According to the World Economic Forum’s latest Global Gender Gap Report, there is a 41.9 percent “economic participation and opportunity gap” between men and women globally. Even in developed economies, women continue to receive just $0.80 for every dollar a man earns. Women of color earn even less.
The question is, “What can be done about the gap?” That’s what INSEAD professor Natalia Karelaia set out to discover during the Women at Work conference held on INSEAD’s Singapore campus in March. She led a lively discussion that integrated research into the next steps organizations could take.
Microfinance Loans Need More Flexibility
Often touted as one of the best market-based solutions to help the poor in developing countries, microfinance loans don’t have the intended empowering effect. The problem is that not all recipients are “entrepreneurs-in-waiting,” and the low ceilings typically placed on the loans stop them from making a real difference.
Instead, microfinance institutions need to offer more flexible funding and a wider range of financial products to meet everyone’s needs better. An example highlighted in the article is, “providing the infrastructure to connect women to markets and the resources for improving productivity might be equally important.”
Women Have the Same Motivations as Men
Due to gender stereotypes that place men as the breadwinners and women as the “stay at home” caretakers, organizations assume there are different motivations for men and women in the workplace. According to research by Professor Elizabeth Baily Wolf, companies assume women are less extrinsically motivated than men, particularly when it comes to money. But this is not the case.
Wolf found that women’s self-reported level of money motivation is a little bit higher than that of men. If companies could recognize that gender differences are overblown, they could start to work against their justification and perpetuation of the gender resource gap.
Trial Runs Narrow the Gender Gap
If a female candidate has the opportunity to demonstrate her “high performance” before being hired, the gender wage gap all but disappears. This was true when looking at MBAs who were hired by their internship employer compared to another company, and supports the widely held perception that “men are promoted based on potential, women on performance.”
To combat this, the research suggests companies should consider an internship-to-employment track as an effective lever for change.
Need for Transparency
Last, but certainly not least, there’s a need for more transparency in the workplace where wages can be reviewed for economic equality and to drive balance.
To read the full article, head on over the INSEAD Knowledge here.