We could be focusing on the wrong things when trying to progress gender equality at work, says this academic expert. So what should HR professionals and leaders actually be focussed on?
International Women’s Day (IWD) is always a tricky date on the HR calendar. It’s positioned as a time to reflect on progress made and to celebrate the contributions that women make to their organisations and communities.
But celebrations and cupcakes can feel inauthentic when Australia’s progress towards gender equality is regularly described in the media as not just slow, but glacial. Despite regulatory pressures, women’s representation on the boards of the ASX-200 hovers just above 30 per cent and women’s representation on the boards of smaller ASX-listed companies is far lower.
The gender pay gap has been stubbornly stable, with only a five per cent change between the largest gap (18.5 per cent in 2014) and the lowest (13.4 per cent in 2020).
Rather than celebrating progress, HR academics and professionals, and leaders might prefer to use IWD as an opportunity for some soul searching. What can we do differently to motivate organisations to act on gender inequality?
It might be time to change the message.
Move beyond the ‘business case’
HR researchers and professionals have been working hard to build a business case for gender equality, to demonstrate that women in leadership roles help organisations’ bottom lines. But our enthusiasm for the business case is leading to an overly narrow focus on financial performance as the most important outcome of gender equality.
The problem is not that the news is bad. In fact, there is substantial evidence in Australia-specific individual studies – e.g., Ali, Ng and Kulik 2014; Cassells and Duncan 2020; Vafaei, Ahmed and Mather 2015 – and in international meta-analyses – Hoobler, Masterson, Nkomo and Michel 2018; Jeong and Harrison 2017 – that women’s representation in leadership roles can be linked to firms’ financial performance. The problem is that the effect, even when it is positive and statistically significant, is small.
For example, a meta-analysis that aggregated 78 individual studies spanning 117,639 organisations found an overall population correlation of .023 (aggregating across women’s representation in leadership roles and a wide range of financial performance measures). It’s impressive that there is any positive association, given that women are so often appointed to leadership roles under the worst possible circumstances. But .023 is not likely to motivate organisations to act on gender inequality.
When we focus too heavily on financial outcomes, we risk raising managers’ expectations to unrealistic levels and losing their confidence in research-based recommendations.
The benefits of women in leadership roles are most visible on long-term financial indicators; there is even a negative association between women’s representation in leadership roles and short-term stock market returns. If firms do enjoy financial benefits, but later experience a downturn in financial performance (for whatever reason), they might conclude that their investment in female leadership was not worthwhile and withdraw further support – derailing gender equality just as it was gaining momentum.
And depending on their location, some firms may never experience financial benefits from women in leadership roles. In low gender-equality countries (where they most need companies to take steps towards gender equality), companies are least likely to be financially rewarded for their actions.
Want to learn how you can change the narrative on gender equality in your organisation? AHRI members can access the free, member-exclusive International Women’s Day discussion, which includes a keynote address from Holly Ransom, on Tuesday 8 March. Sign up today to attend and to receive two CPD points.
What can we do instead?
We don’t want to stop investigating (or celebrating) the financial impact of gender equality. But we can beat the drum harder for other important indicators of the value of gender equality in organisations.
We know, for example, that engaging more women in leadership roles makes organisations better for a wide range of stakeholders: for employees, by increasing employee participation and diversity initiatives; for customers, by introducing more innovative products and services; and for communities, by leading to more social responsibility and philanthropy. Engaging more women in leadership roles is even associated with better COVID-19 outcomes.
These findings are already in the academic literature, so the challenge is making them more visible to the senior leaders who can drive change.
One strategy might be to place an economic value on the ‘soft’ outcomes delivered by gender equality. For example, can we price the reputational value of the increased innovation and philanthropy that gender-diverse leadership teams deliver? Can we price the attraction and retention value of the employee participation and social responsibility practices that gender-diverse leadership teams adopt?
“Celebrations and cupcakes can feel inauthentic when Australia’s progress towards gender equality is regularly described in the media as not just slow, but glacial.”
Widening the outcomes, and simultaneously identifying their value in relation to an organisation’s strategic goals, links gender equality to the organisation’s long-term sustainability rather than to its short-term profits.
We also need to become more comfortable making moral and social arguments for gender equality. In business settings, moral language is sometimes more influential than economic language, especially when the moral language aligns with an organisation’s values or mission.
HR researchers and professionals might break through stakeholders’ attentional wall with compelling qualitative stories and illustrations. Moral appeals may be particularly effective in organisations that give their decision-makers greater latitude to exercise discretion in enacting the organisation’s mission.
In such organisations, ‘hearts and minds’ language can be more effective in gaining organisational commitment to social issues than data.
Flexibility isn’t the only answer
HR researchers and professionals know that a systemic problem like gender equality needs system-wide solutions, and we frequently recommend flexibility as that solution.
There is widespread agreement across academics, managers and policymakers that flexible work practices should be the key to increasing women’s engagement in leadership roles and progressing organisations towards greater gender equality.
Unfortunately, there is very little evidence that flexible work practices are the key to increasing women’s representation in leadership roles. Some research finds a positive association between the number of flexible work practices offered by firms and the percentage of senior management positions held by women in those firms; some research finds a negative association.
One thing we know for sure: if flexible work does progress gender equality, it will be a slow journey.
My team’s research shows that the flexibility practices adopted by Australian organisations in 2002-06 boosted women’s representation in management roles; but even big organisational investments only increased women’s representation by about three per cent, and only after 8-12 years.
Women are most likely to access flexible work in the early stages of their careers, and a decade may pass before they are considered for senior leadership roles. The gap may be even longer if employers support extended career breaks to accommodate family responsibilities.
Flexible work has huge potential to support employee wellbeing if employers carefully design and implement flexible work policies. But flexible work has a dark side. In many organisations, employees who access flexible work options can experience stigma that negatively affects their career opportunities.
“When we focus too heavily on financial outcomes, we risk raising managers’ expectations to unrealistic levels and losing their confidence in research-based recommendations.”
We need to be honest with ourselves – and with stakeholders – that an employer’s adoption of flexible work practices may not immediately move it closer to gender equality. In many organisations and industries, women are not yet fully integrated into power networks, so they need to invest more effort than men into accessing information, finding resources and building an influence base.
Their ‘weak-tie’ professional relationships need constant, deliberate nurturing, so women working remotely or working fewer hours risk being out of sight and out of mind.
Further, if more women than men opt to work from home, we may see a widening of the gender pay gap.
When a flexible work policy is introduced without thorough consideration of the organisation’s culture and performance management practices, it can reinforce systemic gender biases rather than dismantle them.
Big and small solutions
So what should we focus on? Gender inequality is a big, complex problem and it will only be addressed by big solutions that encompass an organisation’s entire structure and culture.
But while we are developing large-scale solutions that address systemic inequality over the long-term, we need to keep identifying small-scale solutions that align with specific well-defined inequality indicators. We need to give HR managers, diversity and inclusion champions, policymakers and other gender equality advocates access to the small first steps that can increase the number of women appointed to key organisational roles.
Increasing the visibility of women serving on (or better still, chairing) selection panels attracts more female applicants to advertised roles. Including a minimum of two women on every shortlist lowers the red flags usually attached to solo female candidates, making it more likely that a woman will be hired.
Other research shows that reducing the number of scale points in evaluation criteria minimises gender-stereotype effects that inflate ratings of male candidates to create gendered evaluation gaps.
These changes to recruitment and selection processes will not eliminate gender inequality in its entirety, but they can increase gender diversity in key roles as a necessary step towards making organisations more inclusive. And when the next IWD rolls around, that will be something worth celebrating.
Carol T Kulik is a Bradley Distinguished Professor at the University of South Australia, UniSA Business, Centre for Workplace Excellence. This article also appeared in the March 2022 edition of HRM magazine and is an edited version of a paper first published in the Asia Pacific Journal of Human Resources, 2022, 60(1) 97-115. You can read the full paper here.