This article has been contributed by Chetna Gogia, Chief Human Resources Officer, GoKwik.
Women on average are paid about 20% less than men globally, and in India, the gap is estimated at 34%. The vibrant startup ecosystem prides itself on innovation and agility, yet it faces a familiar challenge: the gender pay gap. Brands need to have a solution-oriented approach to ensure fairness.
Recent data from the Indian startup sector reveals that while salaries for both genders are rising, men’s salaries grew about 29% versus 22% for women. As roles become more senior, the gap widens: the median salary gap between men and women was recently 46%, and at the top 5% of earners, the gap surged to a staggering 70%. Closing the pay gap is not just a matter of justice – it’s also good business. Research indicates that companies with greater gender diversity tend to outperform those with less diversity, thanks to improved innovation, decision-making, and employee morale. In fact, firms in the top quartile for gender diversity are 15% more likely to have financial returns above their industry median.
For startups striving to scale, tapping the full potential of the talent pool is critical. Pay inequity can dampen morale and lead to talented women seeking opportunities elsewhere, which ultimately hurts a startup’s competitive edge. Addressing these disparities is both an ethical imperative and a strategic necessity.
The Role of Pay Transparency in Bridging the Gap
Around the world, organizations are experimenting with policies to bridge the gender pay gap. A standout theme in these global best practices is transparency.
One of the most impactful steps Indian startups can take is to implement pay transparency in some form. Pay transparency means clarity about how pay is determined and, to varying degrees, openness about who earns how much.
This doesn’t mean every startup must publish all salaries publicly on day one. Transparency exists on a spectrum – even internal transparency (where employees can see the salary ranges or bands for roles) can foster trust and accountability. Studies show that higher pay transparency correlates with smaller gender pay gaps.
Companies with fully transparent pay practices (including openly sharing individual salaries) have essentially a 0% adjusted pay gap between women and men in the same roles. Even looking at overall (non-adjusted) gaps, organizations with full pay transparency have about a 15% gap, significantly lower than the ~22% gap at firms with no transparency. In fact, full pay transparency can reduce the gender pay gap by over 50%.
The reason is straightforward: when compensation is open, any unjustified disparity stands out and can be questioned. This encourages management to be proactive in fair pay practices. It also empowers women (and all employees) to negotiate based on data, not assumptions, and to seek employers who value fairness.
However, transparency alone isn’t a silver bullet. It works best alongside broader diversity and inclusion efforts. Even the most transparent company may still show a pay gap if, say, women are primarily in junior roles. That’s why pay transparency should go hand-in-hand with initiatives to mentor and promote women into leadership, create flexible work policies that support career continuity, and train managers to recognize and counteract unconscious bias. The goal is a level playing field where everyone has equal opportunity to rise – and their compensation reflects their contribution, not their gender.
Ashwini
So What Next?
Startups can take action today to move toward pay equity. For instance:
- Conduct a Pay Audit: Regularly review pay scales to identify any gender-based discrepancies. Look at median salaries by role and level to spot gaps. We have always been mindful of this at GoKwik, ensuring there is no pay disparity.
- Establish Clear Salary Bands: Create standardized salary ranges for each role and experience level. Ensure these bands are based on market data and are applied consistently, regardless of gender. Share these ranges with your team so everyone knows the framework guiding pay decisions. Another practice we deeply and consistently follow – competence is what we continue to measure compensation on and ensure people get paid for what they bring to the table.
- Promote Pay Transparency Gradually: If full transparency feels too drastic, start by increasing openness in stages. For example, you might first share anonymized salary ranges internally. A process we have been incorporating in GoKwik always.
- Train Managers on Fair Pay Practices: Equip those who make compensation decisions with training on avoiding bias. Simple checklists or tools can help ensure that during hiring, promotions, and raise cycles, decisions are based on merit and market factors, not influenced by gender or other biases. At GoKwik, we ensure this happens, we also continue to motivate our teams to have a good balance of all genders in the team. Our leadership is also comprised of a healthy balance of both genders, further ensuring the value of performance over everything else.
- Encourage an Open Culture: Foster an environment where employees feel safe to discuss compensation concerns or ask how pay is determined. When questions do arise, respond with transparency and a willingness to adjust if something is unfair.
Building an Equitable Future
The conversation is shifting from “Why does the gender pay gap exist?” to “What are we doing about it?”. In the Indian startup ecosystem, known for its innovation and bold thinking, tackling wage disparity should be seen as the next frontier of innovation – innovation in organizational culture and people practices. By learning from global best practices and tailoring them to our local context, we can make meaningful progress. Pay transparency, in particular, offers a practical path forward: it’s a solution that shines a light on inequities so we can address them collaboratively and constructively.
All have a role to play in this change. The challenge of gender pay equity can be met with the same entrepreneurial spirit that drives startup success. With a balanced perspective, a commitment to neutrality and respect, and a focus on actionable solutions, the Indian startup community can take confident steps toward closing the gender pay gap. The result will be not only a more just workplace for women but a more thriving and innovative ecosystem for everyone.
Jeenal Jain
