By Veronica Perry, reporter at Grow Wire
⏰ 6-minute read
Research shows that in many cultures, companies thrive when they foster equality across genders and minority groups.
While many U.S. sectors have made great strides in their number of women in leadership positions, women’s representation lags behind in business.
There are actionable steps businesses can take to evaluate their current levels of equality and move forward to improve it.
When it comes to organizational justice, or how employees evaluate fairness in the workplace, businesses are taking equality more seriously. Many organizations are seeing benefits from an increased focus on diversity and inclusion initiatives.
In this article, we’ll discuss the importance of equality -- with gender as a main topic, though the concept refers to age, race, sexual orientation and more -- and methods to evaluate and increase its levels in your business.
When equality is valued, diverse companies see returns.
This year, the Harvard Business Review released a research report that delves into the aspects of gender diversity that amplify productivity. The study looked at over 1,000 firms worldwide and collected both financial performance and gender diversity data for each. Researchers measured the significance of gender diversity in each company in two ways: first, identifying the number of women who held board positions and second, whether the companies had publicly announced pro-diversity policies or programs.
Findings indicated that diversity in a company only affects the bottom line if the company belongs to a country or industry whose culture places value on diversity. Companies in countries and industries where gender diversity is not the cultural norm, however, do not see any financial effect of maintaining diversity.
👉 Research indicates that diversity in a company only affects the bottom line if the company belongs to a country or industry whose culture also values diversity.
In other words, companies and employees must fundamentally value diversity themselves for it to create positive results.
One example mentioned in the article touched on the contrast between telecommunication companies in Western Europe (which tend to be more gender-inclusive) and the energy sector in the Middle East (which tends to be less inclusive to women). The data indicated that, for the telecommunication companies, gender inclusivity was directly related to the market value of the company (“a 10% increase in Blau’s gender diversity index, related to a roughly 7% increase in market value”).
About five years ago, management consulting firm McKinsey and Company found that “companies in the top quartile for gender diversity are 15% more likely to have financial returns above their respective national industry medians.” According to a 2017 expanded data set, that number has grown to 21%. This same data set showed that executive teams with gender diversity are “consistently positively correlated with higher profitability across geographies.”
Research suggests that diversity yields more payoff in industries that already tend toward inclusivity, like telecommunications.
The typical U.S. company doesn’t have equality.
In the United States, we are on the path to achieving workplace equality in many sectors. Take politics for example: In just over 50 years, women have increased their representation in the U.S. Senate from under 10% to just over 25%. The House of Representatives has also made steady advances, with the female members compromising almost 25% of House members.
If you examine Pew's 2018 trend charts on women leaders, you’ll see that, over the course of 50 years, almost every chart exhibits a similar growth pattern -- from board members to university presidents and legislators. The charts depict consistent increases in female leadership representation in those sectors from almost none to about 25%.
However, only 4.8% of Fortune 500 CEOs were female in 2018, according to Pew. Not to mention, there is still a significant corporate gender and cultural wage gap. Catalyst released a study this year that showed white women hold 32.5% of all corporate management positions, a significant difference from Latinas (who come in at 4.1%), black women (3.8%) and Asian women (2.4%).
👉 Only 4.8% of Fortune 500 CEOs were female in 2018.
We have come a long way, but women -- predominantly those of minority backgrounds -- still go largely underrepresented, particularly in specific industries. There are very few female leaders in manufacturing, legal services, software, information technology, finance and commercial real estate. Women hold 21% of U.S. leadership positions overall, below the 24% global average.
Overall, these stats tell us that females -- especially diverse females -- are underrepresented in corporate leadership.
These gaps affect employee morale at many organizations. Harvard Business Review recently released another study suggesting that women of color feel generally unsupported in the workplace, even at companies where diversity and inclusion are prioritized.
The study surveyed nearly 800 women nationwide and asked questions such as, “How much do you trust your organization to do right by you?” Many firsthand accounts from black and Latina women described feelings of exclusion and isolation in the workplace.
Surveys report that gaps in gender and race representation create feelings of exclusion for employees.
When it comes to gender equality in the workplace, change starts with you.
The Female Quotient (FQ) is a female owned consulting firm that employs bootcamps, machine learning, data analytics and tailored research to help businesses advance equality. Their manifesto is rooted in data.
“Research shows that when women reach a critical mass of influence and make up about 20 - 30% of leadership positions, the power dynamics shift,” says CEO Shelley Zalis. “We’re building a community to create a critical mass of influence so that we can transform workplace culture.”
“Research shows that when women make up about 20 - 30% of leadership positions, the power dynamics shift."
Zalis believes equality is a choice and emphasizes that “it’s time for companies to be accountable for change, and to not hide behind excuses.” She also stresses that leadership should have an empathetic or “equality mindset.”
“It's important for leaders to put themselves in other shoes,” Zalis says. “Organizations who have leaders embodying the purpose of equality will bring others along with them. Change happens when we create accountability, so it’s important to start tracking metrics and holding leaders accountable for reaching D&I goals, just like any other business objective.”
Company leaders are primarily responsible for initiating a change in their company's gender culture, according to Zalis.
Measure and improve the “equality health” of your workplace in four areas.
The FQ uses four essential elements to measure the “equality health” of organizations and create action plans to improve safety, inclusivity and fairness in the workplace. These elements include: advancement, parity, leadership and culture.
The FQ provides actionable methods to increase equality pertaining to each element. If you’re already running the bullet-pointed initiatives below, chances are your company is healthy in that elemental area. If you’re not, however, consider working these initiatives into your business plans.
Your business’s parity health involves equality in compensation, hiring and the suppliers it partners with.
Create, implement and track diversity initiatives in your workplace.
Record gender metrics and compensation using a gender wage gap calculator.
Review your company’s job descriptions and interview questions with equality in mind.
Invest in anti-bias training for hiring committees, and recruit from underrepresented communities.
Prioritize partnerships with suppliers owned by women, minorities, veterans, members of the LGBTQ community and historically under-utilized businesses.
Leadership requires a conscious mindset, goal-setting and accountability from executives and managers.
Clearly define KPIs, then research diversity representation when sponsoring events.
Cultivate a psychologically safe environment where sharing feedback is welcomed and transparency, empathy and compassion are prioritized.
Lead with empathy: “I’ve learned that caregivers make the best leaders today, yet we’re losing our best leaders to caregiving,” Zalis says. “The workplace needs traits associated with caregivers now more than ever, such as nurturing, empathy and collaboration.”
Advancement relates to mentorship, sponsorship and education.
Create formal opportunities for your teams to coach and mentor. Particularly, The FQ believes that “formal mentorship programs should use professional and personal aspirations as criteria to match employees with mentors.”
Provide a culture of on-the-fly mentorship: “When it comes to mentorship, most people think you need to find that one perfect mentor who holds all the answers to all the career advice you need,” Zalis says. “I actually believe in something we call ‘mentorship in the moment,’ where you can gain bite-size pieces of advice anywhere from anyone.”
Optimize productivity in multigenerational teams.
Map clear pathways to advancement for team members.
Culture encompasses policy, organizational structure and training.
Invest in mindfulness training for your employees.
Consider social reciprocation: Create a basic culture of treating others as you want to be treated.
Work to ensure everyone is heard in meetings.
Accommodate new parents with benefits such as paid parental leave.
🌱 The bottom line
We know there are measurable returns to prioritizing equality and diversity in the workplace. And although each business is unique, there are methods to improve equality that garner results across the board. Use this information to implement new policies and increase employee satisfaction, and enjoy the financial returns.