Presentation on "closing gender pay gaps", from UNDP's 3rd global forum: business for gender equality, which took place in Panama City November 21-23 2016. Presentation by Ben Frost, Global Product Manager at Korn Ferry Hay Group. You can find our full whitepaper, which includes practical advice on closing the pay gap, and a deeper dive into our data, here: http://bit.ly/2ggRYRH

1. Closing gender pay gaps
Ben Frost, Korn Ferry Hay Group
November 21st 2016

2. © 2016 Korn Ferry. All rights reserved 2
IT ISN’T ROCKET SCIENCE,
BUT IT IS SCIENCE.
Korn Ferry knows more about human
performance in the workplace than any
other organization.
One candidate
placed every
3.5 minutes
100,000
people
developed in our
leadership
programs
each month
Assessment
data on
3M
professionals
Roots dating
back to
1943
Reward data
on
20M
professionals
Management
data on
114
countries
50+
books
published
Partner to
93% of
FORTUNE 100
Engagement
data on
6M
professionals
7,000
colleagues
© 2016 Korn Ferry. All rights reserved 2

3. © 2016 Korn Ferry. All rights reserved 3
Our Pay Data – Key Figures
Countries where we collect and
provide pay data.
Job holders for whom we
have salary data in 2016.
Organizations in our pay
database worldwide
of the Fortune 500 use our pay
data, and contribute to our
database.
Job holders for whom
we have gender (as
well as salary) data.
Countries in our most
recent analysis of the
gender pay gap
Headline gender pay
gap in the average
country.
110+ 70%
20m+ 9m+
33 17.6%
25,000

4. © 2016 Korn Ferry. All rights reserved 4
Comparing people at the same
level, average gap is
6.5%
What does our data say?
We analyzed 33 countries (small and large, emerging and
mature economies, from all over the world) – covering more
than 8.7 million employees (>3.3m women) where we have
job, pay and gender data.
Average ‘headline’ pay gap
(average female vs average
male salary) is
17.6%
Comparing people at the same
level and in the same
company, average gap is
2.2%
Comparing people at the same
level, in the same company
and same function, average
gap is
1.6%The trend is exactly the same for every country
we analysed.

5. © 2016 Korn Ferry. All rights reserved 5
What does our data say?
The deeper we drill into the data…
Total pay gap across all job levels Same level pay gap Same level and company pay gap Same level, company, and function pay gap
Australia
Germany
Turkey
Brazil
Russia
UK
South Africa
24.9%
23.7% 25.3%
28.6%
4.5%
9.8%
2.5%
3.7%
3.3%
1.4% 8.0%
9.3%
1.4%
2.6%
0.1%
0.8%
29.8%
15.3% 5.0% 1.6%
...the smaller the pay gap gets
15.1%
3.6% 3.1% 3.0%
11.3% 7.1% 2.0% 0.7%

6. © 2016 Korn Ferry. All rights reserved 6
In other words – when you compare salaries for
men and women doing the same jobs (same
level, same function, same company), there is a
negligible pay gap
What does our data say?
Hay Group Reference level – <10 = manual; 11-14 = lower professional;
15-17 = mid professional; 18-21 = manager; 21+ = executive
This is because men
and women aren’t
doing jobs at the same
levels and in the same
functions – the
distribution is very
uneven.
But when you compare
average salaries for
men and women, there
is almost a 30% gap.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0 5 10 15 20 25 30
Percentage of employees who are
male, by job level, U.K., 2014

7. © 2016 Korn Ferry. All rights reserved 7
Companies look for a balance between:
 Pay systems that enable the business to:
− Recruit the right people.
− Keep people in the business.
− Motivate good performance.
− Reward good performance.
 Pay systems that are flexible enough to allow
business leaders to take the pay actions they
need to.
 But, to do all this in a cost effective way –
with a focus on the amount of reward
spending, and the return this generates.
 But, with enough structure and rigor to ensure
equity and fairness.
What are the main challenges for companies to establish their
pay structures?

8. © 2016 Korn Ferry. All rights reserved 8
How do you work with senior management to develop strategies
to mitigate gender pay gaps in a company?
 We encourage companies to think holistically.
− This is a female representation issue as much as a pay issue – so organization and job design, talent
management, assessment and development are all part of the solution.
− We need to think about them as interconnected issues (with the shared aim of helping advancement), rather
than separate things. This will help create clear and visible career paths, that are open to all.
 An objective approach to selection, development and reward.
− Wherever possible, companies should choose objective, data/science driven ways to make decisions, rather
than subjective decisions made by managers.
− For example, defining the competencies needed to be successful in specific roles, and using assessment tools
to select candidates. This helps ensure that the best candidates are successful, and minimizes subconscious
bias.
 Design structures and processes to minimize the risk of bias.
− Recognizing that most front line HR decisions are made by line managers, who often act “in the moment”. So,
designing away the ability for managers to make decisions that may introduce bias.
− Developing organization grade structures that do not introduce bias – for example by requiring jobs to be
clearly different if they are to be in different pay grades.
 A data driven approach to pay gaps
− Frequent pay analysis/audits - to understand where gaps exists, whether they can be justified, and how to
address them if not.

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What are the main tools used to close the pay gap between men
and women in a company?
 The first step is an equal pay audit, to identify and understand the reasons for pay gaps.
 Then, depending on the gaps:
− People doing the same job, being paid differently. ‘Equal pay’ issue.
− These cases need addressing immediately
− People doing jobs at the same level, being paid differently. ‘Equal pay for work of equal value’ issue.
− Can these gaps be justified? For example, does the market supply/demand require a premium for certain jobs?
− If so, keep checking this! Pay markets change all the time, and jobs that once justified a premium may not do so forever.
− If there is no justification based on the market, gaps need to be addressed.
− Overall, the fact that men earn less than women on average. ‘Gender pay gap’ issue.
− We see this as a “representation” issue (fewer women at senior levels and in high paying functions).
− We help organizations review policies to ensure they have a level playing field in recruitment, assessment, high
potential identification, promotion, development and reward.
− We help organizations develop their Employer Value Propositions (EVP) – to make them more attractive employers
to women.

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What recommendations would you give to a company that has
existing pay gaps?
 A few headline recommendations:
 Review HR policies for recruitment, promotion, development, and pay decisions – to ensure they
are not unconsciously biased.
− Lots of seemingly simple and unquestioned HR processes create a non-level playing field. For example,
individual salary negotiation (especially for lower level jobs) can introduce pay gaps, because men are more
likely to negotiate. Or, job descriptions that outline the ‘ideal’ rather than ‘realistic’ candidate, may discourage
women from applying.
 Take steps to understand why there are fewer women at senior levels, and what can be done to
remove blocks to female advancement.
− Men and women graduate from university and enter professional careers in roughly equal numbers. But
women do not reach senior management in anything like the same numbers as men. Why? Where do
women stall in their advancement? And why is that?
 Be open in communication – show good intentions to close pay gaps that exist today; and show
commitment to introduce policies that ensure fairness and prevent bias.

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