Gender diversity has been one of the top agendas for several organizations across the globe. A combination of reasons can be credited for this – either the positive impact of diversity on innovation or the improvement in business results or maybe even both. The efforts to establish parity started with research organizations like Catalyst measuring the pay gap between men and women, and soon transcended to other metrics such as the proportion of women in organizations, gender ratio across levels and career advancement opportunities. However, most of these are academic/industry research works.
It was only last year when legislation in the UK, according to a Mercer report, asked organizations (with more than 250 employees) to make public the wages of their employees. The results surprised many – not because they were better than expected, but because they were even worse than people had initially thought they would be. This brought organizations’ attention to work towards maintaining pay parity if they were to maintain their reputations as fair employers. The next step though is to take a concerted effort to track the progress made towards their gender equality agenda. Boston Consulting Group recommends five key metrics which organizations should look at when measuring gender equality.
The five metrics
The first step is to achieve pay parity. There are still quarters where women are still underpaid for the same work compared with men. The global gender gap in economic participation stands at 58.5%, according to the World Economic Forum’s Global Gender Report. Most of the countries have almost gotten rid of wage inequalities for the same work. For instance, in Britain, women make only 1% less, according to The Economist, than men who are at the same level and working in the same function. However, the differential between the wages of men and women spike at the senior levels, where women have been found to make less than men. In Germany, for example, women at the senior level earn 15-20% less than men.
To bring this change, organizations need to first evaluate the existing wage gaps at different levels. Then the next thing to be closely scrutinized is the performance bonus and salary hikes – assess whether men and women at same performance scores, i. are being given the same bonuses; ii. are being given the same salary hikes; iii. are being given the same promotions. Once the (dis)parity is established, organizations need to plan interventions.
Boston Consulting Group (BCG) recommends some interventions to bridge the pay gap:
i. Have fixed pay ranges by position.
ii. Have fixed negotiation parameters
iii. Calculate bonuses using hard metrics
The bias in the hiring process has been found to start before it even begins. Recent research by Totaljobs found that the job descriptions of female-dominated roles used female-biased language; and vice versa for male-dominated roles. The same bias transcends into the hiring process, as the recruiter already has made up his/her mind that (s)he is going to hire either a woman/man for the job. Also, another research by Science for Work has found that men are preferred over females in male-dominated jobs such as consultants or management roles like CEOs. However, there is no disparity in selection for female-dominated jobs – a man is equally likely to be considered for a nursing role as a woman. While organizations have started to become more alert to the gender bias while recruiting (only 1 in 4 women found recruitment as an obstacle in BCG’s research), there is still the threat of unconscious bias creeping in and corrupting decision-making.
To avoid any bias in recruitments, organizations need to keep an eye on the language used throughout the recruitment process. Check – are the job descriptions gender-neutral, are the interviewers being fair while asking questions. The next thing that organizations need to do is track the entire recruiting funnel – the ratio of men and women applicants, the ratio of shortlisted candidates, ratio of candidates called for the second interview and so on. This can ensure that no strong female candidates miss out, and also give an overall picture of the trend of ratio of men and women across the recruitment funnel. If the gap keeps increasing at every stage consistently for most of the roles, then there is a possibility of hiring managers exhibiting unconscious bias.
i. Blind screening of candidates. Keep the gender out of resumes. Also, consider blind interviews/assessments to keep unconscious bias out.
ii. Outreach into key areas such as STEM. Women hiring in STEM roles is still low, and it might require extra effort in outreach to get more female candidates to apply.
iii. Balance of shortlisted men and women for job vacancies. Try to create a 50:50 ratio of men and women for different job openings.
iv. Diverse interview panels. Have a representative panel of interviewers. Diversity of views reduces the chances of gender bias.
Companies also need to track women attrition at different levels and the reasons behind it. Two research works – one by McKinsey and another by Best Companies for Women in India (BCWI) – have both found that women attrition is not a problem in organizations. Having said that, companies should track the number of men and women at each level to identify where specifically is the career progression ladder broken. To retain women employees, organizations must ensure:
i. Flexible working policies. For women employees who undergo maternity, the option of flexibility is a must
ii. Participation of men in diversity efforts. It must not be an all-women affair. Anyone can occupy a leadership position, and that individual (regardless of the gender), should be sensitized about diversity.
The average wages of men compared with women are much more (women make 78 cents for every dollar made by man) is because of the lack of women at senior high-paying roles. In APAC, there is only one woman in leadership positions for every four men, according to McKinsey. If women are not leaving the organization (as discussed above), then why are they not advancing to leadership positions? It is not for a lack of career ambition, as research by Boston Consulting Group has proven. This is another metric that organizations need to track very closely. Is it a case of women being discriminated against at the review stage, is it a case of managers not trusting if women can give time to work, or is it a case of managers not considering women altogether for promotions, or is there a skill gap which can be bridged? Organizations need to find the specific reasons behind the lack of advancement of women to senior positions and then tackle those reasons.
BCG recommends the following interventions:
i. Sponsorship programs
ii. Professional development and executive coaching
iii. Visible role models
Lastly, companies need to make sure women are spread across roles at the executive level, and not just concentrated at female-dominated roles like HR (23% of women occupy HR leadership positions). This is another important metric that needs to be tracked. Based on the growth patterns, women need to be encouraged to migrate to different functions, or even start their careers at traditionally male-dominated functions like strategy and sales. BCG recommends the following interventions:
i. Technical training
ii. Stretch assignments in key areas
iii. Balanced short lists of candidates
Organizations need to take gender diversity as a serious business agenda if they haven’t already. In an age where organizations are struggling to find skilled talent, an opportunity lies with a talent pool that can contribute significantly to their revenue. Are organizations taking notice?