The Gender Gap: a systemic talent management problem.

Too often, organizations treat diversity as a box-ticking exercise. They thrust people of color into token positions, or begrudgingly appoint a woman onto the board and proclaim themselves diverse. But if the decision-making is still made almost entirely by homogenous teams of white men, this diversity is merely surface “window dressing”.

Leaders need to see a lack of diversity and inclusion as a crisis for the intrinsic culture of the organization, to be assailed at the highest levels. Instead of expecting minorities to assimilate to the existing organizational culture, the company culture needs to make structural interventions to become truly inclusive.?

Organizations that integrate diversity and inclusion policies throughout their structure are more creative and innovative, have more engaged staff, and even earn more money. Equality is a win for everyone!

In a recent Mercer survey of more than 1,000 organizations in 54 different countries, 81% said it was important to have a plan for advancing gender equality, but only 42% actually did. Women make up about half of all college-educated workers in Brazil, but they remain dramatically underrepresented in positions of power.

In 2017, 45 top female performers wrote to BBC director Tony Hall to complain about the gender pay gap. Notably, not one male performer had signed the letter. It was seen as being a feminist issue, and so was left for women to fight, without any participation from the men who were benefitting from the pay disparity.

This apathy has to change. The gender pay gap is not a niche issue that can be sidelined by those in charge. It taps right into the culture of an organization. Is there transparency about how and what people are paid? Are people promoted on merit, or as a result of nepotism and tradition? Is there room for innovation? Any worker – of whichever gender – who cares about these principles should be deeply concerned when corrupt, opaque payment practices are allowed to flourish.?

While there is much talk about gender equality, the cold hard reality reveals that there is a little political will to actually shrink the pay gap. For example, the authors of the book Building an Inclusive Organization, Stephen Frost and Raafi-Karim Alidina, did a study of the companies heralded by the Times as being the top 50 Employers for Women in 2017. They found that only 6% of the organizations on the list had a better-than-average record for equal pay. So, gender equality in most of these organizations was more about successful PR strategy than true equality for women in their employ.?

To affect real change, organizations will have to adopt policies that embrace transparency. For example, many organizations have started publishing all the salaries of their staff. This is a big incentive to level pay disparities. Furthermore, it gives all employees the information they need to negotiate for promotions and pay rises.?

Until the men in charge start seeing the gender pay gap as an urgent issue for them, gender equity will remain performative. This will affect not only the workforce who is underpaid for doing the same work but the well-being of the organization as a whole. They will not be able to attract the best talent, and the culture of secrecy will discourage their current workers.

Gender-based compensation disparities often start before an employee is actually hired. When the terms and parameters of a salary negotiation are vague, women consistently end up with lower starting pay than men, even when controlling for other relevant factors. By contrast, when women learn that an offer is negotiable, they negotiate as often as men do.

Organizations can level the playing field by providing clear information. An online recruiting platform for engineers completely eliminated the gender salary gap for new hires simply by listing the median salary for every position. Prior to this change, women asked for lower annual salaries than men did - more than USD 4K lower, on average. When candidates were presented with the median data, the asks equalized.

“We do not have trouble attracting women,” the head of the women’s initiative at a large professional services company said some years ago. “What is hard is retaining them.”

So what drives turnover among women? When women are not treated fairly in the talent management processes, they are not likely to stick around. Their chief concern is lack of advancement or the perception that they will not be able to keep growing at their current employer. One study found that women in both public- and private-sector jobs were significantly less satisfied with their promotion opportunities than men were, which prompted them to leave at a higher rate. Studies of “up-or-out” professions such as consulting and law, however, have shown that junior women are less likely to leave if other women hold senior positions; their presence in the upper ranks demonstrates that career progression is possible.

The authors of the article How to Close the Gender Gap, Colleen Ammerman and Boris Groysberg, surveyed more than 150 female executives in a wide range of businesses around the globe and found strong agreement that gender bias and structural disadvantages are still impeding women’s success and warping people management at all stages, from recruitment through employee retention.

A global, multi-industry survey of female executives found broad agreement that women face bias and discriminatory practices in key areas of talent management:

Source: Ammerman, C.; Groysberg, B. How to Close the Gender Gap. Harvard Business Review. 2021.

These days, unconscious bias workshops are ubiquitous. While this heightened awareness is great, studies have shown that knowing you are biased is not enough to change your behavior. In fact, it could have the opposite effect; people may become complacent after attending training, and fail to interrogate their deeply-entrenched biases.?

To really change the culture of an organization, you have to go beyond awareness and focus on concrete actions. These actions should not be sporadic and individualized, but rather, embedded in the daily functioning of the organization.?

For example, you can change your hiring processes. Instead of advertising in the same few channels, you could post additional job ads on LGBTQIA+ sites, or at universities with whom you would not normally advertise. To work against your internalized prejudices, you should review the applications with a panel, and create structured interview questions that are the same for each candidate.?

Hiring diverse candidates is one thing; making them feel respected enough to stay is another. If the organization does not demonstrate that they are “walking their talk,” they will not be able to retain their hires. The key is creating a workplace that promotes psychological safety too so that people know they are genuinely free to express their views and perspectives.?

Meeting spaces are notoriously unequal; women and people from minority groups are much more likely to be interrupted or talked over. To counter this dynamic, you can create new policies about what kinds of language and behavior are appropriate for meetings, and rotate the meeting chair to make sure that those often-silent team members will have a chance to take the lead. You could also appoint a rotating “devil’s advocate” tasked with asking difficult questions and challenging the group.

Other interventions to practice inclusion at work include creating a mentorship program for minority employees that outlines a clear pathway to the promotion and making work-from-home options available by default.

Most importantly, these interventions need to involve the whole firm. Changing an organization's culture is hard work and will take a long time. Therefore, it is essential that leaders have “buy-in” from the board, management, and employees. They will also need to create a clear plan for who does what, ensure there is clear communication between stakeholders, and build in a review process to create accountability.

As you can see, fortunately, you do not have to be a CHRO or CEO to make a difference. If you take appropriate measures to identify and address bias within your sphere of influence, you can be a change agent for your team, however big or small.

REFERENCES

Ammerman, C.; Groysberg, B. How to Close the Gender Gap. Harvard Business Review. 2021.

Frost, S.; Alidia, R. Building an Inclusive Organization: leveraging the power of a diverse workforce. Koganpage. 2019.