Facing the Gender Gap Today—for Success Tomorrow

By Pat Milligan, Senior Partner and Regional President-North America, and Brian Levine, Partner, Mercer

Tomorrow’s workforce is taking shape today. But business leaders should ask themselves if they have adequately addressed the issue of gender equality and are on a path to building greater workforce diversity.

Despite years of progressive policies, current female hiring, promotion and retention rates are simply insufficient to dramatically improve gender representation over the next decade. Fortunately, the risk of an inadequately diverse global workforce can be met by proactive leadership.

Falling, Not Rising, Equality

The World Bank recently reported that global labor force participation rates for women ages 15 to 64 have actually declined over the past two decades. And “The Human Capital Report,” released by the World Economic Forum in partnership with Mercer in 2013, found that only 60 to 70 percent of the eligible female population participates in the global workforce—compared with male participation well above 80 percent.

And while talent flows will move more women into senior roles globally, equal representation is still far off. Unless organizations focus on gender-based equity in promotion opportunity, progress—particularly in the United States and Canada—could stagnate. Those forecasts reflect recent Mercer data on workforce representation and “internal labor market” flows (e.g., hires, promotions and terminations) submitted by 164 companies in 28 countries covering 1.7 million employees—including more than 680,000 women.

Beyond Broad Brushstroke Solutions

The resulting report, “When Women Thrive, Businesses Thrive,” challenges today’s corporate leadership with finding fresh solutions beyond the traditional leave and flexibility programs long viewed as progressive, since the status quo is clearly insufficient to drive improved outcomes.

These programs are associated with unintended consequences—especially in the absence of leadership engagement and manager training on inclusion. Companies need to ensure they steer clear of unconscious bias and provide effective career coaching to employees taking advantage of such opportunities.

In fact, the research calls for more dynamic approaches that go beyond the broad brush of flex time and family leave. Executives need to champion innovative programs that target women’s unique health and financial needs. For example, gender-customized retirement solutions geared toward women’s savings behaviors, especially given differences between women and men in longevity, can create a differentiating value proposition.

Educational programs geared to promote women’s unique health needs are also part of the solution. And strong programs to promote gender pay equity, especially the alignment of robust, proactive checks on compensation levels with the annual compensation calendar, are associated with improvements throughout the system, including better levels of female representation.

Need for Organization-Specific Strategies

If anything, the research suggests that a siloed approach to gender diversity is counter-productive. Analysis of the data shows that organizations that focus on holistic approaches to support female talent have more comparable talent flows for women and men than those that do not.

Such a broad focus should include consideration of compensation and benefits, as stated above, but can only be optimally configured through a disciplined, statistical review of an organization’s own employment data, which might show, for example, the value of exposure to supervisory and/or critical roles, the importance of internal mobility or a need to eliminate bias in performance review processes.

Embracing the Opportunity to Change

Executives need to admit there is a problem—but acknowledge and embrace the opportunity. Organizations should then base their gender diversity strategies on robust workforce analytics, identifying the drivers of and barriers to gender equality. From there, diversity strategy should be aligned with talent strategy, so that gender diversity programs don’t run counter to how talent is managed, whether the firm tends to “build” or “buy” talent.

Importantly, gender diversity programs should only be implemented in the context of an enabling environment, one that actively encourages women to effectively utilize available programs and benefits in the context of their overall career development.

Collaboration will also have a positive impact on the female talent pipeline. Leaders can position their organizations for success through alliances with other key stakeholders to influence the supply of female talent—including schools, governments, public health organizations, industry groups and NGOs.

To ensure tomorrow’s global business success today, organizations need a mix of different skills. A truly gender-diverse workforce is a vital key to that success. Ultimately, optimal gender diversity takes more than having a standard diversity policy and traditional programs.