Gender inequality: the 19 pence divide
Source: Hoggett Bowers
By way of an introduction, Hogget Bowers CEO, Karen Wilson, referenced a recent FT article which stated that: “One in three FTSE 250 companies were mainly concerned about Tax, Terrorism, Regulation and Brexit.” This despite a recent global survey by McKinsey’s showing that 28 trillion US dollars is lost from global GDP each year due to gender inequality and lack of parity.
Furthermore, the World Economic Forum has recently revised their 2014 original prediction for true parity to be achieved, from 79 years to 117 years.
Whether or not this prediction will bear out remains to be seen, but what is undisputed is that the current pace of change is woefully slow.
At entry level, predominantly staff are female with a sharp decline of representation at management level
Our chair, then asked our guests the following questions:
1. On the basis that the role of the CEO is to drive the growth of the business, what are you doing in your business to address gender parity?
2. When you talk to any younger females from your family or friends, advising on their career, how are you helping them with the gender parity issue?
A lively discussion followed from which we have summarised the key themes as well as some interesting anecdotes.
The World Economic Forum revised their 2014 original prediction for true parity to be achieved from 79 years to 117 years
Opening the conversation was the relatively new CEO of a leisure business, highlighting that his business, namely entertainment outlets, were largely clubs populated by “working men”. Within the business he said, there is an “unbelievable glass ceiling”. At entry level predominantly the staff are female, with a sharp decline of female representation at management level.
Even field sales staff only have a ratio of 70% men to 30% women. At board level they currently only have one female.
When this CEO challenged HR asking why the business was not recruiting or developing more females, the answer given was that there comes a point, where the environment becomes untenable in terms of work life balance for women with school age children. He went on to say that it is therefore crucial for all of the executive team, with the CEO’s leadership, to create and foster an environment that is far more egalitarian, more inclusive and free from unconscious bias.
A utility company CEO outlined that this is a far deeper societal issue, and not just for people who are employed but in fact, goes back years and years. Therefore, it is up to current leaders to understand not only how to create the right environment in the work-place but also the right opportunities at the earliest possible age for women.
Should we really be surprised that by the time we get to the board room, there are not many women to choose from internally
He disclosed that in his business, at graduate level, there are no significant gender inequality issues. The business actually employs a higher ratio of female to male graduates and has a higher ratio of females progressing more quickly through management training. This is happening naturally without specific intervention. The real challenge arises at middle management level, created by wider generational and deeper societal issues. This is when the big divide starts to emerge.
He asked the question “Is it simply because it is the natural thing for a woman to stay at home and look after the children when they are small?” If so, how is this going to change over time? How do we change our working patterns, environment and actual culture of how we operate as a business to facilitate that change?”
He concluded that, given the imbalance is already in place at the middle management level, and embedded for over 20 years, should we really be surprised that by the time we get to the board room, there are not many women to choose from internally?
Is it simply because it is the natural thing for women to stay at home and look after the children when they are small
Search firms are regularly challenged to deliver the mandatory “diverse” search list, be it gender or wider diversity. With some clients, it is almost a quota system, a numeric measurement only, and we challenge by asking “Once you have found them, what are you going to do with them after they have joined?” If you only have one person who represents a particular pillar of diversity, what happens to them? Do they stand out as unique and different and therefore potentially, isolated? If so the likely outcome is “tissue rejection” and who would blame them? Will they be expected to “convert” to the culture that still exists or are you hoping their presence alone will change your culture? Cultural or tissue rejection are key causes of a failure in getting more parity and creating change.
It is the CEO who is responsible for leading and where necessary, changing company culture to reverse any imbalance
Actually diversity by definition never refers to ONE type. By being open in principle to people with, for example, different educational and social backgrounds, any business stands a greater chance of addressing any gender disparity which exists.
Another of our CEO guests, during a recent external search to appoint a CFO with Private Equity experience, was presented with a long list with no female candidates at all. The CEO challenged the search firm who appeared not to have given this much thought. Hence a second shortlist duly emerged with a good gender balance. The end result was that his business hired two candidates, both female. Their overall goal is to achieve a 50/50 male: female board ratio within all of their businesses.
Taking this further the CEO of a mid-sized B2B business, said that when looking to appoint a CFO, he had agreed with the board to seek a female.
However, it became quickly apparent they would only have the choice of less qualified individuals if they positively discriminated for a woman and at that time, this was not the right solution for the business considering the current challenges it faced.
Cultural rejection or tissue rejection are key causes of a failure in getting more parity and creating change
He added that he had the exact opposite experience when working in an insurance firm. The best female senior claims talent, i.e. super high achievers in law firms, could be attracted by a much better work life balance in insurance.
The discussion moved to how to encourage and attract more women back to work after having children. The CEO of a business services organisation shared how his wife, a highly qualified City solicitor, took time out to have their children. Whilst she earnt considerably more, it was right for their domestic arrangements that she stop working because they chose to have several children. Now ready to pursue a working career once more, she has found it challenging to secure another senior role after such a gap.
Another guest, CEO of a financial services organisation, commented that women who do go back to work are penalised for their time out. It is up to business leaders to create the right culture and give credit for the time out, recognising the qualities they bring from this experience; the maturity that is needed in the board room and executive teams.
One key factor was lack of sponsorship internally for their high potential females
What was agreed around the table was all leaders should focus more on skills
and capability, rather than time served, in order to remove unconscious bias in the recruitment process and internal development routes.
One CEO shared that for a major tunnelling infrastructure project in the UK, the business is currently running a successful return to work campaign, specifically targeting women. Through this they have been able to plug their middle and senior management gaps.
A senior executive from a global financial services business, shared what their business has been doing to address their sharpest gap in gender parity, which was identified at MD/senior executive level.
The business created a sponsorship programme for all the high performers at this level. As a result they have been able to identify and promote a higher proportion of women than before.
Women who do go back to work are penalised for their time out
Another barrier to gender equality discussed is the cost of child care in the UK. On average it is far higher than in other European countries. One guest shared that in France, child care is heavily subsidised and it is far easier for women to get back to work there than in the UK.
Therefore the real challenge is how to tackle the big divide in gender parity that exists at the middle management level
However, many other barriers exist including insufficient support for family responsibilities for both women and men. There is still much work to be done in businesses to focus on work output more than hours worked to ensure that flexible working patterns are available and are seen as the norm. There is still too much stigma attached to them especially for men actively involved in raising their children. Men and women should be equally encouraged to utilise flexible working programmes.
Working patterns which give flexibility are now expected, irrespective of gender
Advice for the younger female generation
Overall consensus was that with the younger generation, there are no expectations for a long term career in one organisation and that working patterns which give flexibility are now expected, irrespective of gender.
Therefore the real challenge is how to tackle the big divide in gender parity that exists at the middle management level in most businesses now. This is the only way ultimately to tackle the bigger divide at board level. To speed progress, leaders will have to create the right environment and culture in which unconscious as well as conscious biases are removed.
Looking at the current US election candidates’ approach to gender parity, in the Republican Party the average home pay of male staff is 35% higher than that of females. In the Democrat camp, it is less than 1%. A brave reporter tackled the Republican candidate on this major discrepancy and was told “When it comes to categorising people, men and women, it gets very dangerous… when you have to categorise men and women into a particular group, and a particular scale, it gets very very dangerous, because people do different jobs. It’s very hard to say, what is the same job? So in fact pay parity is a very very dangerous question…”
In summary, there is an acute mid-career discrepancy when it comes to gender parity. This is harming business as well as being inherently unfair on many women who are underpaid in comparison to their male colleagues doing the same roles. Business will affect wider society in time but cultural changes need to be achieved and come from the top. Organisations must be willing to take an individual approach, as well as providing proper mentoring and sponsorship programmes for talented senior female staff. Leaders need to remove the stigma of flexible working patterns for staff in order to foster a culture that work output is valued over presenteeism.
There is also significant reform required by Government and in 2015, the gender pay gap was officially published at 19.2%, a figure which remained unchanged from 2014. The other way to put this is women worked 57 days last year for free or earn 81p per man pound.