Lack of female leadership roles contributes to gender pay gap

The wage gap between genders won't close for decades
By Alex Burden, Professional Development Editor

27 September 2016

A new report from workforce analytics and big data company, Visier has revealed what some people have secretly suspected all along – that women’s wages start to stagnate after less than a decade in the workforce. 

We have long been aware of pay inequity between the genders, and indeed it was only last century when women were granted the right to equal pay in 1970, but now we can pinpoint exactly when opportunities start to disappear, with the help of applied big data analysis.

Focusing on the American workforce, Visier found that women make 90% of men’s wages at 32, but this decreases to 82% by the age of 40. Managerial opportunities also start decreasing from the age of 32.

Lack of paternity leave, cost-effective childcare and the absence of flexible-working contracts contributes to this disparity if a female employee has a child; however, there are still noticeable effects on women who do not have children or leave the workforce.

Although there is probably not one definitive reason for the lack of women being promoted or hired into managerial roles, there are measures that individuals and companies can implement to redress the balance and take the lead as role models for their industries.

“At the current rate of progress young women starting work today will have retired by the time we close the gender pay gap – none of us can afford to wait that long,” Jemima Olchawski, Fawcett Society

Visier have gone as far as to say that addressing the under-representation of female managers could dramatically narrow the gender wage gap. Named as ‘The Manager Divide’, the intelligence company analysed huge datasets to demonstrate that removing this divide for women in their early 30s (typical age of having children), would cut the wage gap by over 30%.

They also add, that this is unlikely to be achieved any time soon: “The slow pace of improvement over the past 20 years indicates removing the gender wage gap entirely is more than a generation away.”

Further research by Deloitte has backed this up, revealing that the pay gap is not likely to close until 2069 and that stark differences in starting wages will lead to lifelong pay inequity.

They analysed ten popular occupations for graduates and found that for nine, men begin on higher average salaries, with a widening gap over time. The report stated that unconscious discrimination at work can also affect decisions about jobs and pay.

“At the current rate of progress young women starting work today will have retired by the time we close the gender pay gap – none of us can afford to wait that long,” said Jemima Olchawski, the Fawcett Society’s head of policy and insight.

“It turns out that gender inequity is not just a compensation issue, it is a problem of unequal participation of women in the higher paying managerial jobs,” John Schwarz, Visier

The Visier report found that manager wages, on average, are twice as much as non-manager wages, and that having equal representation of women in managerial positions would reduce the wage gap to 10% across all age groups.

“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 gender inequity is not just a compensation issue, it is a problem of unequal participation of women in the higher paying managerial jobs.”

Tackling the gap will require more female leadership schemes, or for companies to consider at least one female candidate for every manager vacancy, which could be achieved through blind screening applications (removing names and titles).

Visier also suggests the implementation of long-term programmes that begin during school years, aiming to remove gender bias associated with certain roles or career choices.


Female leadership development

We’re looking to run a professional development programme all female CAs in 2017 – if you’d like to take part please let us know by emailing us at pd@icas.com.

Topics

  • Leadership and management

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