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Women at work: facing the challenges today

Date: 24 Apr 2014

Citywealth

Dr Alexandra Beauregard, professor in employment relations at the London School of Economics shared her thoughts for gender programmes on the day and relayed these notes afterwards.

Why do gender diversity programmes exist?

Using the financial services sector as an example it looks very gender balanced on the surface. According to the latest government figures, women make up 51% of workers in banking, insurance, and pension provision but we don’t find that they’re evenly distributed throughout the hierarchy of the companies they work for. The Equality and Human Rights Commission conducted an inquiry into sex discrimination and unequal pay in this sector (in 2009). They found that women in the finance sector, working full-time, earned an annual gross salary that was ‚Äì on average ‚Äì 41% lower than their male colleagues. And that’s the average. In some cases this ranged up to 55% lower. This compares to the economy-wide gender pay gap of 10% for full-time workers. So we can see that we don’t have gender equality in terms of rank, or pay, in financial services.

In many if not most sectors, women continue to face barriers to career advancement, including sex discrimination, gender stereotyping, male-dominated organizational cultures, and corporate practices that continue to favour men. Because of these issues, many companies are seeing their pipelines leak at middle management or senior levels. Their female talent is poached by more attractive competitors, or women quit the game entirely to start up their own businesses. To retain their female employees and improve their career advancement prospects, organizations are increasingly putting gender diversity initiatives in place. Some of these initiatives include formal mentoring programs, alternative career paths, and alternative and flexible work options. Women’s networks have also emerged as a way to help women move into senior leadership roles.

So, what programmes are effective? The 360 on networking

In hundreds of studies, women consistently report that a key barrier to their career advancement is being excluded from organizational networks, which tend to be dominated by men. Women’s networks are seen as a way to compensate for this exclusion, a way in which women can share information and learning experiences with other women. For both men and women, networking helps people understand the political and cultural aspects of an organization. Networks are also a source of social capital and power and because of this, networking has an impact on career success ‚Äì research tells us that it’s associated with higher levels of pay, more promotions, and greater career satisfaction.

But we need to ask the question: Do the careers of men and women benefit equally from networking? The short answer is, no. Studies have found that there are basic differences in the structures of men’s and women’s networks, which influence their effectiveness. Women tend to establish networks that are smaller, where they have stronger relationships to their contacts, and where there is a higher degree of similarity among members compared to men’s networks. These social networks are less influential and less well-developed, and they are associated with fewer

career opportunities within their firm and in the external labour market. In contrast, men’s networks typically have weaker relationships with contacts, and a broad or more diverse range in membership. And, they also tend to provide more instrumental benefits, like upward mobility.

Women’s networks do have benefits, though ‚Äì for participants and their employers.

In a study of female mayors, researchers found that 58% of these women reported positive outcomes from membership in a women’s network. This included support, learning, advice, fostering a collective identity, and fewer feelings of isolation. Organizations can also benefit from networks, through the retention of qualified women, an enhanced corporate reputation, a better-equipped workforce, and organizational learning. Catalyst research reports show that women’s networks are associated with benefits for employers like positive changes in culture, and an increased talent pool for succession planning.

On the other hand, there can also be drawbacks to women’s networks: Women sometimes express concern about whether or not the women’s network has enough power to make any real changes to the system. There have been arguments that it might be more effective to work toward including women in the mainstream, male-dominated organizational network, rather than creating a separate network just for women. In some situations, women’s networks may also create a backlash from majority group members who are excluded from the networks’ activities and potential benefits.

There was a recent in-depth study of the women’s network in a large multinational firm, and it showed some interesting results. The researchers conducted interviews with members of the women’s network, and also with members of the company’s executive leadership team.

There were a lot of differences in the perceptions of network members and the firm’s executive team about the purpose of the women’s network and in terms of what they expected the outcomes of the network to be. Also the changes in the organization that would result. Members of the women’s network thought the objectives of the network were both individual development and organizational development. They believed that the women’s network could enhance career paths for women, increase the number of women in leadership roles, and provide more opportunities for networking and skill development.

At the same time, the women saw the network’s potential for having a positive impact on the organization as a whole. They spoke of the women’s network as a vehicle to strategically develop and expand the company’s business, as well as be a source of innovation.

They viewed the network as a way to enable women to become strategic partners in the organization.

In contrast, the executives framed the women’s network in terms of it being a way to demonstrate that the firm values diversity. They placed a lot of emphasis on the network as a gender diversity initiative, rather than a way for women to more fully engage as equal and influential strategic partners. There were also different perceptions between the women’s network members and the executives regarding what the company’s senior leadership would do differently as a result of the network. Network members expected that senior leadership would be more aware of the barriers to women’s advancement, and be more open to learning and changing due to the women’s network. In contrast, the executive team focused on different priorities. They said they (and other senior

leaders) would actively support the women’s network by providing resources and time, and by sponsoring activities. And they would speak more openly about issues regarding the advancement of women into leadership roles. The executives did not discuss specific plans or actions they would take, either individually or as a group of senior leaders, to actively assist women in their career development and advancement in the firm.

When they were asked to identify the factors that helped or hindered career advancement for women in the organization, both the network members and the executives focused on individual actions, behaviours and characteristics of women, rather than on structural supports and constraints. Both groups seemed to believe that if women did more, if they were more visible and achieved more, then there would automatically be more women in positions of leadership. This was intriguing, because both the executives and the network members acknowledged that the company had a male-dominated culture. The strategies they all suggested for advancing women’s careers were based on changing individual behaviours, like being more assertive and confident. Most of the executives and the members of the women’s network saw women’s overall lack of advancement as a matter of individual choice, not as an outcome of how the organization was constructed. These leaders clearly didn’t hold themselves accountable for the lack of women in senior management. They felt no need to actively assist women in their attempts at career development and advancement.

But gender diversity efforts require changes at multiple levels within the organization.

Failing to recognize how systemic structural and cultural issues may be impeding women’s career advancement is a problem, because it limits the response sets of both women and the firm’s leadership. In many organizations, leadership focuses on ‚Äúfixing the women‚Äù rather than considering the possibility that organizational structures may also need to be changed.

Mentoring or sponsoring

A Catalyst survey of more than 4,000 men and women, working full time, who graduated from top MBA programmes all over the world, shows that the women are paid $4,600 less in their first jobs after graduating, they occupy lower-level management positions and they have significantly less career satisfaction than their male counterparts with the same education. That is still the case when we take into account factors such as their industry, their prior work experience, their career ambitions and whether or not they have children.

Among this group, more women than men report having mentors. If the women are being mentored so thoroughly, then why aren’t they moving up into higher management positions? One factor is that women’s mentors have less power in the organization and this is true even after controlling for the fact that women start in lower-level positions post-MBA. That’s a real disadvantage, because the more senior the mentor, the faster the mentee’s career advancement. Among those 4,000 MBA graduates, the men received 15% more promotions over a two-year period than the women. They had the same number of lateral moves, which were designed to give them exposure to various parts of the business but men were receiving promotions after the lateral moves; the women were being offered these moves instead of advancement.

So women might be getting more mentoring but these mentoring relationships aren’t leading to nearly as many promotions for them. What’s happening here is that women are being mentored, but men are being sponsored. There’s a distinction between mentoring and sponsoring. Mentors offer support and guidance for personal and professional development, and career help that includes advice and coaching. Sponsors actively advocate for advancement. There are hundreds of studies that show that people get more satisfaction from mentoring, but they need sponsorship to advance.

The women in this research explained how mentoring relationships helped them understand themselves, their preferred styles of leadership and the ways they might need to change as they move up the leadership pipeline. Meanwhile the men were telling stories about how their bosses and their informal mentors had helped them plan their moves; take charge in new roles, and had endorsed them publicly. Without sponsorship, women are likely to be overlooked for promotion, regardless of how competent they are and how well they perform.

It can be hard to do a good job of both mentoring and sponsoring in the same programme.

The best mentors are the ones who care, and put lots of effort into advice and counselling

These are often not the high-flyers who have the influence to pull people up through the system. So a number of firms have introduced sponsorship programmes to improve the promotion rates of high-potential women. At Deutsche Bank, their internal research showed that female managing directors who left the firm to work for competitors were not doing so to improve their work-life balance. They were leaving because they’d been offered bigger and better jobs, the kind they weren’t being considered for internally. So Deutsche Bank created a sponsorship programme aimed at assigning more women to critical posts. It paired mentees with executive committee members to increase the female talent pool’s exposure to the committee and to ensure that the women had influential advocates for promotion. Research shows that one-third of the participants in the programme are in larger roles now than they were a year ago.

At Unilever, they’ve got a sponsorship programme that has the explicit objective of promoting more high-potential women to the firm’s most senior levels. The sponsors are all members of Unilever’s senior ranks. The two key criteria for selecting the sponsors are, first of all, experience in areas where the high potentials have developmental gaps and secondly, presence at the table when the appointment decisions get made. Unilever is a global company with a matrix structure, so many of the women do not live and work in the same location as their sponsors. So many of them don’t spend much face to face time together ‚Äì but they do have advocates at promotion time.

What research tells us is that sponsorship works best when sponsors are held accountable.

IBM Europe has a sponsorship programme designed for senior women below the executive level. It aims to promote selected participants within one year. The sponsors are all vice-presidents or general managers, and they are charged with making sure that the participants are definitely ready within that year. So they work hard to raise the women’s profiles, they talk up the candidates to decision makers, and they find the women internal projects that fill in their skills gaps and make them promotable. If the women don’t get promoted, that is viewed as a failure of the sponsor, not of the woman. So the lesson here is that mentoring programmes can be effective at increasing

women’s career advancement but they work best when they incorporate sponsorship activities and when there’s accountability for results.

A study on gender and diversity initiatives

The last bit of research I want to mention is a major study of gender diversity initiatives and their effectiveness, among 708 private sector organizations (between 1971 and 2002). The researchers found that companies had three broad approaches to promoting gender diversity.

Firstly, there were programmes to establish organizational responsibility for diversity. So, there were responsibility plans; in some cases, in the American firms, there were affirmative action plans. There were diversity managers or a diversity department that had oversight of these plans with diversity committees and task forces that served as advocates for gender diversity and that monitored progress toward diversity goals.

The second approach involved programmes to reduce managers’ unconscious bias, through training and feedback. The feedback was given in performance evaluations, where managers were assessed on their diversity performance.

Finally, the third approach had programmes to reduce the social isolation of women: These were networking programmes, and mentoring programmes.

By looking at the representation of women in senior management positions, the researchers could evaluate which of these approaches was most effective. A higher share of women at senior management level would mean that the gender diversity programmes had worked. What they found was that diversity training and performance evaluations were the least effective. So targeting managers’ unconscious bias wasn’t really working to get women moving up the ladder. Mentoring and women’s networks had positive effects, but they weren’t large effects.

What really seemed to produce more gender diversity at the senior management level were programmes that established the organisation’s responsibility for diversity.

So, clear targets for gender diversity. In some cases, affirmative action plans ‚Äì what we would call ‚Äúpositive discrimination‚Äù and having dedicated diversity staff or having diversity task forces and diversity committees. The organizations who established this responsibility, this accountability for results were also getting better outcomes from their other initiatives like diversity training, and performance evaluations and women’s networks and mentoring programs.

In conclusion: Do gender diversity initiatives really work?

It depends on what you want them to do. If you want women to feel less isolated, to be more satisfied, and to feel more supported, then yes, they do work. If you want to get more women up the ranks into senior leadership positions then you need to take the extra step.

The company needs to want change. It needs to be willing to make changes and it needs to be accountable for the outcomes. This isn’t an issue that can be solved by more individual women being more individually confident and working on an individual basis to put themselves in line for promotion. There needs to be partnership and there needs to be accountability.

Main sources

Ibarra, H., Carter, N., & Silva, C. (2010). Why men still get more promotions than women. Harvard Business Review, 88(9), 80-85. Available at http://www.ohsu.edu/xd/education/schools/school-of-medicine/departments/…

Kalev, A., Dobbin, F., & Kelly, E. (2006). Best practices or best guesses? Assessing the efficacy of corporate affirmative action and diversity policies. American Sociological Review, 71(4), 589-617. Available at https://campus.fsu.edu/bbcswebdav/institution/academic/social_sciences/s…(Gender,%20Race,%20and%20Class)%20Copies%20of%20Articles%20from%202009/Kalev-ASR-2006.pdf

O’Neil, D. A., Hopkins, M. M., & Sullivan, S. E. (2011). Do women’s networks help advance women’s careers?: differences in perceptions of female workers and top leadership. Career Development International, 16(7), 733-754.

Below is the link to the reports generated by the EHRC inquiry into sex discrimination in the financial services sector: http://www.equalityhumanrights.com/legal-and-policy/inquiries-and-assess…

Dr Alexandra Beauregard, professor in employment relations at the London School of Economics

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