Report: 'Manager Divide' Widens Women's Wage Gap

Kathy Gurchiek By Kathy Gurchiek April 13, 2018
Report: Manager Divide Widens Womens Wage Gap

The wage gap for women age 40 and younger grew by 17 percent in 2017. They earned 79 cents for every $1 a man earned—a drop from 82 cents in 2016. For women over 40, there was no meaningful improvement, dropping to 73 cents in 2017 from 74 cents in 2016. Part of the reason is that more men than women become managers.

The "manager divide" is particularly relevant for younger women, according to a new report from Visier, a computer software company in Vancouver, Canada. It first reported on the divide in 2016.

Findings are based on data from more than 60 companies in its database; those firms represent 1.5 million U.S.-based employees.

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While women in their 20s are promoted at the same rate as men in that age range, men are more likely to be promoted into manager roles (18 percent versus 12 percent), Visier found. But it's not for lack of performance; women were 22 percent more likely than their male counterparts to achieve a top ranking.

Women generally start having children between the ages of 25 and 34, and the manager divide seems to kick in around age 32 for women. And since manager wages, on average, are about twice that of nonmanagerial wages, an underrepresentation of women managers contributes to the wage gap, noted Josie Sutcliffe, vice president of marketing at Visier.

[SHRM members-only toolkit: Managing Pay Equity]

Eliminating this divide and having pay equity in manager positions would reduce the gender wage gap by almost half for women over age 32, she said.

One way to counter the issue, some suggest, is to encourage parental leave among men. Maternity leave sometimes inadvertently creates a "mommy" career track that can hold some women back from career progression. However, the negative impact on women's advancement is eliminated when men also take parental leave, according to the report Getting to Equal 2018: When She Rises, We All Rise that Accenture released in March.

Company leaders have to take the lead in correcting pay inequities, Salesforce CEO Marc Benioff told CBS' "60 Minutes." 

"We're going to have to do this continuously … constantly monitor and keep track of that … But that's easy today. We run our company the same way every company is run with computers and technology and software," Benioff said in the interview slated to air April 15.

Some actions the Visier report recommends that organizations can take to promote pay wage equity: 

  • Look closely at the company's metrics to determine the percentage of female employees by department, role and location. 
  • Conduct a compa ratio, which is position-specific with a minimum, midpoint and a maximum pay range. If women have a lower-than-average compa ratio, pay decisions are likely not being made equitably, according to the Visier report.
  • Measure performance ratings by gender and compare them to promotion rates to identify any areas of bias.
  • Compare the percentage of female managers to male managers.
  • Measure promotions by role, department or location to determine if the percentage of women promoted to, or holding, manager positions is lower than that of men in manager positions. Consider a policy of having at least one woman and one underrepresented minority in a slate of candidates for every open manager position to be filled.
  • Change your hiring process to correct gender inequities. This could include implementing blind screening of resumes and banning salary history questions, which often put women at a disadvantage. 
Another practice that SHRM Online has reported on is to implement guidelines for how the organization determines compensation, such as by tenure, quality or quantity of work or other factors. 

Additionally, international assignments can help fuel the pipeline for female leadership, SHRM Online reported. These assignments traditionally have been given to employees in their 30s, 40s and 50s, but the percentage of women and men willing to move abroad decreases with age, especially so for women. However, 62 percent of women ages 26-35 are willing to take overseas assignments, according to a 2015 Mercer study. Consider sending high-potential employees on international placements after their first promotion, for example, or when they are put on a list of promising candidates. 

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