Income gaps are rising at alarming levels in India, with senior managers currently earning 11.7 times more than lower level employees.
Latest research by Hay Group found the pay gap has been growing, from 7.7 in 2008, to 11.7 in 2014.
Globally, the pay gap in salaries is rising in twice as many countries as it is falling (42 to 21).
Within the BRIC nations, the gap has grown in India and China, but there has been only a marginal increase in Brazil. On the other hand, the gap has decreased in Russia.
Lower level workers, per the report, comprised skilled manual, clerical, supervisor or graduate entry jobs, while senior managers were heads of departments or equivalent.
Said Ben Frost, consultant at Hay Group, “The job level pay gap has accelerated since the recession. However it is not purely a post-recession issue. This is a trend that has been building for the past 30 years, through economic boom.”
Added Amer Haleem, Hay Group India’s country manager for productised services, “The pay gap growth can also be linked to an intense talent war and increased competition for the few selected jobs available. This keeps the pay limited to a certain bracket.”
As a result, pay is going up for senior managers for skills which are in high demand and short supply, such as emotional intelligence, creative thinking and advanced judgement.
In addition, they are being asked to take on more responsibilities and more complex work.
Added Frost, “The potential for a large job pay gap to cause discontent among the workforce is huge. Organisations need to be transparent with employees and communicate why reward policies are in place.”