Published in September 2019
BEYOND THE GLASS CEILING: WHY BUSINESSES NEED WOMEN AT THE TOP
Women are better educated and more active in the labour force than ever, and are increasingly working in managerial roles. Yet despite these gains, their representation in top positions in business still lags behind that of men.
Explore this InfoStory to find out why gender balance at all levels of business is better for companies and economies as a whole.
Where women stand
Globally, approximately 50% of working age women are part of the labour force, in comparison to 75% of men. However, these numbers alone do not give us the whole story.
Women are also outstripping men in third-level education. Africa is now the only region in the world where women are earning fewer third-level qualifications than men, and only by a small margin.
Cracking the glass ceiling
Since 1991, women have been filling managerial positions faster than men, particularly in high-income countries, although the data show us that women still have a long way to go before they equal the number of men in these roles.
We also have yet to achieve anything close to gender balance in the highest echelons of the business world, in executive roles and in boardrooms. In addition, the bigger the company, the less likely we are to see women at the helm.
Beyond the glass ceiling
Almost 75% of enterprises worldwide have equal opportunity or diversity and inclusion policies in place. But our research indicates that these policies alone are not enough to fix the gender imbalance at the top levels of business. This is because the traditional glass ceiling is not the only obstacle women face as they climb the career ladder.
In both high- and low- income countries, women still perform the majority of domestic labour and care work at home, even when they are also employed in full-time paid work.
Many businesses run on a culture of constant availability, where employees are expected to work overtime, take calls out of hours, and answer emails on days off as a matter of course. This makes it very difficult for women to effectively compete with male colleagues and rise through the ranks, as they continue to juggle family responsibilities with career priorities.
The glass wall
The glass wall refers to the phenomenon of occupational segregation where female managers tend to be concentrated in business support functions, such as HR, finance and administration. In such roles, women have limited decision-making power or strategic input, and therefore limited opportunities to rise in the company.
By contrast, male managers are over-represented in research and development, profit and loss, and operations. These areas are typically viewed as more “strategic” and usually lead to decision-making roles at higher levels.
The leaky pipeline
The proportion of women tends to decline as the level of management increases, meaning that men continue to dominate chief executive positions and boards. When women are not present in the highest positions in business, they lack the influence to alter the workplace culture and so the vicious cycle of male dominance continues.
As long as women are under-represented in decision-making roles, the pipeline will continue to leak. Companies with female CEOs are more likely to have women in strategic management roles.
A persistent gap
The gender pay gap does not disappear when women move into managerial roles. In fact, of the 93 countries for which data are available, the gender pay gap is higher for managers than for total employees in 43 countries.
The gender pay gap remains a persistent indicator of inequality between men and women in the world of work.
The benefits of gender balance
The business case for gender-balanced workplaces is growing stronger all the time. Two-thirds of companies surveyed by the ILO agreed that diversity initiatives improved their business outcomes.
When enterprises have an inclusive business culture and inclusive policies, the predicted probability of achieving:
- increased profitability and productivity is 63%
- enhanced ability to attract and retain talent is 60%
- greater creativity innovation and openness is 59%
- enhanced company reputation is 58%
- better ability to gauge consumer interest and demand is 38%
When boards are gender-balanced, companies are almost 20% more likely to have enhanced business outcomes.
Source: ILO enterprise survey, 2018.
The bottom line
Most business will go to great lengths to achieve a 2 or 3% improvement in their profit margins. Among companies surveyed by the ILO that track the impact of gender diversity in management, over two thirds of companies report 5 to 20% profit increases.
In business, you can’t ignore the bottom line. And in today’s uncertain economic climate, gender diversity in management is necessary for competitive business performance.
Repairing the pipeline
Promote work–life balance
In the digital era, companies need to be more proactive than ever about dismantling the culture of constant availability.
Policies such as flexi-time, teleworking, maternity and paternity leave and return-to-work programmes ensure that women are not disadvantaged at work for having responsibilities at home. In fact, these policies benefit all workers, can help reduce stress and burnout, and can lead to more sustainable productivity in the long-term.
Ensure policy buy-in
Policies can’t fix everything, but they are an excellent place to start redressing gender imbalance.
Our research shows that companies with active equal opportunity and gender inclusive policies have more women in all levels of management. But without buy-in from managers, policies gather dust in drawers. Training for managers is crucial to ensuring that policies become workplace realities.
Exploit the pull factor
Women at the top attract more women at all levels of business. Our research found that enterprises with a woman CEO are over 12% more likely to have women as senior general managers, indicating a pull factor.
Enterprises with a woman as the board chair are also more likely to achieve gender balance across all management levels and departments. This pull factor is key to repairing the leaky pipeline.
Challenge bias in society
Over 75% of survey respondents agreed that their company culture mirrors the attitudes and traditions of their society.
Businesses can’t single-handedly dismantle society-wide gender bias, but they can challenge it by recognizing that it exists, observing how it manifests and countering it within their workplace culture. Mentoring programmes, awareness campaigns and transparency policies are all effective tools for tackling wider gender bias.
In a rapidly changing world of work, with skill shortages forecast for the coming decades, businesses overlook women’s leadership potential at their own peril.
The data make it clear that gender balance – especially at decision-making levels – not only makes good business sense, but also paves the way for more diverse and more productive enterprises that benefit workers, employers and societies as a whole.
Delve deeper into the data and learn about our methodology.