Tuesday, November 28

Women in work: how companies in Chile reduced gender pay gap

The impact on closing the gender pay gap.
The Gender Parity Accelerator in Chile has significantly improved the professional prospects of women in the workforce. By bringing together leaders from the private and public sectors, the accelerator has enhanced the quality of work for more than 130,000 local women – the equivalent of 7% of salaried employees in Chile’s private sector.

Data indicates that the three-year accelerator programme, led by the Ministry of Women and Gender Equality and implemented with guidance and support from the World Economic Forum and the Inter-American Development Bank, Chile has effectively promoted female representation in member companies, which include Accenture, Cargill, IBM, Invest Chile, LatAm Airlines, Microsoft, Nestlé, PwC, SAP, Salmon Chile, Siemens and Unilever.

On average, these companies report that 41% of staff members are women – almost 10 percentage points above the national average, which stood at 31.7% in January 2019. More importantly, these employers have reduced the gender pay gap by 37.5% between 2016 and 2019. Put differently, men hired by the group of 180 companies receive, on average, 5.6% more remuneration per hour of work, a gap that is considerably lower than the national average, where men earn almost 18% more wages, on average, per hour worked. Continued collaboration intends to reduce this gap even further.

Economic gender gap challenge.
It is unlikely that global gender parity will be achieved in our lifetime.

Since 2006, the Forum has been measuring gender pay gaps in countries around the world in the annual Global Gender Gap Report. The most challenging gender gap is the economic dimension which, according to the latest data, will take 151 years to close.

Although the economic opportunity gap has slightly reduced, progress has been hit hard by the COVID-19 pandemic, especially in terms of participation of women in the labour force, where the gender gap slightly reversed.

Today, proportionately fewer women than men are participating in the workforce, which means fewer women in work end up in leadership positions, and women often earn less than their male colleagues.

Our approach to reaching gender parity.
The Forum has helped to establish Gender Parity Accelerators around the world focused on closing gender gaps in economic participation. In Latin America and the Caribbean, accelerators have been convened in Argentina, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico and Panama in partnership with the Inter-American Development Bank. Egypt and Jordan host Gender Parity Accelerators in the Middle East and North Africa and Kazakhstan and Japan host accelerators in Asia.

The accelerators are part of the Global Learning Network, which enables countries to exchange insights and experiences. Countries that have demonstrated leadership in closing gender gaps, such as Sweden, Iceland, Norway and Finland, are knowledge partners. Learnings from these Nordic countries have informed the development of action plans in Egypt, Jordan and Kazakhstan. Both Jordan and Kazakhstan for example aim to close gender gaps in female leadership by introducing legislation on the minimum representation of women on the Boards of Directors. Norway was the first country in the world to introduce a quota for women on company boards and since its introduction, the share of women has consistently reached above 40% mandated by the law.

In accelerator countries, CEOs and ministers are working together over a three-year time frame on policies that help to further close the economic gender gaps in their countries. The specific aims are to increase the number of women in leadership positions, reduce and then close the gender pay gap, increase women’s participation in the labour force, and hardwire gender parity into the future of work.

In Chile, the Accelerator has played a significant role in reducing the economic gender gap. With the exception of large service businesses, companies in all industries have made progress in promoting gender equality and reducing gender pay gaps. Especially noteworthy are the large manufacturing companies that, with reductions of almost 90%, have practically eliminated their gender inequalities when it comes to salary levels. Service SMEs have also made significant progress and reduced wage inequalities by 80% over three years. Today, this sector has a wage gap that favours men by only 1.2%.

How can you get involved?
The Chile Accelerator has completed its initial three-year pilot programme and is currently assessing the viability of future projects. Our goal is to build a global network comprising a total of 15 countries accelerating gender parity by 2025.

If you are a business in one of the Gender Parity Accelerator countries, you can join the local membership base and contribute to driving impact. As part of a local accelerator, you will assess gaps within your workforce and implement policies to help change them.

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