U.S. Study on Gender Pay Equity Discovers New Key to Closing the Gender Wage Gap: The Manager Divide
Analysis uncovers definitive link between the underrepresentation of women in manager positions and the gender wage gap in US enterprises
SAN JOSE, CA and VANCOUVER, BC – June 21, 2016—A new study from Visier, the leader in Workforce Intelligence, has found that mothers in the US continue to pay the price in career advancement and wages for starting a family. The Visier Insights™: Gender Equity report, published today, uncovers a direct correlation between the Manager Divide, a growing underrepresentation of women compared to men in manager positions from age 32 onwards, and a widening of the gender wage gap for large US employers. The report finds that eliminating the Manager Divide, which coincides with the years in which women typically have children, would cut the gender wage gap by nearly one third.
“Every CEO should be looking at gender equity,” says John Schwarz, Founder and CEO, Visier. “Countless studies have shown the equal economic contribution women make in the workforce, yet companies have struggled to achieve the goal of equity in compensation. With this Visier Insights report—made possible by the contribution of our customers to our unique workforce database—we give leaders the factual basis on which to implement programs that can accelerate gender equity. It turns out that the gender inequity is not just a compensation issue, it is a problem of unequal participation of women in the higher paying managerial jobs.”
The Gender Wage Gap
Numerous studies highlight that the gender wage gap cannot simply be explained as “unequal pay for equal work.” Rather, they have proven gender pay inequity to be a systemic challenge where women as a whole earn less than men on average, and do so across education levels and occupations.
As discovered by Visier Insights, the gender wage gap is driven by the Manager Divide: gender inequity in manager positions that is closely tied to the childcare years, when women experience increased demands from their home life.
“Having a child shouldn’t undermine the earning potential of women, but our study shows that it still does,” says Schwarz. “I believe employers today have good intentions to achieve gender equity, but have been lost in chaotic and conflicting data sources. Business leaders need to be making decisions based on confident knowledge, not on guesswork. We at Visier are on a mission to enable that.”
Key Report Findings
Based on analysis of a workforce database representing dozens of large U.S. enterprises, the Visier Insights study found:
- There is an increase in voluntary turnover and a pronounced dip in the percentage of women in the workforce between the ages of 25 and 40 (from 43% to 39%), the same age range in which women commonly have children
- The gender wage gap widens at age 32, starting with women earning 90% the wages of men, and decreasing to women earning 82% the wages of men by age 40
- Women are underrepresented in manager positions from age 32 onwards—the same age at which the wage gap between men and women broadens
- Manager wages are, on average, 2 times that of non-manager wages
- Having the same representation of women in manager positions as men would reduce the gender wage gap to 10% across all age groups — an improvement most notable for the age 32 and older population
Slashing the Gender Wage Gap by closing the Manager Divide
There are a number of important steps employers can take to make meaningful progress towards closing the gender gap.
- Implement the Rooney Rule: for every manager position you have open to fill, consider “at least one woman and one underrepresented minority” in your slate of candidates
- Implement blind screening, removing names (or other gender identifiers) from resumes when selecting candidates for interviews
- Increase measurement and awareness of gender equity in the rollout or implementation of HR policies, including compensation policies
Additionally, leaders, workers, and community members alike can work to eradicate the gender wage gap:
- Support meaningful paid parental leave that is equal for both men and women
- Ensure it is socially acceptable for both men and women to take time off to care for their children
- Support programs that increase the availability of good quality affordable childcare for all parents
- Ensure it is socially acceptable for both mothers and fathers to make use of flexible working time arrangements to care for children
- Develop and support long-term programs—starting in grade school, throughout high school and college—aimed at removing the gender bias and social taboos associated with career choices
Do you have more ideas? Share them with @Visier or use #VisierInsights.
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