A new global Wealth Equity Index highlights the intermingled factors that drive wealth gender disparities for employees at retirement. Despite an increased focus on diversity, equity and inclusion (DEI) as part of ESG commitments, women worldwide are expected to have significantly lower accumulated wealth than men at retirement.
With thanks to WTW’s Manjit Basi, the index (which looks at working lifetime accrued wealth in 39 countries) reveals that women are expected to accumulate only 74% of the wealth that men do upon retirement. While boards, companies and governments globally have acknowledged career gender inequities such as the gender pay gap and the underrepresentation of women in board and leadership roles, and are making progress closing these differences and creating more equitable opportunity, the wealth gap continues.
Other key findings include:
These factors also impact business performance in other ways, such as worker availability and productivity, skill shortages, supply chain disruption, cost management and reputational damage. However, most organizations (82%) only moderately assessed their reputation and ESG risks.
Leaders can address the gender wealth gap through the following actions:
01
Effective leaders employ a culture of workplace dignity that drives physical and psychological safety across three dimensions: At work, employees are physically safe and treated with respect in an environment free from marginalization; psychological safety enables them to be themselves, voice concerns and be heard. In work, employees take pride in what they do because it is valued, and they see a future where employers prioritize reskilling and career-long learning. From work, employees feel respected because they are paid what they are worth, are confident in their benefits to provide the security they need and have the wellbeing to thrive now and in the future.
02
Because income drives wealth outcomes, job security and wellbeing, effective leaders strive to pay people fairly and sustainably. This includes setting pay positioning strategies to ensure wages enable employees to thrive and reduce risks such as poverty and food insecurity.
03
As career progression and access to skilling opportunities drive income and wealth, effective leaders adopt a new mindset about careers. They create greater advancement opportunities for female workers. They also build talent ecosystems encompassing alternative work models, broadening approaches to talent sourcing, and developing leader and manager capability. These actions drive outcomes associated with income, education and employability.
04
In recent years, the role of employee benefits has driven gender wealth outcomes, especially in the areas of health, savings and caregiving support. Effective leaders understand that lower-income, front-line employees often have different needs than higher-paid salaried workers. Effective leaders maximize cost-effective access to savings programs and incorporate choice, personalization and financial literacy wherever practical.
05
Work flexibility drives increased wellbeing, resilience and wealth outcomes for employees across all income categories. Effective leaders provide flexible work and shift schedules, modified work weeks and enhanced leave programs. They support programs such as on-site or near-site health clinics, expanded family leave and telehealth. This also benefits employers by providing access to broader talent pools.
While no single solution alone will solve the gender wealth gap, effective leaders employ a range of approaches to narrow it.
A version of this article originally appeared on Forbes.com on July 18, 2022.
