WRITERS: Dr Sanjee Perera, Dr Jill Gould, Dr Shruti Sardeshmukh, Professor Carol T. Kulik, Dr Yoshio Yanadori and Dr Ruchi Sinha
The Fourth Industrial Revolution is disrupting almost every industry in every country, creating massive change at unprecedented speed. As organisations implement smart technologies into their workflow, they’re asking employees to reinvent the way they do business and the way they interact with customers. To take full advantage of Industry 4.0 technology, we need to unlock employee creativity. Gender diversity could be the key.
THE SCENARIO As Industry 4.0 disrupts almost every workplace, professional services will need to find new, creative ways to interact with customers. Gender diversity has proven links to innovation, yet Australia's professional services firms are still lacking gender balance.
THE SOLUTION The good news is that every manager can play a role in building gender diversity. These six evidence-based switches will help you jump-start positive change in your business.
When men and women work together, employees receive continuous visible cues that people are different, and those cues motivate employees to ask more questions, dig deeper, and explore more options as they work on problems. As a result, gender diverse workgroups generate a wider range of innovative solutions than all-male or all-female groups.
This well-researched link between gender diversity and innovation may be particularly important in professional services firms, where legions of lawyers, advertising professionals, architects, accountants, financial advisers, engineers, and consultants deliver customised, knowledge-based services to a wide range of clients.
It’s disappointing, then, to see so few women in professional services, especially at the top of organisational hierarchies. Around the world, less than one per cent of CEOs in professional services firms are women. Furthermore, only about nine per cent of senior consulting leaders are female.
In Australia, the sector-specific statistics are worrisome. While we have nearly equal numbers of men and women in the legal profession, women constitute only 27 per cent of partners in Australian law firms. In finance and insurance services, the gender pay gap is more than 30 per cent, or $48,884 per year. With so much evidence of gender inequity, it will only become more difficult to attract women to male-dominated occupations. Only 12 per cent of engineers working in Australia are women, and the number of women choosing engineering degrees in Australian universities has been declining since 2014.
How can professional service organisations begin to create environments where men and women can thrive? Gender inequity is a systemic problem and fully addressing it will require strong leadership commitment and dramatic cultural change. But when even the most optimistic estimates from the World Economic Forum suggest it will be many decades before we achieve gender parity, who has the time to wait?
We’ve identified a series of evidence-based switches that any manager, at any level, can use to jump-start positive change within their organisations.
- 1. NARROW THE GAP
THE ISSUE: The gender pay gap starts at organisational entry. Women are less likely to negotiate starting salaries, so they often start jobs with lower pay than men. Once hired, women usually receive smaller pay rises than men for the same performance rating – so the pay gap between men and women widens as their careers advance. Gender-blind pay procedures don’t eliminate pay gaps on their own. If an organisation offers new hires (regardless of gender) a standard increase over their previous salaries, it simply perpetuates gender pay gaps in the market.
While we know that pay audits and pay transparency are central to closing pay gaps, most organisations are unaware of their own gender pay gaps, which leaves managers without easy access to and knowledge of this information. So, managers’ hands are tied as they can’t assess how their pay decisions might be contributing to internal gender pay gaps.
THE SWITCH: Managers who receive pay information – pay rise averages, ranges, and standard deviations, each broken down by demographic groups – typically exhibit less gender bias in pay rises. You can use the Workplace Gender Equality Agency’s Data Explorer to see if your organisation has done a gender pay analysis. If it has, ask your HR unit for the data (broken down by demographic groups) so you can monitor the gender pay gap across the employees you manage. And, if your organisation hasn’t undertaken a gender pay analysis, recommend one to HR.
- 2. MODEL FLEXIBILITY
THE ISSUE: Even in today’s modern society, women still shoulder more of the responsibility for child care and housework. This makes them more dependent on their organisation’s flexibility practices than their male counterparts. Workplace flexibility helps men and women to juggle their work and non-work responsibilities, and research demonstrates that organisations offering flexibility enjoy higher employee productivity and retention. Organisations that offer flexibility more effectively retain female employees during their 20s and 30s when women are building their careers and likely to be starting families. That retention could have a payoff later, when women are promoted into management roles.
Yet, research shows that many women are reluctant to take advantage of flexibility practices within their organisation, fearing that managers will see them as less committed to their work, and less promotable. As a result, even the best flexibility policies may remain ‘on the books’.
THE SWITCH: Get to know your organisation’s flexibility policies and signal your openness to supporting them. You can do this during performance reviews, by asking every employee (not just the women) about the kind of flexibility that might make them more productive. Some organisations limit job categories that are eligible for flexible work. If your organisation is one of these, ask HR why your organisation doesn’t have an ‘all roles flex’ policy. Practice what you preach too. Make sure you use your organisation’s flexibility options, and when you do, do it loudly! Let your team know you are leaving to see your daughter’s football match or your son’s school play, so they know you’ll be supportive when they need to take flexi themselves.
- 3. HIRE MORE WOMEN
THE ISSUE: If you want gender diversity, you must hire women. Unfortunately, when occupations, organisations, or jobs are male-dominated, applicant pools are too. Here, it’s not unusual for hiring panels to consider shortlists that have no women or, at best, include only one female candidate. That’s bad news, because research demonstrates that the statistical odds of hiring a solo woman on a shortlist are zero, and that’s true for shortlists ranging from 3 to 11 candidates. The shortlist provides clear evidence to the hiring panel that the solo female candidate is different from the norm, and differences signal risk. No one wants a risky hire, so the woman is typically not selected.
When two females appear on a shortlist, the odds of hiring a woman become consistent with women’s proportional representation on the shortlist: two women on a four-person shortlist means a 50 per cent chance of hiring a woman; two women on a five-person shortlist means a 40 per cent chance, and so on. The critical jump is going from one female candidate to two. Once there is a second woman on the shortlist, the ‘high risk’ flag disappears, and each candidate is considered on his or her merit.
THE SWITCH: When you’re hiring, insist on a minimum of two female candidates on every shortlist. If your recruitment firm sends fewer than two female candidates, send it back and tell them to cast a wider net. And, if your recruitment firm still sends you fewer than two female candidates, it’s time to find a new recruitment firm.
- 4. SHRINK THE SCALE
THE ISSUE: Gender stereotypes can exist in any organisation, but the unique nature of professional services means their effects are exacerbated. Research shows that women receive less credit for team successes (and disproportionate responsibility for team failures); as professional service firms often deliver work in teams, it’s particularly hard for a woman’s individual contribution to stand out. Furthermore, because the work performed by professional service employees is non-standard and tailored to individual clients, performance evaluations are likely to include subjective impressions (think ‘team player’ or ‘charismatic leader’) along with objective indicators of performance. Those subjective components are especially vulnerable to gender bias. As a result, women tend to be disadvantaged in performance reviews. This is especially true when managers evaluate employees on rating scales with many options – such as rating an employee’s performance on a 10-point scale rather than a 6-point scale. At the top end of larger scales, managers are looking for perfection. But managers are more likely to attach labels like ‘star’ and ‘genius’ to high-performing men; women don’t usually elicit these labels even for the same level of performance.
THE SWITCH: The next time you conduct performance reviews, take a close look at the rating scale and ask yourself if you are viewing men and women’s performance in the same way. If your organisation uses a scale with many options, first rate an employee’s performance using a smaller set of options. Then, when you transfer your ratings to the larger scale, generate specific examples of the behaviours and outcomes that justify the highest ratings. Ask your HR unit whether a smaller scale might be more appropriate for your organisation.
- 5. CREATE CONNECTIONS
THE ISSUE: The job structure of professional service organisations presents specific challenges for women’s advancement. Such organisations tend to be characterised by relatively short career ladders, an emphasis on internal advancement rather than external hiring, and expectations that employees work gruellingly long hours to develop relationships both within the firm and with external clients. Employees’ career success depends on their ability to quickly establish networks that give them the connections and the visibility they need. But relationships usually form around similarities, making it especially difficult for women in male-dominated occupations to build networks quickly. Furthermore, when there are fewer women in the workplace, similarity-based relationships will build networks that are smaller and flatter for women than they are for men. This means that women can’t access the same information that men do; they can miss out on the best projects and have fewer opportunities for promotion.
THE SWITCH: Play an active role in helping your employees build networks – especially your female employees. Schedule social events during business hours to avoid potential conflicts for employees with childcare responsibilities; adopt job rotations and cross-functional teams so that employees get to know people outside their immediate unit; and introduce your employees to your own managers, so those who are different know they aren’t invisible.
- 6. MAKE AN INVESTMENT
THE ISSUE: Gender diverse workforces can generate creative ideas for new products and services, but they need a ‘green light’ to get the go ahead. Unfortunately, research shows that ideas coming from women are 20 per cent less likely to win an endorsement than ideas from men, and that’s because decision makers evaluate pitches from women differently than pitches from men.
Researchers studying startups found that investors asked female entrepreneurs more questions about how they would avoid failure (prevention-focused questions like “how will you defend yourself against the competition?”) yet asked male entrepreneurs about their anticipated successes (promotion-focused questions like “how big do you think you can grow the business?”). The implications are huge: when investors mostly asked promotion questions, startups raised US$16.8 million on average; yet when investors asked prevention questions, the startups raised only US$2.3 million.
THE SWITCH: Prepare a set of questions you’d ask any employee (male or female) who comes to you with an idea. The mix should include prevention questions – after all, you want to know the downside risk – but you should also ask promotion questions about every project, no matter who delivers the pitch. Best of all, you can apply this switch on both sides of the organisational boundary: when employees come to you with a new idea, or when clients ask for your services to support their own ventures.