The gender pay gap is real: Female full-time and salary workers earn 81.1% of what their male counterparts make, according to a 2019 U.S. government study. This inequality inspired Ellevest CEO and co-founder Sallie Krawcheck and PepTalkHer founder Meggie Palmer to help balance the scales.
Krawcheck and Palmer come from different industries, but they arrived at similar conclusions. Both are committed to helping women build wealth through the companies they created and, by doing so, build a better society for the next generation.
Palmer says, “At the current rate, the gender pay gap is going to take more than 100 years to close. We don’t think that’s good enough.” Krawcheck, for her part, declares, “The path to equality for all is getting more money in the hands of women.”
The two shared their frustration with the gender pay gap, and their efforts to close it, as part of Salesforce’s “Make Change” series. They call on business leaders to examine their hiring practices and follow their lead by writing gender pay equity into their mission statements and actively enforcing equal pay for equal work at employee reviews.
Palmer, a former journalist who changed careers after growing frustrated with gender discrimination she encountered in the workplace, notes, “The gender pay gap starts at childhood. Little girls receive less allowance than little boys and that gap grows throughout our careers such that women retire with less savings into their retirement as well.”
Finance veteran Krawcheck has seen that inequality play out in her field. “… [D]espite the research that tells us that women are better money managers than men or at least as good,” she says, “… we manage just 2% of mutual fund dollars — and Wall Street today, 90% of traders are men, 80% to 85% of financial advisers are men.”
And, on the client side, she saw that women don’t actively invest as men do. For some women, Krawcheck says, that can sap as much as “$1 million-plus over the course of their lives.” Steeped in an industry that values the bottom line, Krawcheck had to ask, “What’s the gender investing gap costing us?”
Krawcheck and Palmer founded their companies to change all that.
Palmer launched the free PepTalkHer app, which she describes as “a tech-coaching program empowering women with confidence and negotiating skills.” PepTalkHer also works in-house with Fortune 500 companies to help them “recruit, retain and develop talent from diverse backgrounds” with the goal of helping these companies “retain those women leaders throughout the pipeline. Companies are struggling to retain female talent beyond the three- to five-year mark. What we do is help them by providing professional development opportunities for those women,” explains Palmer, so that they can see paths for promotion with their current employer rather than changing jobs.
Meanwhile, Krawcheck has built a solution for women who want to invest. Over the years, she says, a number of people approached her and asked, “Hey Sallie, why don’t you start an investing platform for women or a wealth management platform for women or a wealth tech platform for women given your time on Wall Street?”
She confesses she initially thought it was “a dumb idea,” convinced that “money’s gender-neutral.” Over time, Krawcheck had a change of heart. “I recognized, sort of a cascading series of recognitions, that it doesn’t matter if I don’t think women need their own thing. Women don’t invest as much as men do … and it keeps us from living our fullest lives,” she says.
That awakening motivated Krawcheck to start Ellevest, which describes itself as “a mission-driven, digital-first investment platform, built by women for women. Its goal is to get more money in the hands of women by closing the gender money gaps.”
Krawcheck believes that while men must be part of the solution, women must take the lead. “It’s important that we women march forward, that we start businesses around our needs, that we fund each other’s businesses, that we talk each other up, that we hire each other,” she explains. “It’s amazing to see young women CEOs of startups these days who are really providing a beacon for so many other women.”
At the root of both companies is a desire for change and equity that will bolster the lives of families. That is particularly important amid the current surge in layoffs and unemployment, where mothers often become breadwinners, even as their own salaries are being cut. Even beyond this moment, though, Krawcheck notes that a financial cushion can allow a woman to “leave a job you hate or leave a spouse you’re not so crazy about anymore or start the business that you want.”
The need to make a difference has long been ingrained in Palmer, going back to her journalism days. “I need to be able to sleep at night,” she says, “and making profit and making revenue and making an impact is very, very important, but if we do those things at the expense of the world, at the expense of ethics, I just don’t think that it’s worth it.”
Krawcheck concurs. As a society, she says, the gender pay gap can cost “our daughters the flexibility to live the lives they want to.” She adds, “Not one of us wants our daughters to have smaller, more constricted lives than our sons.”
“And even more broadly, from a societal level, as we close these wealth disparities and these wealth gaps, we have a fairer society.”
To see more of the Salesforce “Make Change” series, go to www.salesforce.com/make-change-equality/.