The gender imperative
It wasn’t supposed to be like this. Corporate social responsibility reports for years have detailed commitments to gender diversity and specific initiatives around recruitment, mentoring and retention. Yet, despite considerable attention and specific actions, the state of gender diversity is about to go horribly wrong if findings of a new study prove correct.
“Senior executive women are heading for the exit ramps at an astonishing clip,” according to a major research initiative conducted by the Network of Executive Women (NEW), Mercer and Accenture. “The female executive population is projected to decline by more than 50% over the next decade.”
The study further contends that if there are no changes, women will comprise just 15% of executive positions in 10 years compared to 35% today.
So what went wrong? There are conferences devoted to women, the benefits of gender diversity – especially in a retail industry where women are the target customer – are frequently touted and there are countless initiatives focused on recruitment, development and retention. As researchers sought answers to the question of why senior female executives are abandoning the workforce at rates higher than male counterparts, two factors stood out.
“Women, particularly those in upper management, experience the workplace differently from their male counterparts,” according to researchers, “and there is a disconnect between what women value and what most corporate cultures offer.”
Because women don’t “feel the fit” that many men do as they rise through the ranks, they are being driven to leave corporate America to either find or create other organizations that better meet their needs, according to the study.
While things like experience, values and fit can be hard to define, and consequently measure, NEW, Mercer and Accenture made a valiant effort to do so. NEW surveyed more than 3,600 of its members along with U.S. employees in the retail and consumer goods industry, including 2,531 women and 1,270 men. Those surveyed represented all rungs of the corporate ladder from C-level to administrative support and sales roles with no direct reports. To take things a step beyond simply surveying workers, eight retailers and consumer goods companies shared actual data on their U.S. hiring, promotion and turnover representing more than 400,000 employees.
Taking this wider view of gender diversity did allow researchers to discover a positive development. From entry level through middle management, women are being hired and promoted at a rate on par with men, leading to improved representation in the lower half of the corporate hierarchy. That is a positive change because it gives organizations a larger pool of female candidates from which to promote. However, once those candidates land in more senior roles they are not sticking around, making it extremely challenging for major organizations with clearly stated diversity goals to achieve their targets, resulting in intense competition for top tier female talent. The study showed that women at the most senior level leave their jobs at roughly four times the rate as men.
WHAT TO DO?
Identifying a problem tends to be easier than finding a solution and so it is with the NEW/Mercer/Accenture research. The findings show a lack of support, lack of a clear career trajectory and inherent biases and corporate culture as reasons for a disproportionate number of senior female executive departures.
“Combine the lack of female role models in executive management with the sense of isolation that can come from being the only woman, or one of a few, with the lack of sponsorship, and you have a recipe for female leaders heading to the exit,” according to the study.
While the view of “why women leave” is clearer, actions to remedy the situation are elusive, vague and somewhat familiar. For example, the report touts the importance of mentoring, the need to create a new employee value proposition and a deliberate action plan for change.
“Increasing the retention and advancement of women in retail and consumer goods will take new thinking, an evolved strategy and deepened resolve,” according to the study.
WHAT ABOUT BOARDS?
Further declines in female senior executives is likely to have another long term consequence not specifically addressed in the analysis conducted by NEW, Mercer and Accenture; there will be fewer women with the desired business experience available for board service.
This phenomenon is already somewhat evident and companies looking to appoint female board members are faced with the same challenges as companies looking to recruit senior female executives from a limited, and potentially shrinking, pool of talent. For example, data from Equilar, a provider of board intelligence solutions for recruiting, development and executive compensation, shows that women appointed to boards are more likely than men to already hold a board seat. Nearly a fourth (24.2%) of women directors in the Russell 3000 serve on multiple public company boards, compared to 17.3% of men, according to Equilar’s data. In the first quarter of 2018 alone, the more than 60% of women who took board seats already had board experience compared to 53.6% of men.
In general, overall gender diversity at the board level is seen as improving. In the first quarter of 2018, Equilar’s data shows that 32% of new director seats went to women, an improvement from the 29.4% seen in 2017 and up sharply from the 17.9% of board seats that went to women in the 2014. Another noteworthy development evident in Equilar’s board diversity statistics is that the number of companies in the Russell 3000 index with all-male boards fell to 19.5% in the first quarter compared to 22.5% during the comparable period the prior year.
Whether at the board level or in the C-suite, the research from NEW, Mercer and Accenture is the loudest and latest warning signal on the topic of gender diversity for an industry that has received numerous warnings previously.