Sunday Strategist: How to Promote More Women

(Bloomberg Businessweek) -- If you’re an American corporation—or a woman who works at one—I have good news for you. OK, also some bad news.

The good news is that all those diversity targets and unconscious bias training seminars are slowly paying off. According to McKinsey and Lean In’s annual Women in the Workplace report, 44% of companies now have three or more women in their C-suite, up from just 29% in 2015. Women still account for only a fifth of top executives and 30% of senior vice presidents, but they’re being promoted at a faster rate than men, which is narrowing the gap.  

Now for the bad news: At the vice president level and below, female employees are still treading water in their careers. Women hold nearly half of all entry-level positions at the 590 companies surveyed, but only 38% of positions just one step up. For some reason, they’re just not being promoted. For every 100 men offered their first career promotion, only 72 women move up. Black and Latina women have it particularly hard; they’re promoted at just 58% and 68% the rate of men, respectively.

Interestingly, women and men seem to disagree on whether this stagnation is even a problem. When one in three managers at a company is a woman, slightly more than half of women but 62% of men say women are well represented. When 10% of a company’s senior executives are women, 44% of men but only 22% of women say that’s enough. In other words, women want gender parity, and men are satisfied with gender representation.

They also disagree on why women haven’t achieved that parity. Men tend to attribute women’s stalled careers to what’s often called “the pipeline problem,” or the notion that there just aren’t enough women qualified for a job. Women’s primary explanation for the lack of female leadership is that they feel judged by different standards. They also say they aren’t mentored as often.

Women’s underrepresentation and underpromotion is a problem for companies, too. According to different McKinsey research, companies with racially, ethnically and gender-diverse workforces are 15% to 35% more likely to perform better financially than their competitors. Companies with homogenous workforces actually lag behind their peers. This might be explained by a 2013 Harvard Business Review article, which found that by mistaking confidence for competence, companies were overwhelming promoting mediocre and incompetent men. 

So, how do we fix this? The first step is pretty easy. Whatever metrics a company has in place for senior employees should be extended to workers at lower levels, too. Step two is a little harder. McKinsey/Lean In say companies should establish clear metrics for employee reviews, rather than allow managers to write open-ended assessments based on their feelings, to ensure women and men are judged fairly.

The third step is the hardest, and likely the most expensive. One of the largest hurdles both companies and individual people face in closing the pay gap is that they don’t actually know if they have a gap, who it affects, or how big it is. It’s costly and time consuming to analyze salary data, which is why few companies voluntarily do it. But just because it’s hard doesn’t mean it isn’t necessary. 

When you analyze pay data you’re able to put a number on women’s inequality. For the past two years Britain has made companies with more than 250 employees publicly report their aggregate gender pay figures. Because of that law, we now know that 80% of businesses in the U.K. pay men more than women, largely because women aren’t being promoted into higher positions. The U.S. doesn’t require such reporting, although for the first time this year companies with more than 100 employees will have to provide their pay data, broken down by race and gender, to the Equal Employment Opportunity Commission. Unlike the U.K. data, it will be kept secret. (Although Intel announced that it would publicly release its report. Hopefully other companies will follow suit.) 

Is all this enough? Of course not. The professional obstacles women face are plentiful and complex. Many of them are built into the U.S. economy and aren’t fixable by any one company or institution. More than half of HR leaders believe their company will reach gender parity in the next ten years. But women are progressing so slowly that in most cases it’s going to take several decades, if it happens at all.

Businessweek and Beyond

• Sure, hold the G-7 summit at your own golf course. Who could object?
• Juul is out of the flavored e-cigarette business in the U.S.
• Gig economy startups are learning the hard way that profits matter
• Even without the citizenship question, the U.S. Census has a Latino problem
• Can Peloton turn a profit? Probably not until 2023

To contact the editor responsible for this story: Silvia Killingsworth at skillingswo2@bloomberg.net

©2019 Bloomberg L.P.