According to the World Economic Forum, it’ll take 108 years to close the gender pay gap. The Global Gender Gap Report also found that the second largest area of gender disparity is in economic participation and opportunity, at 42%. This and other recent studies confirm that the pervasiveness of gender inequality not only hinders women’s ability to advance, it’s also costing the entire global economy. According to McKinsey Global Institute’s latest research, the Australian economy could increase by a massive 12%, should women’s equality be promoted.
Gender Equality At Work Means Higher Earnings for Everybody
The World Bank revealed that gender inequality in the workplace could cost $160 trillion in lost earnings globally. In response, World Bank CEO Kristalina Georgieva asserted that “the world is essentially leaving $160 trillion on the table when we neglect inequality in earnings over the lifetime between men and women…This is a stark reminder that world leaders need to act now and act decisively to invest in policies that promote more and better jobs for women and equal pay at work.”
Quentin Wodon, World Bank economist and report author, recently stated that the “important message here is that everybody would benefit from higher earnings – not just women – and thereby the wealth that gender equality would bring. Because the higher the standard of living, the lower the poverty in the household, and from the household [level] to the country [level], there are huge benefits from [attaining] gender equality.”
The Gender Gap’s Ripple Effect
The real cost of the pay disparity goes much deeper than the widely known statistic about women earning on average 80 cents to every man’s dollar. The reason is that the initial wages that men and women start at have an important impact on retirement contributions, debt repayments, retirement income, and pay raises. Over a professional lifetime, the initial gaps between men and women lead to an enormous ripple effect.
Research has shown that evening out this pay gap would give the average American working woman enough money for 14 more months of child care. This same study found that pay equity would make it possible for female professionals to pay off their student loans in under three years.
Pay Equality Is More Than a Women’s Issue
Yet as the World Bank Group report shows, the pay gap between men and women is having a negative impact on families, communities, and the entire economy. Today, there’s plenty of evidence to suggest that pay parity is relevant and beneficial to people of all genders.
For example, Diversity Matters, a report by McKinsey, found that companies with the highest levels of gender, ethnic or racial diversity are 15% to 35% more likely to have financial returns above their industry’s average.
In addition, research shows that companies with greater gender equality are better able to attract and keep top quality workers. And a company that supports retention by fostering gender equity is more likely to reduce costs associated with advertising, interviewing and onboarding, as well as recurrent termination costs.
Retention is, of course, a major issue for today’s decision makers. The Conference Board C-Suite Challenge survey has ranked failure to attract and retain talent as their No. 1 concern. In today’s job market, highly qualified candidates are an increasingly rare commodity. To remain competitive, organizational leaders have been forced to focus their efforts on getting, engaging and keeping top talent.
Greater Diversity Boosts the Bottom Line
Advocates have long called on companies to implement hiring and promotion policies that facilitate greater gender equality. Today, a growing body of research is proving that diversity is also good for a company’s bottom line. Supporting women in the workforce is more than a social good, it’s an important business opportunity.
And in a job market that has gone global, businesses that develop policies meant to encourage more flexible work environments, work-life balance and a diversity of backgrounds and views are more likely to boost female representation at all levels. This International Women’s Day, let’s come together to #balanceforbetter in closing the gender pay gap.