Gender pay gap linked to lack of women managers

Gender pay gap linked to lack of women managers

Equal pay ahead sign

A growing underrepresentation of women in manager positions, which coincides with the years in which women typically have children, is directly tied to the gender wage gap in the United States, according to a new report by Visier.

Managers earn on average twice as much as non-managers, according to Visier Insights: Gender Equity, based on an analysis of 165,000 U.S.-based employees from 31 companies. As men advance into management roles at a higher rate than women — because of factors that include women leaving the workforce or taking time out for maternity leave or caregiving and possible discrimination in promotion decisions — the gender wage gap increases, the report found.

At age 32, women earn roughly 90 percent of their male counterparts’ incomes, but the share declines to 82 percent by age 40. Eliminating the “manager divide” would cut the gender wage gap by nearly one third, the study shows.

“Every CEO should be looking at gender equity,” says John Schwarz, founder and CEO of Visier. “It turns out the gender inequity is not just a compensation issue, it is a problem of unequal participation of women in the higher-paying managerial jobs.”

According to the study:

  • 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 percent to 39 percent), the same age range in which women commonly have children.
  • Having the same representation of women in manager positions as men would reduce the gender wage gap to 10 percent across all age groups — an improvement most notable for the age 32 and older population.

To address the opportunity and wage gap, Visier recommends companies ensure that women and other underrepresented groups are on promotion slates, use blind screening to remove gender identifiers when selecting candidates for interviews and support equal-paid parental leave for men and women.