Despite an increased focus on Diversity, Equity and Inclusion (DEI) as part of Environmental, Social and Governance (ESG) commitments, women worldwide are expected to have significantly lower accumulated wealth than men at retirement. 

Solving the global gender wealth equity gap

The new global Wealth Equity Index (WEI) from WTW, in collaboration with the World Economic Forum, highlights that women upon retirement are expected to have only 74% of the wealth that men have, and that measuring wealth is key to solving the global gender wealth equity gap.

Global news source Forbes has shared WTW Managing Director, John Bremman's discussion regarding the WEI. Senior Director of the Integrated & Global Solutions team, Manjit Basi. was one of the team working on the Index. 

"While no single solution alone will solve the gender wealth gap, effective leaders employ a range of approaches to narrow it," suggests John. 

Acknowledging career gender inequities 

"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," says John.

Further key findings included: 

• The primary drivers contributing to gender-based wealth disparity include gender pay gaps and delayed career trajectories. Additionally, differences in responsibilities outside the workplace and financial literacy influence women’s participation in paid employment and impede their ability to build wealth.
   
• Wealth inequity is greatest for women in senior positions as they face the compounded effect of greater pay gaps and more limited career progression. For frontline operational roles, the overall gender wealth gap averages 11%; for professional and technical type roles, the gap nearly triples, averaging 31%; and for senior experts and leadership, it grows further to an average of 38%. 
   
• Caregiving responsibilities leading to part-time work and career breaks have negative impact on women’s ability to accumulate wealth. These caregiving responsibilities affect women disproportionately compared to men, lowering their rate of workforce participation and time spent employed. Such gaps in wage earning have the cumulative effect of lower wealth accumulation at retirement. Structural differences in statutory leave provisions related to childcare exacerbate the gender inequities.
   
• Retirement plans represent a significant component of accumulated wealth. All 39 indexed countries provide state retirement benefits, and some provide mandatory retirement benefits. Employer-sponsored plans also are prevalent. The index revealed the importance of employer-sponsored plans on wealth at retirement – and the impact of inequity between genders in pay, delayed career progression, caregiving and financial literacy. Research shows that, compared to men, women have different financial awareness, investor confidence and risk tolerance than men throughout their careers, compounding the effects of other factors on wealth disparity.

Purpose-driven leadership 

John highlighted that leaders can address the gender wealth gap through the following actions: purpose-driven leadership, culture and programs, pay fairness and sustainable wages, equitable career opportunities - access and sponsorship, inclusive benefits - access, flexibility and cost, and flexible work - access. 

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