Diversity mismatch among executives slowing female progress

12 November 2018 Authored by Consulting.us

A mismatch between the views of male-dominated executives and the perceptions of women may be creating barriers to reducing gender diversity imbalances at the top of business, finds a new report. Flexible employment conditions, the tackling of implicit biases, and executive buy-in were noted by women respondents as key to their retention and advancement. Yet, these factors scored relatively low on the executive radar.

The number of women in the workforce (aged 25 – 54) has changed significantly in the US, up from 50% in the late 1970s to 75% in 2014. Yet the gender balance, particularly in the higher echelons of the US business environment, remains skewed in favor of men.

While relatively low levels of female participation is noted at the top end of the US business environment, numerous studies have shown that a lack of diversity may be costing companies. A Grant Thornton study found that S&P 500 companies may be losing out on $567 billion per year in revenues, while a 2016 Peterson Institute for International Economics study of 22,000 global companies found that increases in female board-level participation boosted profitability by as much as 15%. 

While awareness exists around the problem of poor female representation, solving the problem has remained relatively difficult – with considerable differences between the management and those affected about how best to improve female representation throughout a companies’ operation.

To better understand effective techniques in the area, The Boston Consulting Group (BCG) released its ‘Proven Measures and Hidden Gems for Improving Gender Diversity’ report, which is based on 3900 US survey respondents.

Share of female in leadership

The broken ladder

The study notes that, while many companies (89%) have gender diversity programs in place, most (73%) claim that the programs are ineffective in bringing about the required change. Among S&P 500 companies, the lack of female representation is so low (5.8%) that, according to the firm, there are more male CEOs named John than there are women. Board level representation has increased slightly, hitting 19.9%, although it remains well below parity.

According to the analysis, while recruitment is relatively even, and promotion to middle management appears to even favour women, the next steps up the promotion ladder to executive level favor men over women to the extent that just 14.2% of women are promoted into the segment – with analysis by Korn Ferry pointing out that most female hires therein are often into 'softer' HR-related functions.

“For most women in corporate America, the problem isn’t a glass ceiling—it’s a broken ladder,” said Andrea Ostby, a BCG partner and another coauthor of the report. “Our research shows that women are just as ambitious as men, but the daily grind and a lot of deep-rooted cultural issues at companies make them feel that the struggle isn’t worth it. So they make it only to middle management or—worse—leave companies entirely.”

Womens biggest concerns

Perception mismatch

There is a considerable mismatch of perception between executives (who tend to be men) and women, with regards to the main obstacles faced by women to climb the corporate ladder. Advancement, for instance, was the biggest noted concern (cited by 48%) among women surveyed, compared to around 15% of male executives that agree. Retention too was noted as a key issue by women, while male executive members exhibited a similar lack of concern as per advancement.

Male respondents (35%) were much more likely to cite recruitment as the major issue for the advancement of women, compared to 26% of women. Other areas of concern noted predominantly by women include company culture and leadership. One of the consequences of the mismatch in views may be that employers are focusing their transformation efforts in the wrong areas, thereby failing to solve any issues.

Gender diversity iniatives and perceptions

Program diversity

The consulting firm identified a range of different programs that are, in one way or another, perceived to be effective in reducing the gap between the number of men and women at the top of business. As part of the research, the firm categorized the project, highlighting one group of programs that tend to be underestimated in their potential value for improving conditions, particularly given the prevailing attitude of male executives.

Aside from the ‘hidden gems’, the firm also identified a group of generally effective measures as well as a group of relatively ineffective measures. Executive buy-in was noted as one area which improved outcomes; developing strong role models, matching career sponsors, and creating anti-discrimination policies were also identified as a means of improving outcomes.

Ineffective measures noted by the firm included: public discussion; isolated, one-time measures; one-to-one mentorship, which tends to become chats over coffee; and grievance systems.

Flexible work programmes

Hidden gems

According to the study, women perceive flexible work programs as the most effective means of improving gender diversity at businesses. However, while 59% of women cited it as the most effective, 38% of male senior leaders agreed with their assessment, ranking it as the #8 most effective intervention. One area of particular effectiveness in boosting retention, as noted by respondents, is maternity leave, with earlier studies highlighting that women who make use of maternity leave are 93% more likely to be back at work 9-12 months later.

Implicit bias has the unerring potential to skew decision making, while the decision maker remains unaware that the decision is partial. Such bias tends to be difficult to change, and is often denied by those under its influence, thereby creating a major barrier to effective change. Making implicit biases explicit, as well as training to improve deliberation, are possible ways forward.

Male involvement

Involving men as ‘diversity champions’ in the drive towards diversity was seen by 97% of female respondents as key to making good progress towards gender diversity at their company in the previous three years. A relatively stark contrast was revealed among the men, 39% of whom said that good progress was being made without such a champion. The involvement of men in senior positions in the support of diversity was shown to correlate with improved outcomes for diversity at businesses.

The gender pay-gap is another area in which more attention can be paid, given the negative effect on morale that unfair practices can have. According to Pew Research, the gender pay gap remains at 82%, though among workers aged 25-34, women earned 89% of what men earned. Though the pay gap has been narrowing, the job, as yet, has not been completed. 

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