Having a diverse executive team improves company performance. This isn’t just my opinion; it’s supported by a growing body of academic research, including a new study from S&P Global Market Intelligence which shows that organisations with female CEOs and CFOs produce superior stock price performance, compared to the market average. What’s more, the study showed organisations with a high gender diversity on their Board of directors outperform their competitors. Yet men still fill the vast majority of executive positions, resulting in a gender pay gap on a national scale. Why is this the case, and what can we do about it?
There are many factors at play here. Unsurprisingly, unequal gender distribution in business reflects a society-wide legacy of historic discrimination. Some sectors, such as Healthcare, Engineering, Construction and Technology have traditionally employed a much greater proportion of men in specialist and senior roles. Changing times mean that women now do pursue careers in these sectors, but may still face barriers within the organisation or feel that they don’t fit in what has always been a stereotypically male-dominated environment.
It can be hard to overturn such deep-rooted beliefs; many theorists argue that gender role ideations begin in early childhood and are perpetuated at home and at school. However educational institutions and companies too are doing ever more to change the perception of certain roles and encourage women to explore a different path – the latter by often actively seeking female talent.
Secondly, traditional recruitment practices can harm gender diversity at every level of the organisation. Female employees dominate lower-level roles in certain sectors like Care, Hospitality and Retail; such roles are often aimed at women due to availability of flexible and part-time hours, the idea being that this allows them to better balance earning money with family life. Meanwhile men are steered towards full-time roles with greater managerial potential.
However, companies are starting to look at their recruitment processes and seeing if they can strip out bias between roles, right in the early stages – and this can only be a good thing for the future of women at work.
A third factor is family and home life. According to the ONS, women still do 60% more household work than men when it comes to cooking, childcare and housework. These additional responsibilities can put the brakes on progressing a career and subsequent salary growth; for example, taking a career break to have children, or caring responsibilities which make full-time work impractical. Companies can help ensure their female employees continue to succeed at work by promoting shared parental leave, condensed hours, and flexible working opportunities.
Finally, there is a perception that women are ill-suited to being on a Board or in a senior role. My view is that this likely stems from a stereotypical view of differences between genders when it comes to management styles, communication styles, an appetite for risk or general confidence to succeed at the very top of a business.
We have made some progress, but companies need to try harder if we're really going to break the mould and re-shape the gender gap any time soon. A starting point would be not only offering better training for women to boost confidence in their abilities, but also coaching both males and females on the added value of having diverse Boards.
We have a long way to go on this, but the future is looking brighter for having more diversity at the top and shrinking that gap. All we really need now is for companies to think harder and implement policies that allow all employees to pursue a career - equally.
If you’d like to discuss gender pay at your organisation, please get in touch with me at sarah.lardner@innecto.com or call 020 3457 0894.
