Gender diversity in the workplace
Inspite of the advantages of gender diversity being well documented, progress has been slow.
With increasing pressure from investors, it’s apt for business leader to shift the conversation to ‘Getting to 50:50 inclusively and ethnically diverse’.
Read the full speech, outlining thoughts for addressing pain points, reflecting diversity amongst stakeholders and ESG goal.
Full script of talk given – The Network, 8.4.2021 – Gender Diversity in the Workplace
My talk today briefly takes stock of where we are at and the impact of Covid, steps being taken to redress the balance and how this can shape the way organisations address gender diversity.
Because of time I focus on women although diversity should also include LGBTQ. I start by recapping where we are at and developments coming to the fore.
The value of gender diversity is well documented – the 2019 Mckinsey data reveals that most ethnically diverse boards were 36% more likely to outperform peers on profitability. Yet progress has been slow and insufficient.
Although globally on average 23.3% of board positions are now held by women, it’s far from parity. (source: Egon Zehnder)
Some statistics, In the UK 34% of board directors are women, 46% non-execs are women, 5% are chairs or have CEO roles.
The number of black and Asian exec directors in 150 UK listed companies is 2.6% – in the US its 4.1% in Fortune 500 (source: Spencer Stuart)
I don’t have the data for LGBTQ but in the US24 of 50000 board seats are filled by LGBTQ.
For a brief time, last year, women on boards disappeared from FTSE 350 indicating how fragile the process is.
As Covid continues to impact lives, we can already see that the pandemic and the economic fallout is having a regressive effect on gender equality. A Mckinsey report shows that women make up 46% of global employment but account for 54% of overall job losses.
Part of this is also down to how women and men tend to cluster in different occupations. Women in part time jobs have been hit hard as part time jobs fell by 70%.
The burden of unpaid care is significantly carried by women and this means that women’s employment is dropping faster than average.
The World Economic Forum predicts it will take 135.6 years to reach gender equality (delaying by 36 years).
Investors are calling for great board and workforce diversity and, several developments are coming to the fore include demands for heightened commitments and disclosures.
State Street Global advisor’s latest engagement effort on diversity is coalescing with several developments underway on the global environment, social and governance landscape.
In August 2020, State Street sent a letter to board chairs of public companies in its portfolios. The letter stated that from beginning of 2021 it expects companies to provide the following among other things:
- Role of diversity in the company’s human capital management practices and strategy
- The company’s goals regarding diversity
- Measures of the diversity of the company’s board and global employee base
- Goals for racial and ethnic representation at the board level including how the board reflects the diversity of the company’s key stakeholders beyond investors
- The board’s role in oversight of diversity and inclusion
They have stated that whilst their primary tool for effecting companies’ operations is engagement with management and the board, they are prepared to used their proxy voting authority ‘to hold companies accountable’.
Towards the end of last year, we also witnessed NASDAQ file a proposal with US Securities and Exchange commission to adopt new listing rules relating to board diversity and disclosure. This reflects their purpose ‘to champion inclusive growth and prosperity to power stronger economies’.
The rules require 3,249 companies listed to disclose and have at least one woman and one diverse director. For the first time an exchange is demanding for more disclosure than the law requires. The last time I checked this had received a positive nod from the SEC
Nasdaq goes beyond the workforce to support SME’s and in celebration of Nasdaq’s 50th anniversary created a program Nasdaq and Mentor Makers. This is a partnership between Nasdaq entrepreneurial centre and Mentor Cloud – leverages collective skills and abilities to support entrepreneurs. The aim is to make it easy for entrepreneurs who want to grow their business to find support and expertise.
Countries too are evolving their policies. Germany has adopted a national strategy to promote gender equality that has been co-ordinated and agreed across all government departments. The strategy announced in 2020, expanded a law so that the 30% quota will apply to 600 companies instead of 105 currently. It also states an objective to have equal number of men and women on boards by 2025 in state owned Co’s, civil service and politics.
Companies will also face pressure from Millennials and consumers. Currently 71% of Millennials feel that opportunities are not equal for all, so organisations with gender diversity at the heart are likely will be more attractive to the future employees.
A combination of these factors signals a time for business leaders to act and revisit gender diversity and inclusion strategy and objectives.
As a business imperative, gender diversity is more than the workforce also needs to include how the company operates, how it serves female customers, contributes to building gender parity in the environment and society.
The UN puts achieving gender equality at no 5 of its 17 SDG’s not just for the sake of individual women but prospects for the global economy and society
So, I think shifting the conversation now to ‘Getting to 50:50 inclusively and ethnically diverse’ is apt. 50:50 is about ensuring equal representation including ethnic representation and inclusively is ensuring that all men and women are empowered to thrive including stakeholders
The 2021 Bloomberg Gender Equality index revealed increased disclosure as companies reinforce commitments to inclusive workplace. These include female leadership and talent pipeline, equal pay and gender pay parity, inclusive culture, sexual harassment policies and pro-women brand, extending gender inclusion beyond the workplace to include for instance communities and suppliers
So, what are the areas for companies to think about? I cover three:
- Improving gender diversity and inclusion across the workforce to include ethnic minorities
- Building a supportive culture & workplace
- Reflecting diversity amongst stakeholders and ESG goals.
Improving diversity across the workforce
Women see the pandemic’s impact as a threat to their careers and employees should take action through a customised approach identifying factors that enable women to thrive at work.
Whilst the list is not exhaustive, interventions include employee provision of childcare, pay and promotion, flexible working options, better benefits (parental leave) learning development opportunities, interesting projects or stretch assignments, access to senior leaders. I believe that this should be addressed inclusive of men too.
There is no one size fits all for improving gender diversity in the workplace and companies need to look at where the problems are, what’s causing them and if they were there before the pandemic and address them.
There are 3 pain points which stalls progress:
- Pipeline issue – need to get the next generation excited and prepared for a digital world. This requires visible mentors, access to opportunities, the right education (STEM)
- Mid-career – keeping women in the workforce during the child bearing/rearing years or coming back after maternity leave.
- Senior Practitioners – getting women from Director level to C-Suit levels and providing the relevant support
We know that companies with more women at the top have more women throughout the company overall and the pipeline coming through the ranks need visible mentors, evidence of progress and network of support.
The role of visible mentors (both inside and outside the company) cannot be under-estimated and that’s probably why many BAME minority mid-career women do not feel connected with some of the women’s networks and initiatives.
We therefore need to revisit how can we make networks work for all and what factors can enable BAME minority women to progress. It’s not just about giving them a seat at the table but also a sense of belonging.
At the moment there is no explicit requirement for employees to address how they support alternative forms of workforce, freelancers, zero-contract workers.
I think this could be the next stage of development as more companies increase the non-permanent component of their workforce. Better data is required to analyse the gender split in the alternative workforce models.
I say this because of what we recently witnessed with the Deliveroo IPO. One of the reasons why the IPO did not get institutional backing was because the investors were not convinced about their human capital management.
Then we have the UBER case where the drivers won the case and rights to be classed as worker.
We are also working with a large bank that has recognised this and has set up a network for non-permanent employees (60%) and have started engaging to see how to address their packages and create the sense of inclusiveness. This makes sense for both the company and the non-permanent resource as both win. At some point, the debate will shift to include gender.
Whilst we can have process and programmes, it’s the everyday behaviours experienced that determine whether they believe that diversity and inclusion is a real priority and not just a tick-box exercise. Culture is key.
So, what are the considerations for building culture
Culture is very much linked to purpose and this has to start at the top defining the purpose that has gender inclusiveness at its heart and values that guide behaviour.
Businesses need to make diversity, respect and inclusion as non-negotiables experienced both inside and externally
Leading with empathy and trust, having regular check-ins and open dialogues also helps promote a culture of diversity and inclusiveness. Internal communications and language play a really important role.
Looking at how values guide behaviour and embedding behaviour, start with knowing where your organisation may be biased and questioning what will move groups closer to embracing diverse and inclusivity and personality mix required.
It’s critical to have wider engagement from the teams when building culture – research shows that team innovation, creativity and knowledge sharing provide the foundations for build inclusiveness.
Other practices include addressing bias at recruitment, promotion and performance review stage, self-management tools, tracking data on attitude and behaviours in addition to the usual metrics.
So far, I have talked about diversity and inclusion inside the organisation. It’s also important to consider what’s happening outside your company.
What is your brand saying about who you are as a culture and in what ways is your organisation supporting diversity in society and environment?
Reflecting diversity amongst stakeholders and ESG goals
If we take the finance sector, there is a lot of work to be done around developing solutions that support their female customers from financially excluded, SME’s and women with wealth.
Over half of the 1.7bn (source: World Bank) unbanked are women and this % will rise as they have been hit the hardest by Covid. This hinders women from controlling their financial lives.
Funding going to female SME’s vary from 1% to 30% – $1.3tn (source: World Bank) is the SME funding gap globally. This hinders female smes’s from growing their businesses
Women control 32% of the world’s wealth c$72trn (source: RBC 2020). Unconscious bias also permeates the wealth management sector the gender distinctions in solutions designed for women are often superficial and reflect outdated assumptions about women’s role in driving wealth. This is a missed business opportunity …. I could carry on but you get a sense…
If we take the SME funding gap, it’s no surprise as 13% are women on investment teams, 4% of women sit are on VC and PE fund management teams. This lack of representation leads to unconscious bias.
The key takes away from this is that to develop gender inclusive solutions, companies also need to build diversity in key roles and in project teams.
ESG goals are shaping how organisation think about their contract with society and the environment.
Climate induced disasters increase women’s burden, unpaid domestic and care work.
But women are also great agents of change and invest in climate smart Agri solutions and clean-living solutions. Mainstreaming gender equality in sustainability and environmental development is key and can no longer be regarded as a separate issue.
SMEs are considered the engine of growth and when organisations think about their contract with their stakeholders addressing ‘gender parity in trade and supply chain’ is a good starting point.
In the US it’s law that 5% of a MNO’s procurement is awarded to female owned suppliers.
When we did research in the UK market none of the FTSE 100 companies had supplier diversity programmes along the lines of the US.
I see a lot of programmes from MNO’s supporting female MSME’s in developed markets and some of those learning can also be applied to developed market.
In conclusion, I have shared the direction of travel and ideas for ensuring that the momentum built is maintained and propelled to the next level.
Leaders have the opportunity to drive progress and excellence across the pillars that currently make up the Bloomberg Gender Equality Index and also address the future trends shaping Gender diversity in the workplace that I outlined.
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