Employer action needed to close European gender pension gap
Although little talked about, a key issue is that that, while women generally live longer, they also tend to have lower levels of savings as they are paid less.
Although the European Union’s substantial gender pension gap has been little discussed to date, finding ways to tackle it will help employers attract and retain female talent over the coming years.
These are the findings of research conducted by HR consultancy, Mercer. It put the gender pension gap at an average of 40% across the EU, although it found the situation varied widely from country to country. About half of European member states experienced gaps of 30% or more though.
Mandy Schreuder, the firm’s diversity and inclusion consultant, warned that the situation should be front of mind not only for governments and policy makers, but also for employers.
A key issue was that, while women generally live longer, they also tend to have lower levels of savings as they are paid less. This scenario, combined with career breaks to have children and look after other relatives, meant that female workers faced a “higher risk of retiring into poverty than their male counterparts”, she said.
“Companies that acknowledge and work to close this gap could reap the benefits of increased employee engagement and productivity,” Schreuder added. “Working to improve the financial position of its female workforce is not only key to protecting business productivity and improving female talent attraction and retention, it is also the right thing to do.”
The study also revealed that women continued to be significantly underrepresented at all levels of the workforce, with participation in EU countries on average 10% lower than for men. As a result, employers needed to boost their gender diversity efforts by implementing robust pay equity processes, supporting all employees through, and on return from, parental leave and the like.
To this end, Schreuder recommended that organisations diagnose their current situation by analysing recruitment, promotion and exit data in order to understand what was helping or hindering them from making progress, before introducing appropriate practices and processes to support female employees.
Such practices included providing workers with retirement or savings schemes customised to varying working patterns rather than the traditional full-time continuous service model – something that is offered by less than 10% of European employers today.