Well-Intended Efforts Not Improving Workforce Progression of Women

courtesy of Mercer

A first-of-its-kind analysis links global practices to outcomes and calls for new approaches.

Women, who continue to be underrepresented at most levels in the workforce, are not progressing in their careers despite two decades of organizational efforts to achieve gender diversity and equality, according to new global research from Mercer, When Women Thrive, Businesses Thrive. Among survey participants, if current approaches continue unchanged, only one third of executive positions will be held by women over the next 10 years. In the mature economies of the U.S. and Canada, however, just one fourth of women will hold executive positions by 2024, while female representation in developing countries is expected to grow more rapidly.

“While the diversity efforts of the past several decades have resulted in some improvements in women’s participation rates and career trajectories, our research shows that we’re still decades away from true gender equality—if we keep doing what we’re doing,” said Pat Milligan, president of Mercer’s North America Region. “It’s time to act differently to realize the benefit of their full participation and address the unique needs of female employees.”

“We were pleased to collaborate with Mercer on this groundbreaking research that assesses the actual patterns of gender representation to uncover what really drives gender diversity in organizations,” said Aniela Unguresan, cofounder of EDGE Certified Foundation, which has established the only global business certification in workplace gender equality. “It is clear that incremental change does not significantly move the needle. Disruptive change does.”

According to Mercer’s research, which broadly assesses the impact of organizational practices and policies on the representation and advancement of women in the workforce, organizations are still far from achieving gender equality. Despite making up 41 percent of the workforce globally, women’s highest representation among all career levels is in support staff roles. Women make up 40 percent of the workforce at the professional level and 36 percent at the managerial level, but only 26 percent of senior managers and 19 percent of executives.

“Our research shows employers that are focused on holistic solutions to build diversity are most successful—and organizations applying predictive analytics to link specific programs and talent strategies to the advancement, engagement and retention of women are most effective,” said Brian Levine, innovation leader for Mercer’s North America Workforce Strategy & Analytics consulting business.

Key Drivers of Gender Diversity
A key finding of Mercer’s research shows that the active involvement of senior leaders in gender diversity leads to greater, accelerated representation of women in executive roles more than accountability alone. Yet, just more than half (56%) of organizations indicate that their senior executives are actively involved in diversity and inclusion programs.

Furthermore, a dedicated team responsible for pay equity leads to more women in senior roles while common policies—those intended to ensure equity through flexible work schedules and leave programs—are, in the absence of management, associated with slower improvement in the number of women in leadership positions.

Mercer’s research also shows that nontraditional solutions to gender diversity positively impact an organization’s long-term ability to engage and retain female talent. For instance, more diverse retirement programs, including monitoring savings by gender, providing investment training customized to different gender realities, and gender-specific health education campaigns correlate with greater representation of women at senior levels. Yet, fewer than 15 percent of organizations monitor savings and offer retirement programs customized to different gender behaviors.

“Clearly, companies can do better in addressing and progressing gender equality in the workplace and leveraging the capabilities of a diverse workforce,” said Ms. Milligan. “Given the size of the untapped female workforce, greater participation of women has major implications for the economic and social development of communities and nations as well as business outcomes and performance.”

Priorities Vary by Region
With women making up just 41 percent of the workforce globally, with higher representation in the U.S. and Canada (48%) and significantly lower in Europe/Oceania and Latin America (37% and 33%, respectively), organizations worldwide are far from achieving gender equality.

In terms of hiring, women in the U.S. and Canada lag behind their male counterparts at every career level except the professional and executive levels, while women in Europe/Oceania lag behind in all but the manager level. Organizations in Latin America are the most aggressive in hiring women at entry-levels, but female hires begin to lag behind male hires above the manager level.

While current efforts to move more women into top roles over the next decade will impact representation of women in the future, it will vary greatly by region. In the U.S. and Canada, the number of women at the highest ranks is on track to remain essentially flat over the next 10 years, with 26 percent of executive roles held by women in 2024 compared to 24 percent today. However, organizations in Europe/Oceania could make substantial gains in gender equality at the top of the house over the next 10 years as organizations in this region are expected to increase the number of women in executive roles from 18 percent to 47 percent. Latin American organizations could also show significant growth in female representation at the executive level over the next decade, with growth expected to advance from 12 percent today to 39 percent by 2024.

Importantly, how well organizations make use of female talent is a function of how well they attract, develop and retain them. Mercer’s research indicates that organizations confident in their ability to attract, develop and retain female talent—after considering the broad set of programs covered—have more favorable representation of women in senior positions in the long term.

From a talent management perspective, optimal strategies vary across regions. In the U.S. and Canada, companies should focus on improved equity in promotions since women are hired at lower rates. In Europe/Oceania, companies need to improve hiring of women. Organizations in Latin America should focus on retaining women at better rates. Consistent across all regions is the need to focus on retention of women in executive roles. iBi

Mercer, a global leader in talent, health, retirement and investments, is a wholly owned subsidiary of Marsh & McLennan Companies. For more information, visit mercer.com.

About the Analysis
Mercer’s proprietary research, When Women Thrive, Businesses Thrive, developed with advisory support from EDGE Certified Foundation, analyzed workforce data for more than 1.7 million employees in 28 countries, identifying what organizations can do to fully engage women in the workplace. To learn more about the findings and download the report, visit mercer.com/services/talent/forecast/gender-diversity.html.