Gender Pay Gap in Female Manager Roles: Pursuing Equity on a Global Scale

by Sorina Faier Partner Editor Nine O’Clock

The persistent gender pay gap has been a longstanding issue that has led to socioeconomic disparities between men and women. Despite progress, one significant area where this gap persists is within female management roles. We aim to explore the reasons behind the lower earning potential of female managers in comparison to their male counterparts.

Reasons for Lower Earnings of Female Managers

1. Discrimination and Stereotypes. The primary factor influencing the gender pay gap among female managers is discrimination. Deep-rooted biases and stereotypes persist, leading to women being underestimated and undervalued in the workplace. This creates an environment where women are more likely to be overlooked for promotions and pay raises.
2. Occupational Segregation. Occupational segregation contributes significantly to the pay gap. Women tend to be concentrated in lower-paying fields such as education and healthcare. These industries have historical undervaluation and lack of investment, resulting in lower earning potential for female managers.
3. Lack of Negotiation. Studies have shown that women are less likely to negotiate their salaries compared to men. This reluctance often stems from societal expectations and self-imposed limitations. Without effective negotiation, women may find themselves at a disadvantage when negotiating salary and benefits, leading to lower earnings.
4. Work-Life Balance and Motherhood Penalty. The expectation and burden of managing work and family responsibilities disproportionately affects women, impacting their career progression and earning potential. Motherhood penalties, such as reduced hours, breaks in employment, or choosing flexible roles, contribute to the pay gap among female managers.
5. Unconscious Bias. Bias, both overt and subtle, can plague the workplace. Unconscious bias leads to preferential treatment for male managers, hindering the career prospects and earning potential of their female counterparts. Such biases prevent equitable pay structures and perpetuate the gender pay gap.

Pursuing Pay Equity for Female Managers

To achieve pay equity, several crucial steps must be taken:

1. Eliminating Gender Bias. Companies must establish policies and practices that actively combat gender bias and ensure equitable promotion and compensation processes. Encouraging training programs on unconscious bias can create a culture of inclusivity and fairness.
2. Transparency in Compensation. Employers should foster transparency by making their compensation structures and salary ranges known to all employees. Transparent pay practices eliminate the potential for salary discrepancies based on gender.
3. Equal Opportunities for Advancement. Creating a workplace environment that provides equal opportunities for advancement is pivotal. Employers should mentor and sponsor female managers, ensuring their progress is based on merit rather than gender stereotypes.
4. Promoting Work-Life Balance. Policies such as paid parental leave, flexible work hours and affordable childcare options can enable female managers to balance their professional and personal lives, minimizing the impact of the motherhood penalty.
5. Raising Awareness and Collective Action. Governments, organizations and the media play a crucial role in raising awareness about the gender pay gap among female managers. Collective action can pressure policymakers and employers to address the issue and implement long-term solutions.

While significant gender gaps exist worldwide and no country has yet achieved full gender parity according to the Global Gender Gap Index 2023, conducted by the World Economic Forum in 146 countries, there are countries that have managed to close at least 80% of their gap. In the top 5 are Iceland, Norway, Finland, New Zealand and Sweden. In the same ranking, Romania is placed on 88 out of 146, scoring less than 70% parity, far from other neighboring states.

The report weighs aspects like women’s economic participation (including the gender gaps in income, employment and leadership roles), educational attainment (with measures like literacy rates and educational enrolment), health and survival (such as life expectancy) and political empowerment (female representation in parliament, ministerial positions and years with a male or female head of state).

30.10.2023 / Editor, Andreea Dragan

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