Should HR Be Encouraging More Women To Save?
You have probably heard that men are paid more than women are paid over their lifetimes. But what does that mean? Claudia Goldin, a labor economist at Harvard, has researched the gender pay gap. She found that the gap persists for identical jobs. Female doctors and surgeons, for example, earn 71 percent of what their male colleagues make, while female financial specialists are paid just 66 percent as much as comparable men.
Men aren’t intentionally discriminating against women — far from it. Claudia spent a year interviewing male executives for a book about men and women in the workplace. A vast majority of them are fair-minded guys who want women to succeed. Linda Babcock, an economist, found that one reason for the discrepancy is that men are four times more likely to ask for a raise than women are.
Did you know that in 2016, women working full time in the United States typically were paid just 80 percent of what men were paid. The gap has narrowed since the 1970s, due largely to women’s progress in education and workforce participation and to men’s wages rising at a slower rate. Still, the pay gap won’t go away on its own. AAUW’s The Simple Truth about the Gender Pay Gap addresses these issues by going beyond the widely reported 80 percent statistic. The report explains the pay gap in the United States; how it affects women of all ages, races, and education levels.
What does this all mean when it comes to saving? According to the Chicago Tribune, women are taking on greater roles in personal and household finance. Experts say part of the reason for the change is that more women are earning their own money and becoming financially self-sufficient. Yet public policy lags in accommodating the evolving trend.
Laws written to help workers retire at 65 don't address the reality that most working women do not plan to retire at that age, if at all—a reflection of how lower wages have on the ability to save for retirement. For some women, caring for elderly parents or children keeps them in the home during key earning years, but longer life spans call for greater savings for retirement and health care.
Now is the time to think about how your organization communicates with its employees about saving. It’s clear that there’s a gender divide when it comes to savings and investments. A Bank of America Merrill Lynch report indicated that over 90% of large employers plan on implementing or expanding some type of financial wellness program. This is a promising sign for both employees and companies because these programs give employees access to financial education and guidance. They have also been proven to improve employee financial well-being. While financial wellness initiatives are becoming increasingly popular among employers, more needs to be done to ensure that women are included in the conversation, and that the language and messaging can appeal to everyone.
The process of helping people reach important financial life goals does more than help out individual employees - it also helps the organizations they work for. Companies have a vested interest in promoting financial wellness programs because it is linked to higher worker productivity, reduced absenteeism on the job, and reduced health care costs. In fact, workplace financial education programs have a high return on investment for corporations applying these programs.
So, the bottom line is employers should encourage women to feel more comfortable with the prospect of speaking with a financial advisor. You can do this merely by directing them towards someone who can provide them with tailored advice. Given that it can be a daunting move though for many, going a step further could support staff in taking that leap. You could consider providing information on what to expect, how to take the most amount of value away from the meeting, and typically expected rates.
This isn’t about turning every communication in your business into a ‘women-only’ one. But it’s evident that businesses could be doing more to create stronger financial literacy and confidence right across the board. With an ageing workforce, it’s highly likely that your staff have worries about how they’ll shape up financially in the future.
Have you considered rolling out an initiative to promote stronger financial well-being in your workplace? And how confident are you that your resources are inclusive? Contact us today with your HR questions. If we cannot meet all of your needs, we will put you in touch with an HR professional who can.