Why financial education is key to driving pay equity
Financial education and pay equity
Organisations that focus on financial education help boost wellbeing and reduce financial inequity across their workforce.
New research shows the average salary gap between men and women is £12,752 by the age of 25 and £26,065 by retirement age.
This inequality not only means one in two women lose sleep due to financial worries, but a female graduate who decides to work part-time for just 3.7 years in her 30s will be earning 7.7% less in her 50s than if she had remained full time. This will eventually cost her £201,396 overall.
Most women are unaware of the long-term financial impact of short-term childcare decisions made after starting a family. Research shows that women have historically lacked the confidence needed negotiate a pay rise or proactively invest their money, in comparison to their male colleagues. So here are three things you can do to help reduce financial inequality across your organisation.
Three ways to reduce financial inequality across your organisation
1. Challenge assumptions
Despite initiatives such as shared parental leave, which just 2% of couples are utilising, according to the latest HMRC data, far too many women assume it’s their responsibility to become the primary carer for their children and work part-time, or do all the school runs, when this isn’t necessarily the case.
More than half of all men believe childcare should be shared equally and want to become more involved parents but are themselves at risk of slipping into gendered stereotypes. Research shows that ‘hands on dads’ are not only happier and healthier, but also 40% less likely to break up with their partner.
Instead of just providing maternity coaching, offer parental transition coaching to both men and women. The objective being to ensure both genders are given the opportunity to reflect on how they can create a sustainable work-family balance and share parental duties, so that no-one unnecessarily compromises their future career or income.
2. Break the taboo
As well as impacting on the division of childcare, gendered stereotypes mean that men are also more likely to be responsible for managing the family finances and making investment and saving decisions than women.
The result is that many women haven’t had enough experience in financial management, hence can lack confidence when it comes to making decisions about money and their finances. To break down this barrier, consider bringing women together in small groups to discuss their finances and share tips with each other. This could take the form of a webinar, facilitated by a professional, such as a financial advisor, who can answer any questions and give people the confidence to take more ownership of this important part of their lives.
You could also create a hub of financial wellbeing information, featuring articles, advice, guides, financial tools and calculators, for employees to explore and increase their understanding of what they could be doing to support themselves in this area.
3. Boost engagement
Overall, women experience greater financial anxiety than men (51% compared to 41% of men). Drivers of this could include the fear that they’re not doing the right things with their money or that they won’t have enough to retire on. So, another way to encourage employees to address these worries is to make financial wellbeing part of your overall wellbeing strategy, with education specifically aimed at helping women to understand how financial anxiety can undermine their health overall.
Provide access to resources, such as information, articles and case studies on everything from protecting yourself and your family to saving and investing to make your money work harder for you. Build analytics into the system, so you can monitor which articles are proving most popular to inform further initiatives. Be sure to include a mix of digital and face-to-face events to appeal to different learning styles.
The overall aim should be to create a culture where both men and women are just as likely to be asking each other if they know of any good funds to invest in, and which pension funds are performing well, as they are to be talking about baby-led weaning. With resources and tools in place, everyone knows how to go about accessing the expert advice they need to make decisions based on their unique circumstances.
This week’s blog is written by co-founder of Parent & Professional, Helen Letchfield.
Parent & Professional Teams Up with Schroders Personal Wealth
Financial Wellbeing for Parents Webinar
With increasing inflationary pressures and rising energy prices, it is important that we start to talk more openly about our money and ensure we have a plan in place which aims to support our future goals.
Key considerations for starting to plan a family, planning for a child’s future and continuing to plan for your own future are three of the questions that we look to address in our 1-hour webinar: Financial wellbeing for parents.
P&P Co-Founder Helen Letchfield will draw on the expertise of a panel from Schroder’s Personal Wealth to provide your employees with practical and easy ways to plan and manage their family finances.
Make financial wellbeing part of your overall wellbeing strategy, with education specifically aimed at helping parents to understand how financial anxiety can undermine their health overall. Would you like to run this webinar in-house? For more information and costs to run this webinar in-house, contact: helen@pandpcoaching.co.uk