis and, in procurement, is highlighted every year in the Procurement Leaders Salary Survey. The reasons why such a gap exists are often inconclusive and speculative at best.

 

Job role

 

Women’s salaries in procurement, on the whole, stand at an average of just 75% of men’s salaries by job role. However, at the buyer level, women earn more than 106% of their male counterparts, according to the survey. With this inequality reversed for the higher-level roles, at what point in the career does this pay inequality surface?

 

In the next role up from buyer, that of a regional category manager, women’s pay drops to 82% of men. Based on the report’s findings, there is one possible explanation for this: as women progress through their careers, the number of reports they have stagnates.

 

At the buyer level, the number of reports for both males and females is similar, but as people move on and up, this gap widens significantly.

 

“Considering that one of the strongest indicators of salary is the number of reports, the fact that men at almost all age levels oversee the work of a larger number of subordinates is particularly problematic,” explains Procurement Leaders’ research analyst, Alex Johnston.

 

Industry

 

Management experience may be one factor, but delving deeper into the salary survey data suggests there are other factors at play too.

 

Segmenting the pay of male and female procurement professionals by industry shows that there are some significant differences.

 

When looking at the overall average picture of salary data, the public sector and not-for-profit industry offer women the highest salaries, compared to their male counterparts, at 94%. At the other end of the scale, women can expect to earn just 67% of male salaries in the manufacturing sector.

 

While this data compares salaries of all female and male procurement professionals in a particular industry, when we look at industry salaries by job role average, the picture is even more stark.

 

In the business services industry women earn 137% of their male counterparts’ salaries when comparing like-for-like job roles, but just 75% when comparing across the industry as a whole.

 

This points to a trend that when women and men are in parallel roles in the same industry, women actually earn more than men. However, for the overall average to be considerably lower at 75%, the only explanation is that women tend to fill more lower ranking positions than men.

 

The question is, why are some industries more equal than others? Industries like business services and manufacturing are traditionally more male-dominated, and, despite efforts from the likes of the Manufacturing Institute’s STEP (Science, Technology, Engineering, and Production) Ahead initiative to encourage and recognise women in these industries, a gender bias appears to still exist.

 

Meanwhile, pay and promotion systems tend to be more structured in the public sector than in many private sector organisations, which could explain the greater equality here.

 

Geography

 

Geography is another factor at play here, with considerable differences found between nations. For example, In Denmark, women earn an average of 104% of men’s salaries, while in the UAE, they earn just 39%.

 

Surprisingly, in many Asian countries, women are earning significantly less than men. For many years, procurement was a largely female-dominated occupation in Asia, thanks to its traditional image as a back-office, administrative role.

 

“Many of the businesses in Asia are either private family-owned companies or small to medium enterprises (SMEs), which have evolved over time," said Christina Ooi, head of group procurement at Malaysia Airlines Berhad, in a recent interview.

 

"And so, over the years, businesses have expanded and evolved, women in these administrative roles have stayed on at the companies, and also evolved and progressed into the procurement roles we know today."

 

Despite this, on average, women in Malaysia earn just 46% of men’s salaries, rising to just 53% in Hong Kong.

 

Procurement needs to ask why this is happening and set a strategy to bring salaries into line. Women are valuable members of the a procurement team and can bring a different line of thinking that adds value.

 

If the function continues to allow these disparities to exist, it risks losing them to a different function.

 

Read part two in series, measures of job satisfaction, here

 

This article is a piece of independent writing by a member of Procurement Leaders’ content team.

Rachel Sharp
Posted by Rachel Sharp

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