The economic landscape in 2023 is looking increasingly turbulent. Management teams looking to optimise performance and maximise profits should, now more than ever, consider gender diversity in their workplaces.
'More diverse leadership teams deliver better performance outcomes'. That’s the message from a recently released report called 'Beyond lip service: tracking the impact of the gender diversity gap’.
So, how gender-diverse are Australian workplaces, and how can we continue to improve in 2023?
Current progress on gender diversity
Over the last 10 years, we’ve made real progress toward gender diversity in the workplace. The ‘Beyond lip service’ report describes how, 'starting from… 10% in 2011, [the number of women on boards] has steadily increased to just below 30% by December 2021… the number of women in senior management has also increased from 12% to 26%'.
Though this is encouraging, there is still much to do. The Chief Executive Women 2022 Senior Executive Census report explains how women at board level predominantly occupy ‘functional’ roles with no direct profit-loss responsibility, including HR and marketing leadership, legal, IT, and others. Unlike ‘line’ roles such as Chief Operating Officer, Managing Directors and Group Executives, ‘functional’ roles do not typically become CEOs.
Indeed, beyond an overall increase in female board members, there remains a glaring absence of female CEOs. 'Women constitute 42 percent of all employees, yet make up just a quarter of executives and only 10 percent of CEOs for large, for-profit companies', says a report compiled by consultancy McKinsey&Company.
The CEW 2022 Census presents a similar concern. 'It will take 100 years for women to make up at least 40 percent of all CEO positions at the 200 biggest companies in Australia'.
The McKinsey report summarises the situation by saying: 'While Australian companies are increasingly active in their efforts to drive gender equality, women remain underrepresented at every stage of the career pipeline in Australia'.
Benefits of gender diversity
This is despite growing findings that gender diversity benefits more than just women. Dr Joanna Nash, one of the co-authors of the ‘Beyond lip service’ study, explains the methodology her team used:
'To understand the impact of gender diversity on company performance and investment returns, we cross-referenced the gender data with multiple company attributes such as return on equity and profit margins'.
'The analysis showed a clear correlation between greater diversity and better company performance'.
Evidence from across the globe attests to this fact. A diverse workforce naturally has a more diverse perspective, and therefore a more creative, flexible approach to problem-solving. Everything from organisational culture to operational efficiency can be improved by diversifying leadership. 'There is a wealth of evidence that businesses with gender balance outperform others - when it comes to productivity, profit, decision-making, retention and culture', says the CEW Senior Executive Census.
Social movement
National problems require nationally calibrated solutions. Just as guidelines were introduced for public companies to report the number of women on their boards, so too can a regime of publicly tracking and monitoring change in the most senior of executive positions encourage the further promotion of female talent.
In a recently published article in the Australian Financial Review, Andreea Papuc proposed that, 'We should start to more rigorously track females in COO, CFO, CIO/CTO positions - the line roles that feed into CEO - to monitor how companies build a solid pipeline of executive female talent'.
How to create change in your organisation
Now that the business imperative of gender diversity is clear, the only question left is how to effectively implement it.
In this, the McKinsey report proves an invaluable guide. Through analysing companies where successful efforts have been made to improve gender diversity, the report identifies 10 clear actions you can start encouraging in your organisations today.
1. Build a strong case for change
Don’t automatically assume that change efforts will be supported - or even understood - by those who might be asked to carry them out. Your own company’s performance and diversity data can be the most powerful piece of evidence you have - so make sure you’re also collecting the stats to begin with!
2. Role-model a commitment to diversity
As a senior executive or manager, it’s important to ‘walk the talk’ when it comes to gender diversity. This could mean ensuring your own staff is gender diverse, visibly and authentically supporting company diversity events, and personally making use of flexible working arrangements.
3. Redesign roles to enable flexible work
'The factor most correlated to higher ratios of women in top roles is the percentage of managers who are on part-time programs', reveals the McKinsey report. It’s crucial, therefore, to stop stigmatising women asking for flexible work, and instead to ensure roles can accommodate differing personal needs - for both women and men.
4. Actively sponsor rising women
Research cited by McKinsey suggests that women have fewer C-level sponsors than men and less access to them, and that their sponsors are less active in putting them forward. Correcting this imbalance will give more women the confidence and guidance to step forward.
5. Set (and stick to) clear diversity aspirations
Clear, time-bound, publicly available company goals help to keep all involved in the change effort motivated and accountable.
6. Support talent through life transitions
Research links investments in family support measures, such as parental networks or childcare referral services, to lower resignation rates.
7. Support a more inclusive and flexible workplace
Technology that enables remote work and more flexible physical spaces are just two ways to give people more options.
8. Challenge traditional views of merit in recruitment and evaluation
Higher-performing companies consistently monitor their recruitment and evaluation procedures for unconscious bias, and systematically intervene to create cultural and procedural change.
9. Invest in frontline leader capabilities to drive cultural change
Frontline leaders are critical to actually implementing policy changes. They must be properly supported with close guidance and training to adapt to the inevitable operational changes.
10. Develop rising women and ensure experience in key roles
All of the above points towards ensuring there are more women in the ‘line’ roles leading towards CEO. Appropriate professional development programs should be put in place to support this group.
Conclusion
With Australia starting down the double barrels of high inflation and a national skills shortage, the increased participation of women at all levels of the workplace is absolutely essential for success. Gender diversity means improved performance. It’s in everybody’s interest to continue to strive toward it.
