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In Practice Davos

Facing the Gender Gap Today for Tomorrow’s Business Success

Senior Partner and Global Leader, Multi-National Client Group for Mercer Partner and Innovation Leader, Workforce & Analytics Practice for Mercer

Tomorrow’s workforce is taking shape today, yet despite years of progressive policies, current female hiring, promotion, and retention rates are insufficient to dramatically improve gender representation over the next decade. But with enough foresight, proactive leadership can blunt the risk of an inadequately diverse global workforce.

The World Bank recently reported that globally, during the last 20 years, the participation rate of female workers ages 15-to-64 has declined. And The Human Capital Report, released by the World Economic Forum in partnership with Mercer in 2013, found that while 60 to 70 percent of the eligible female population participates in the global workforce, male participation is well above 80 percent. This pattern holds across age categories and across countries.

And although more women are moving into senior roles globally, equal representation is still far from becoming a reality. Unless organizations focus on promoting more women, progress—particularly in the U.S. and Canada—could stagnate. Those forecasts reflect recent Mercer data on workforce representation and “internal labor market” flows (e.g., hires, promotions, and terminations) submitted by 164 companies in 28 countries covering 1.7 million employees—including more than 680,000 women.

The resulting report, “When Women Thrive, Businesses Thrive,” challenges today’s corporate leadership with finding fresh solutions beyond the traditional “progressive” leave and flexibility programs that have failed to get results in the past.

The Workforce Needs Gender-Oriented Innovation

These programs are associated with unintended consequences—especially in the absence of leadership engagement and manager training on inclusion. Companies need to avoid unconscious bias and provide effective career coaching to employees that may take up such progressive programs.

The research calls for dynamic approaches that move beyond flex time and family leave. Executives need to champion innovative programs that target women’s unique health and financial needs. For example, gender-customized retirement solutions geared toward women’s savings behaviors—especially given differences between women and men in longevity, can create a differentiating value proposition.

Educational programs geared to promote women’s unique health needs are also part of the solution. As are strong programs to promote gender pay equity. This needs to be done using a disciplined, statistical review of an organization’s own employment data, which might show, for example, the value of exposure to supervisory and/or critical roles, the importance of internal mobility, or a need to eliminate bias in performance review processes.

If anything, the research suggests that a siloed approach to gender diversity is counter-productive. Organizations that focus on holistic approaches to support female talent have more comparable talent flows for women and men than those that do not.

Executives need to admit there is a problem and embrace the opportunity. Organizations should then base their gender diversity strategies on rigorous workforce analytics, identifying the drivers of and barriers to gender equality. From there, diversity strategy should be aligned with talent strategy, so that gender diversity programs don’t run counter to how talent is managed, including whether the firm tends to “build” or “buy” talent.

Importantly, gender diversity programs should be implemented in a workplace that encourages women to utilize available programs and benefits in the context of their overall career development.

Collaboration will also have a positive impact on the female talent pipeline. Leaders can position their organizations for success through alliances with other key stakeholders to influence the supply of female talent, including schools, governments, public health organizations, industry groups, and non-governmental organizations.

To ensure long-lasting global business success, organizations need a mix of different skills—a gender-diverse workforce is a vital key to that success. Today’s executives should note that optimal gender diversity takes more than having a standard diversity policy and traditional programs.

Patricia A. Milligan

Senior Partner and Global Leader, Multi-National Client Group for Mercer

Pat Milligan is senior partner and global leader, Multi-National Client Group for Mercer.  She also currently serves on the World Economic Forum Global Agenda Council.

Brian Levine

Partner and Innovation Leader, Workforce & Analytics Practice for Mercer

Brian Levine is a partner and innovation leader for Mercer’s Workforce Strategy & Analytics practice. Brian helps organizations assess their internal labor markets, the processes by which employees are rewarded and move through organizations.