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Women in business: slow progress towards equality

Posted on: 30th November 2017

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Gender analysis: from predictions of centuries of inequality to smart workplace choices in Iceland

<p style="text-align: justify;">Gender analysis: from predictions of centuries of inequality to smart workplace choices in Iceland</p>

Women in business: slow progress towards equalityWomen in business: slow progress towards equality

Gender analysis: from predictions of centuries of inequality to smart workplace choices in Iceland

The 2017 edition of the World Economic Forum’s (WEF) Global Gender Gap Report has calculated that women may have to wait a staggering 217 years for pay parity. This was bad enough. But worse still, it was 47 years more than in 2016.

In search of better news, we sought out examples of progress in gender equality. Iceland has been sitting at the top of the WEF’s ranking for the last six years, and The Guardian and The Economist declared it the best place to be a working woman today. So what is Iceland doing differently?

Challenging stereotypes through education

The root causes of a lack of equality in the workplace are complex. For instance, stereotypes of which roles should be undertaken by who have been stubborn to shake, starting from a child’s upbringing and first years in education.

Explanations for the gender pay gap also extend to women choosing lower-paid professions, part-time work paying less, and the fact that women are less likely to ask for sufficient pay compensation. Notably, many schools in Iceland take a targeted approach to empowering girls, teaching a range of subjects as well as courage, strength and how to use their voice.

 

Levelling the playing field through paternity rights

Studies show that unconscious bias in hiring practices or lack of support for working parents can also provide a disproportionate barrier to women accessing the most lucrative career paths. For example, The Economist’s ‘glass-ceiling’ index now incorporates paternity rights as an indicator. This is based on evidence that fathers taking parental leave can allow mothers to return to work, ultimately resulting in a closing of the earnings gap. In Iceland, men get the equivalent of 8.3 weeks' paid paternity leave.

Although some industries have adapted to embrace change and harness the proven benefits of equality, the final hurdle remains a shake-up of the jobs right at the top. In many cases, women are still being sidelined, denying them any real decision-making power, and with it, access to the highest salaries and greatest career progression opportunities.

 

Creating a virtuous cycle

Crucially, WEF’s research suggests that better representation of women in higher management can lead to a virtuous cycle. Studying data sourced from LinkedIn, they found that when women are better represented in leadership roles, more women are hired across the board. This finding that holds true even when considering disparities in the size of female talent pools in different industries. Additionally, their research indicates that female CEOs actually pay their high-earning women more than male CEOs do, creating a financial incentive for women to join such companies.

Research from Catalyst has found that three women or more are needed to create a ‘critical mass’ which can change boardroom dynamics substantially and enhance the likelihood that “women’s voices and ideas are heard”. Boardroom equality is certainly increasing, and there are several high-profile women across the business landscape: Sheryl Sandberg, COO and Board Member at Facebook, Indra Nooyi, CEO and Chair of PepsiCo, Irene Dorner and Jayne-Anne Gadhia at Virgin Money (the first all-female leadership team in a FTSE 350 company), to name but a few. 

But a Credit Suisse report shows that women remain underrepresented globally: in 2015, of 3,000 global companies, women held 14.7 per cent of board seats. In Iceland, women have 44 per cent of seats on listed-company boards, in part due to gender quotas set out in legislation.

 

Fostering equal representation in power

Representation at a political level can also have a powerful effect in providing role models and a more equal balance of power. The number of women as heads of state or government has fallen from 19 to 17 since 2015, and progress in the number of women in parliament continues to be slow, with 28 per cent of parliamentarians and just 21 per cent of ministers being female in 2017. Those at the helm impact the make-up of administrations: female political empowerment increased in Canada and France when Justin Trudeau and Emmanuel Macron appointed more women to ministerial positions within their governments, while the US has hit its lowest rate in 10 years, with only 27 per cent of all jobs within the Trump administration being taken by women. In Iceland, 41 per cent of MPs are female.

Social activism and awareness can also play a role. In 1975, the first universal women’s strike took place in Iceland, and despite the recorded levels of progress, women made headlines by going on strike again in October 2016 in protest against the 14 per cent gender pay gap that still exists. 

 

Understanding the economic benefits

There is also increasing evidence that, beyond a box-ticking exercise, greater diversity and inclusion in business can have concrete positive outcomes. The think-tank Centre for Talent Innovation found that the 48 per cent of companies in the US with more diversity at senior management level improved their market share the previous year. Only 33 per cent of companies with less diverse management reported similar growth. 

On a bigger scale, WEF’s report also estimates economic gender parity could add an additional US$250 billion to the UK’s GDP, US$1,750 billion in the US, US$2.5 trillion in China, and US$5.3 trillion globally by 2025. “We are moving from the era of capitalism into the era of talentism,” Klaus Schwab, Founder and Executive Chairman of WEF said. “Those will succeed best, who understand to integrate women as an important force into their talent pool.”

 

Proactivity not complacency

Taking Iceland by way of example, and the evidence put forward by the WEF, fostering female leadership across sectors is one of the key pathways to increasing gender equality in the global workforce, with widespread benefits for businesses, innovation and the global economy as well as social equality. Most importantly, it highlights that change does not come about organically. Proactive adjustments in both mindset and policy among businesses, politicians and individuals – male and female – are desperately needed to order to reignite progress.

As Saadia Zahidi, Head of Education, Gender and Work at WEF, said: “Gender equality is both a moral and economic imperative. Some countries understand this, and they are now seeing dividends from the proactive measures they have taken to address their gender gaps.” For now, perhaps it’s time to see what jobs are going in Iceland...

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