For an equal chance at top job, women have to wait till 2100
04/03/2019
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On the 1st of March, the Workplace Gender Equality Agency (WGAA) released its annual report on the status of women in the workplace, “Gender Equity Insights 2019 – Breaking Through the Glass Ceiling”, co-written with the Bankwest Curtin Economics Centre (BCEC). The report discusses the amount of time it would take for women to achieve equal representation given current conditions and factors that assist on the retention of females.

The report poses the question of ‘is gender equity enough or do we want gender equality?’, challenging the reader on what the desired goal is for every company. It discusses the case for gender diversity, that it leads to ‘better decision making, a reduced risk of fraudulent behaviour and increased social responsiveness’. Furthermore, the paper believes that regardless of the gender balance within a sector, the board must be gender diverse.

Growth in Management (or lack thereof)

According to the research, there has only been a 1.1% increase in the share of women CEOs in the past 5 years. Given current growth patterns, Australia is only expected to see equal representation of women in CEO roles in 2100. It would take a further 80 years for them to receive equal regard in the eyes of the board. This is not an encouraging forecast.

Taking a look at other roles, the study also expects to see equal representation of women and men for all managers in 2042 and for KMP and executives to be 2039 and 2047 respectively.

In addition, men are also being paid a significantly higher amount than women, at every management tier. The highest paid 10% of men take home $162,000 more each than the women. At lower management positions, men take home $31,000 more each. It is telling that the top 25% of women managers only make the median of a male manager.

Breakdown by Industry

It is an interesting trend that traditionally male dominated industries are progressing women into leadership roles quicker. Industries like mining, manufacturing, utilities, transport, postal and warehousing have seen similar representation of women in full-time management positions relative to the share in the workforce.

However, in the healthcare department, women are noticeably under-represented among top-tier managers. Although 71% of the workforce is female, women only make up 67.4% of the managerial workforce. This negativity may be offset by the fact that ‘growth among women in higher-tier management is faster than middle- and lower-management levels’.

The biggest under-representation of women in management positions come in the finance and insurance industries. Whilst women represent 48.1% of the workforce, the share of female managers only make up 37.7%. Although the share of top-tier and middle level managers have increased by over 4%, the share of female executives have barely budged in the past 5 years, from 24.6% to 25.3%. This is paralleled in the rental hiring and real estate industries.

Factors of Retention

The report conducted a regression into factors that affect a company’s ability to hire and retain women. ­­­Through the analysis, it is clear that setting an example at the top is paramount to closing the gap between men and women at lower levels. A female CEO increases the share of female full-time managers by 8.6%. Equal representation on company boards also leads to an increase by 7.3%. Meanwhile gender pay gaps at senior levels have also led to a disincentive for women to work at a company reducing the share of female full-time managers by 9.9%.

The regression also looks into the effect of paid parental leave (PPL) schemes. These are seen to have a significant impact on the retention of female managers. Those with employer-funded schemes that go beyond the government minimum of 12 weeks have been able to more successfully retain their employees, with only 5.6% leaving midway through their PPL while 10.7% of them leave when there is no support from the employer. If onsite childcare services are provided by the employer, it further increases the retention of female managers by 18.9%. Adopting supportive policies are clearly an effective method of retaining existing employees in the company.

However, it is disappointing to report 51% of companies still do not offer any form of funding, only a 2.1% decrease from last year.

Costs

The career breaks lead to expensive costs for everyone. Women are disadvantaged in the future of their career progression and lifetime earning ability. It is clear that the lack of support from employers is hurting them from multiple angles. The effect is two-fold, with the company also suffering from the departure of their female employees. It creates costs for replacing, and training new appointees. More importantly it leads to the loss of valuable experience and leadership.

This may raise some tough questions about your board and company. Has your board undertaken a gender pay audit and prepared an action plan to tackle the issues raised? If so, was it successful? Before looking outwards, we should look to challenge our own internal communities to ensure we reflect our beliefs.

The paper can be found HERE

© Guerdon Associates 2019
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