Soccer team in a huddle

Why We Aren’t Seeing Change in Workforce Diversity Numbers (and What We Can Do About It)

Feature Article | August 29, 2017 by Lyndal Hagar, Gabby Burlacu

If your company had an issue with attracting, retaining, and developing a key source of talent, how confident are you that you could identify and address it?

In a world of increasing skills shortages and shifting organizational demands, it is critical that companies harness all of the talent they have and need. But we also know that historically, organizations have had challenges in simply attracting diverse talent in particular—a varied group whose representation in the global labor force is growing by the day—let alone harnessing it to its full potential.

In the case of gender diversity, the business case has been convincingly demonstrated in the research. Gender diverse companies are 15% more likely to outperform their non-diverse competitors, and gender diverse leadership teams drive better financial outcomes for their organizations. In an effort to achieve these benefits, organizational spending and efforts to promote diversity awareness have gone up considerably in the last several years. But are companies actually getting better at addressing inequities between demographic groups? And further, are we seeing increased gender diversity reflected in the managerial roles that lead these groups? This article looks into some of the latest benchmark results around gender diversity in organizations, and the new technology available from SAP SuccessFactors aimed at driving change by addressing the bias that continues to hold us back.

The SAP SuccessFactors Workforce Analytics solution provides benchmarking out of the box, across hundreds of metrics, allowing companies to easily compare their own workforce to those in a variety of industries, locations, company sizes, revenue, and income groups across the globe. We leveraged this long-standing functionality to determine whether the gender composition of the workforce has changed meaningfully over the past three years, in line with the increased attention the topic has received from business leaders.

Our data shows that female representation in organizations across the globe has remained steady– and rather unequal. Nearly 75% of companies employ a greater number of males than females, with the 10% of companies that are the least gender diverse employing four to five men for every woman. While compelling, this inequity does not fully explain the inequity we see in management: well over 75% of companies in our sample employ more male managers than females, and the 10% least diverse companies have six male managers for every female one (a number that is trending upward, not down). Simply put, despite the increased profile of the topic in recent years, the least diverse companies are just getting less diverse, especially when it comes to their leadership teams.

Click to enlarge.
Chart reading tip: A Male to Female ratio of 1 means that for every 1 male employee there is also 1 female employee. A ratio of 2 means that there are two males for every female. The Median benchmark line indicates the middle point, which means that 50% of organizations fall above and below that result. The space between the Median and the 75th percentile indicates that 25% of organizations fall between those two numbers, and so on.

A comparison of the insurance and manufacturing industries in 2016 provides an interesting illustration of this. When looking at the entire workforce, insurance is a female-dominated industry, with roughly 90% of organizations employing more women than men. When it comes to management ranks, this industry starts to look more male dominated, with over 50% of organizations employing more male managers than female ones. Manufacturing, on the other hand, is generally more male—90% of organizations in this industry employ more men than women. In the management ranks, the ratio of men to women in manufacturing is at best still 2 to 1, and at worst nine male managers for every female (a ratio so high that we needed to increase the scale in the charts from the ones above showcasing trends across all industries together).

Click to enlarge. See chart reading tip above.

So, what does this tell us about the effectiveness with which organizations are addressing gender diversity?

Management teams still do not resemble the workforces they lead: Both the overall and industry-specific data show us that management positions still tend to be filled by men. This is the case even in industries like Insurance, where the broader workforce is more female. Management teams that do not resemble the people they lead indicate that companies continue to have issues in providing the right experiences, opportunities, and support in a way that enables all talent to become leaders.

Companies that are not diverse and just getting less diverse: Especially in the management ranks, companies that are non-gender diverse are not trending toward resolving this situation. In the Manufacturing industry we see some organizations that have nine times as many men in management as women; and although this was not shown in our chart, this is a considerable increase from the SuccessFactors benchmarks in 2015 indicating a ratio closer to 6 to 1. In general, we see gender-unbalanced companies that have even less balance in their leadership teams, and even less balance over time. And the limited opportunities, support, and visibility we provide to women is likely to continue exacerbating the issue of female representation in these fields.

Awareness and education are not driving change: Perhaps the most important thing we see in this data is that all of the awareness, business case research, and education of recent years has done little to truly change the composition of our workforces. Nearly all Fortune 500 organizations offer some sort of diversity training. Many of them have formal female leadership development programs. Yet we are hiring, developing, and promoting the same talent—a problem which does not seem to be going away but actually worsening with time.

How can companies move past training and education and drive real change in this important area?

Build a more gender-balanced workforce: Equitable representation of men and women in the workforce is not the only step toward creating diverse management teams, but it is an important first one. If we don’t have women to develop and promote, we certainly won’t have female managers. The problem is, organizational practices often impede the chances that women will be attracted and hired—often without business leaders realizing this is the case. Deterrents can come in many forms, such as required work hours, location, and job structure, but perhaps what is lesser known is that it can also result from the way a job is described. Using the new Job Analyzer from SAP SuccessFactors, companies can now ensure their job descriptions are gender neutral and free of terms and phrases that have been shown to deter both men and women from applying for roles. Built on machine learning, this new functionality is currently under beta testing with a number of SAP SuccessFactors customers from a variety of industries, including Tech, Media, Insurance and Manufacturing.

Remove bias-based barriers to advancement: Our benchmarks from the Insurance industry illustrate that simply having women in the workforce is not enough. Organizations need to ensure that all the practices leading up to promotion, from performance evaluation to career development, are free of bias as well, enabling all the most qualified people to gain access to management and leadership positions. In addition to the Job Analyzer customers will find Business Beyond Bias capabilities across our full HCM suite enabling them to ensure that once they’ve hired the talent they need, the opportunities and development they are providing are fair, equitable, and conducive to creating diverse, impactful leadership teams.

In order to have real impact, we need to put tools and technology into the hands of decision makers, enabling them to attract, engage, and retain the key talent they most need in a changing labor pool. Organizations are not moving beyond bias on their own. But with the right tools, they can ensure that the decisions being made around talent are free of bias and supporting their organization’s success.

Join us in our Thursday breakout session at SuccessConnect in Las Vegas, “Are you ready to make diversity & inclusion (D&I) part of your HCM strategy?” to learn more about the Job Analyzer, and how SAP SuccessFactors technology can help move your business beyond bias.

Tags: , , , ,

Leave a Reply