This article was first published in GARP, Risk
Intelligence on June 14, 2019. Co-author: Sai Nitya Bodavala;
Data supporting gender diversity, though hard to
refute, doesn’t automatically change behavior
It is well within the reach of companies to
make the effort to ensure that there are more women in leadership positions,
and that those who are receive sufficient support to flourish at their jobs. It
costs little when compared to the profit that will come as a result of being
more gender-inclusive.
Numerous studies indicate a positive
correlation between profitability and the presence of women in leadership, but
in practice it appears that many are unconvinced.
For example, in a 2016 paper based on a survey of 21,980 firms
in 91 countries, the Peterson Institute for International Economics concluded
that “for profitable firms, a move from no female leaders to 30% representation
is associated with a 15% increase in the net revenue margin.”
McKinsey and Co.'s Delivering through Diversity found
that companies in the top quartile for gender equality not only had a greater
likelihood of earning higher profits, but also outperformed companies in the
bottom quartile by 27% in long-term value creation.
Recruitment firm Phaidon International,
surveying its employees in 2018, found that six out of 10 felt that management
did little to promote the benefits of gender diversity in the workplace. Seven
out of 10 employees believed that whenever the issue of gender diversity came
up, it was presented as a matter pertaining to human resources, rather than its
potential contribution to the goal of diversity.
Employees' lack of awareness of the benefits
that women can bring to the table, as well as managements' apathy with regard
to educating them about it, paints a dismal picture. This is because in many
cases, the management is itself unconvinced of this fact.
In a survey that IBM conducted of 2,300
executives and professionals worldwide, 43% could not definitively answer yes
or no when asked if they thought gender-inclusive companies were more
successful financially. Two-thirds believed that women weren't in leadership
positions because they were more likely than men to prioritize their families
over their careers.
It seems counterintuitive to think that
executives of companies that primarily chase profit would be unaware of
evidence linking gender diversity to profit. It may be more of an issue of
prejudice than lack of awareness.
Preconceived Notions
Certain ideas have become deeply rooted
regarding what a woman can and cannot, or must and must not, do. In India,
where gender roles are rigid, women who are in the workforce face a
double-edged sword. On the one hand, being assertive and being go-getters leads
to them being perceived as “bossy” or “insufferable.” On the other hand, being
quiet and conforming to what is asked of them reinforces the general idea that
women are subservient and unsuitable for positions of power.
Those who make hiring and firing decisions
seem to have skewed ideas of what women are supposed to be like. This idealized
perception does not allow them to see the reality. When these two versions are
presented as diametric opposites, companies are discouraged from hiring women.
According to a study by LeanIn.org and
McKinsey and Co., participants (employees) “rated mothers as the least
desirable job candidates and deemed them as less competent and committed than
women without children or men.” Companies subscribe to the notion that
motherhood makes the quality of work suffer. What is often overlooked, however,
is the boost in productivity that could occur if companies chose to accept the
reality of motherhood and to support women instead. If working mothers were
assured of a conducive work environment and policies that facilitate their
growth, it could greatly decrease turnover rates as well as the cost that
companies incur when hiring and training replacements for those who leave.
Not an Immediate Issue
Gender equality isn't considered to be an
immediate concern. Although the benefits of having more women in leadership
positions are undeniable, less-inclusive organizations aren't necessarily
suffering huge losses. So long as profit-making doesn't seem to be affected,
companies just push the problem to tomorrow. It is far easier to blame the
societal perception of women than to try to create and implement inclusive
policies.
Not recognizing and addressing the issue of
gender inequality means that fewer steps are being taken to bring women into
leadership positions. The lack of women at the decision-making level means that
there aren't enough people invested in the problem to bring it up and address
it, which perpetuates this vicious cycle.
Investment in Inclusion
Effective inclusion takes time, research,
money, collaboration and constantly evolving ideas. Companies lack
incentive to invest when the pay-off could take a while. Further, a bias
training program or a policy borrowed from another organization does not amount
to inclusion.
Inclusive policies must begin by keeping in
mind the employees currently working with the company and those that it wishes
to hire. It is fairly easy to label as corporate policy a checklist that
contributes little to employees' well-being. For a policy to work, it has to be
well-researched and thoroughly thought out.
Organizational support is crucial for
implementing and sustaining inclusive policies. Over time, the idea of
inclusion must be built into the very culture of the organization. As a result,
when issues come up, there are mechanisms in place to handle them. On the other
hand, dealing with problems as and when they come up is not very efficient. It
also does not allow for the company to come up with new and innovative ways of
inclusion, instead being far too busy putting out small fires.
Misled Men
IBM's study brings out the misconceptions
that men have about working women. Sixty-five percent of the male respondents
said that they would have been just as likely to be promoted if they were
women; 68% said that they would have received the same compensation had they
been women.
That just indicates how far society still has
to go in making gender equality a reality. Men are not bystanders, but rather
active participants who play a pivotal role in ensuring the closing of the gap
between genders.
Excluding men from the conversation about
equality only serves to alienate those who currently hold most of the
decision-making power. IBM found that 75% of the male executives were willing
to commit to certain measurable outcomes that would bring about greater
equality over the next five years.
Conclusion
The reasons for companies holding back from
implementing inclusive policies are many. It is naïve to think that mindsets
and norms that have developed over decades will change overnight. However, it
is undeniable that change is not around the corner, but here and now, and soon
older attitudes will lose their sway. Every woman who has managed to reach a
leadership position that allows her to change conventional ideas, every company
that helps women grow and come into their own, and every woman who has just
entered the job market, ready to take on all of the challenges that it poses,
is proof of that.
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