New Delhi: It’s as good as it gets for senior managers in some booming Asian economies, who continue to get increasingly good hikes, while their clerical counterparts have not had that kind of luck. The pay gap between senior managers and clerical staff in India is not as wide as in countries such as Vietnam, Thailand and China, where the gross base salary of managers are over 10 times higher than their clerical staff in 2007. India ranks fifth out of 13 Asia-Pacific countries.
These are some of the findings of global management consultancy Hay Group’s Pay Gap Report in Asia-Pacific released on Monday. The report analyses data on compensation and benefits, pay comparisons, bonus, tax and cost-of-living information at all levels of employment, from unskilled work to senior management in 46 countries throughout Asia, North America, South America, Europe and Australia.
Human resources managers attribute the increasing salary gap between senior management and clerical staff to market demand and tight supply in management talent. “Compensation is the direct outcome of demand-supply ratio of skill sets. The demand for management graduates is exponentially higher than ordinary graduates, who are present in great numbers,” says Sanjay Bali, vice-president, HR, Samsung India Electronics Pvt Ltd.
The widening pay gap is also indicative of the divide in skills and capabilities between senior executives and clerical employees. “Companies are increasingly paying a premium to get the right people with right skills,” says Prabir Jha, global head, human resources, Dr Reddy’s Laboratories Ltd. “Skills that are routine or replaceable by technology will continue to draw poor compensation or hikes in comparison to value-added capabilities,” adds Jha.
The report reveals that between 2005 and 2007, the white-collar pay gap did not narrow in Asia, as against the Pacific countries of Australia and New Zealand, which followed the trends of mature economies such as the UK and the US. In countries such as India, China, Vietnam and Thailand, the pay gap has been steadily increasing over the past three years in tandem with economic gains.
“If we consider total salary, we expect this gap to be even wider as a variable pay. For instance, incentives such as performance bonus form a large proportion of managers’ pay in India,” Amitesh Mullick, country manager, reward information services, Hay Group India, said in the release.