Equity, Diversity and Inclusion

Wealth equity for women can be achieved. Here’s how

What are the factors that drive gender wealth equity?

What are the factors that drive gender wealth equity? Image: Freepik.

Manjit Basi
Senior Director, WTW
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Gender Inequality

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  • Gender wealth inequity is measured by the gap in accumulated wealth.
  • A new global index highlights the factors that drive gender wealth disparities.
  • Employers, governments and individuals can take actions to achieve equity.

Gender wealth equity is equal accumulated wealth at the end of a working career for men and women who commence their career with similar roles, skills and pay. Women are disproportionately affected by pay gaps and delayed career trajectories, family responsibilities and various life events (e.g. divorce and widowhood), and as a result tend to accumulate less wealth than men.

It’s increasingly clear that these differences have far-reaching repercussions for individuals, organizations as well as society as a whole. Despite an increased focus from business leaders on diversity, equity and inclusion (DEI) – and gender inequity in particular – gender wealth inequity has not been widely examined or exposed.

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Gender inequity is often seen through a single lens, focused on pay, career, pensions and longevity, or workforce representation. The reality is that the issue of gender inequity, and its causes and effects, are multidimensional and should be addressed as such. Over a career lifetime, women are presented with varying professional and personal challenges from early career to late career.

By focusing on wealth, we can consider the effects of many intermingled inequities, including pay, career progression, financial literacy and events that occur during a working lifetime. And we can measure through one metric – accumulated wealth at retirement. This allows us to shine a light on a critical, overlooked and under-researched aspect of gender inequity.

The Wealth Equity Index

The new global Wealth Equity Index from WTW, in collaboration with the World Economic Forum, explores the wealth accrued over the working lifetime of women in 39 markets. The index highlights the intermingled factors that drive gender wealth disparities for women relative to men.

The study found that at the end of a working career, women globally are expected to have on average only 74% of the wealth that men have. There’s significant variation across markets and regions but while the cultures, social structures and infrastructures examined are diverse, the underlying drivers of wealth disparity are the same.

These primary drivers contributing to gender-based wealth disparity include gender pay gaps, delayed career trajectories, family responsibilities (e.g. child and elder care) and differences in financial literacy.

Actions to achieve gender wealth equity

It is imperative that actions to champion gender equity broaden to look at economic wealth at the end of women’s working careers. There are many positive actions that can be taken by employers, governments and individuals.

What can employers do?

  • Support career equity and the representation of roles: intentional career enablement, mapping of career trajectories, pay transparency and skills architecture focused on developing women into managerial and leadership roles.
  • Build a pipeline for female talent: assess and eliminate unintended career progression barriers at lower levels of the organization.
  • Assess HR programmes and processes: understand which ones are contributing to gender pay gaps, and make improvements. For example, understand recruitment processes and initial compensation offers and how they may result in pay inequities.
  • Encourage financial literacy and confidence: facilitate financial resilience workshops and training with a focus on common traps that may befall women more than men (e.g., investing overly conservatively over a long-time horizon).
  • Ensure continuation of retirement savings contributions during career breaks: design and communicate retirement programmes considering gender diversity, to reduce the gender retirement gap.
  • Redesign caregiving benefits: encourage a fairer distribution of responsibilities between men and women and, where needed, enhance the support provided to women.
  • Promote flexibility in the workplace: post COVID-19 landscape has already transformed our collective view of working flexibly. Flexibility is needed to support working women in balancing career and caregiving responsibilities.

What's the World Economic Forum doing about the gender gap?

What can governments do?

  • Introduce statutory shared parental leave: to replace separately articulated maternity and paternity leaves which, by design, often encourage women to avail leave over men.
  • Require employers to report and disclose parental leave: including utilisation rates of benefits by gender.
  • Enforce legislation and disclosure requirements: including gender pay disclosure, pay transparency and significant representation of women on boards.
  • Establish and promote centralized accessible educational and financial material: to support women on their wealth journey and build investor confidence and financial literacy.

What can individuals do?

  • Empower women through financial education, pay advocacy and proactive career advancement: to improve their personal financial outcomes.
  • Men can be active allies: by acknowledging women’s perspectives, recognizing women’s achievements, and challenging discriminatory practices.
  • Men and women can lobby governments: and compel employers to make an impactful change.

Addressing gender wealth equity

There are many ways to address gender wealth equity but it requires the collective and focused effort of private and public players, including not only employers but also governments and public bodies, society at large and individuals who can drive positive change.

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The views expressed in this article are those of the author alone and not the World Economic Forum.

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