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November/December 2014

New Research Uncovers Key Drivers of Gender Equality Inside Organizations


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When will women thrive? This is a question with profound implications for businesses striving to establish competitive advantage, because the link between women’s participation in the workforce and economic growth has never been clearer. It is also a question of urgency for women themselves — and for the families and communities that depend on them.

To answer this question, Mercer reached out to a large set of employers globally and relied on objective, statistical analysis to find out how female talent is faring and to uncover the real story of what drives gender diversity in organizations. The results, captured in the new report When Women Thrive, Businesses Thrive, indicate that despite diversity efforts over the past several decades, employers are still decades away from true gender equality if they don’t implement changes, and that a holistic strategy for supporting women across several key aspects of their personal and professional life cycle is key to success.

ORGANIZATIONS GLOBALLY ARE FAR FROM ACHIEVING GENDER EQUALITY

Based on 178 submissions from 164 companies in 28 countries covering 1.7 million employees — including more than 680,000 women — Mercer’s research reveals that:

  • WOMEN CONTINUE TO LAG BEHIND MEN IN WORKFORCE REPRESENTATION. Among respondents globally, women make up 41% of the average organization’s workforce. With the highest representation among all career levels in support staff roles, women’s representation drops — often precipitously — at higher levels of the organization (see Figure 1). Respondents in North America have higher female representation at all levels, whereas those in Europe/Oceania and Latin America have lower representation.

  • CURRENT TALENT FLOWS WILL MOVE MORE WOMEN INTO TOP ROLES OVER THE NEXT DECADE — BUT NOT IN NORTH AMERICA. For the average organization in North America, female representation at the highest ranks, assuming no changes in hiring,promotion, and retention rates, will remain essentially flat over the next decade, with 26% of executive roles held by women in 2024 compared to 24% today (see Figure 2). In contrast, organizations in Europe/ Oceania are on track to move from 18% to 47% female representation in executive roles over the next 10 years, while those in Latin America are positioned to see growth from 12% female representation in top roles today to 39% by 2024.

THE FIVE KEY DRIVERS OF GENDER DIVERSITY

Standalone programs and siloed initiatives are not advancing gender diversity. Statistical analysis of the data provided by respondents reveals the following key drivers:

1. A BROAD, ENTERPRISE-WIDE FOCUS IS LINKED TO SUSTAINABLE CHANGE. Organizations that focus on broad and holistic approaches to support female talent are on an accelerated path to gender equality.

2. ACCOUNTABILITY IS NOT ENOUGH — LEADERSHIP NEEDS TO BE ENGAGED IN PROMOTING AND MANAGING DIVERSITY. Formal accountability turns out to be insignificant in increasing gender diversity when divorced from true leadership engagement. But organizations in which leaders are actively involved in diversity programs have more women at the top and throughout the organization, as well as more equitable talent flows between women and men.

3. THE ACTIVE MANAGEMENT OF TALENT DRIVES MORE FAVORABLE OUTCOMES THAN TRADITIONAL PROGRAMS. Simply implementing programs to support women’s needs is not enough — and may actually slow the trajectory for women in the absence of proactive management of their careers. Specifically, the research found that:

  • Actively managing pay equity, as opposed to making a passive commitment, drives gender equality.
  • Ensuring that women and men have equal access to profit and loss (P&L) responsibilities leads to better gender diversity outcomes.
  • Traditional “check the box” leave and flexibility programs are not sufficient to improve gender equality — and may even hurt diversity efforts when not complemented by proactive coaching.

4. NONTRADITIONAL SOLUTIONS IMPACT FIRMS’ LONG-TERM ABILITY TO ENGAGE AND RETAIN FEMALE TALENT. Innovative programs that target women’s unique health and financial needs are helping organizations better attract, develop, and retain female talent and include:

  • Customized retirement solutions geared toward women’s unique financial behaviors, attitudes, and needs — such as differences between women and men in lifetime earnings, in longevity (which impacts the length of time savings need to last), and in investing behavior.
  • Health-related programs, when prioritized and focused on the unique needs of women. Women are affected by different health issues and illnesses than men, experience and use the health care system differently than men, and are more likely than men to be caregivers.

5. MEN AND WOMEN OFFER EMPLOYERS DIFFERENT BUT EQUALLY IMPORTANT SKILLS. Although companies view female and male managers as having somewhat different strengths, they rank those strengths as equally important to success. And those companies that embrace the different strengths that men and women bring to their roles are more successful at achieving gender diversity.

IMPLICATIONS FOR EMPLOYERS

These findings are a call for employers to think and act in new ways in order to better utilize female talent. To accelerate progress on gender diversity, employers should:

  • ACTIVELY ENGAGE THE RIGHT PEOPLE WITH THE RIGHT COMMITMENT AT THE RIGHT TIME. Rather than trying to get the full executive committee to lead from the front, organizations should focus on identifying champions who are ready to drive change.
  • COMMIT TO IMPROVING PAY EQUITY BETWEEN GENDERS. Only 38% of respondents use a robust statistical approach for conducting pay equity analyses and only 35% have a formalized remediation process to address any pay equity risks.
  • ACTIVELY MANAGE WOMEN’S PROFESSIONAL LIFE CYCLES. This requires ongoing, transparent communication about the implications of possible career choices and encouragement to take risks and reach for higher rungs on the ladder.
  • INCREASE THE REPRESENTATION OF WOMEN IN P&L ROLES. Among survey respondents, only 26% agree that women in the organization are equally likely to be in P&L roles as in non-P&L roles.
  • HELP WOMEN IMPROVE THEIR FINANCIAL WELLBEING THROUGH PROGRAMS AND EDUCATION GEARED TOWARD THEIR UNIQUE FINANCIAL NEEDS, ATTITUDES, AND BEHAVIORS. Only 12%– 15% of respondents have introduced gender-specific elements into their retirement and savings programs.
  • ADOPT MORE INNOVATIVE, GENDER-SPECIFIC APPROACHES TO SUPPORTING WOMEN’S HEALTH. Health education programs geared to women and more flexible approaches to health and well-being could significantly impact female participation in the workforce if adopted by employers.

This analytically rigorous research points employers toward fundamentally different and more effective approaches for fully utilizing the female workforce. However, those who apply predictive analytics in their own organizations to identify and respond to their vital talent business issues — whether they relate to gender,the engagement and participation of other diverse groups, or other workforce matters — can identify their own most impactful interventions and, in doing so, facilitate the achievement of rapid and dramatic change.

 

Download Mercer’s newly released research report, When Women Thrive, Businesses Thrive.

Register for our webcast on December 9, 2014, to hear Mercer experts discuss the research findings in more detail.

 

CONTACTS

Brian Levine, PhD (New York)
Partner, North American Workforce
Analytics & Planning Leader
+1 212 345 4194
E-mail
Katie Edkins (Boston)
Women@Mercer Project Manager
+1 617 747 9368
E-mail

Download PDF: New Research Uncovers Key Drivers of Gender Equality Inside Organizations

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