Look to the East for Gender Equality

When it comes to executive gender quality, the United States is falling behind. However, it needn’t be a permanent condition.

In June, women from 26 countries around the world traveled to Detroit to discuss how to increase female leadership at General Motors Co.’s inaugural Global Women’s Leadership Summit. The conference was designed to bring together GM women from around the globe to promote gender equality in management.

In addition to helping women hoping to climb the ranks, the summit also celebrated the women who have already found a place in the company’s upper stories. Speakers included Mary Barra, who took over the CEO position in January 2014 after three decades with the company, and Alicia Boler-Davis, the first African-American woman to become a plant manager at a GM vehicle manufacturing plant and currently the senior vice president of global customerexperience.

“We have a great opportunity with Mary Barra, our CEO, and all the great things she’s done throughout the entire organization, throughout her career,” said Ken Barrett, GM’s chief diversity officer.

Take Note, U.S.
Barra and Boler-Davis are 2 of 5 women serving in corporate officer positions at GM along with Grace Lieblein, Dhivya Suryadevara and Victoria McInnis — vice presidents of global quality, finance and tax and audit, respectively. But with 24 senior and executive positions, the company is still far from balanced at the top.

GM’s leadership makeup is about the norm for U.S.-based companies, which continue to lag behind the global average for gender balance at the executive level. Women hold just 21 percent of senior management roles in the U.S., according to the 2015 Grant Thornton International Business Report. Globally, this number is not much better: Women make up only 22 percent of senior management roles worldwide.

Dominic King, global economics and research manager for tax advisory firm Grant Thornton, attributes this low number in the U.S. and internationally to a number of factors, both cultural and policy-related.

The causes differ slightly by country. Japan, the worst-performing country in the study, is set back by its highly patriarchal society. Germany, with 14 percent of its senior management positions held by women, might struggle to break the glass ceiling because its efforts to promote gender equality are a little too strenuous; a three-year-long maternity leave, for instance, delays working mothers progress climbing the corporate ladder. Regardless of the reasons why, the result is the same: Around the world, companies fail to achieve gender equality at the executive level.

“Gender is just one element of diversity, but it’s a very important and underused element as far as our research goes,” King said.

Where companies come closest, however, is not where one might expect. Scandinavia is often thought of as a mecca for female empowerment, with quotas maintaining a minimum for female participation in government and on corporate boards. But while Scandinavian countries Finland and Sweden are above average, with 25 and 28 percent of senior management positions held by women, respectively, they are not the ideal range.

“Globally, we often talk about Scandinavia as a place where we have succeeded in increasing gender equality,” said Sofia Falk, founder and CEO of Wiminvest, an organization focused on gender equality. “That might be true when it comes to laws and regulations and social welfare. But when we look at the number of female managers, for example, Sweden is behind.”

Instead, it is in Eastern Europe where women are the highest achieving; women fill 35 percent of executive roles in that region. Russia in particular has nearly achieved gender balance, with a 4-to-6 ratio of women to men in senior management.

“It is perhaps not intuitive to think of Eastern Europe as being ahead of the curve when it comes to gender issues,” King said. “But there seems to be a strong legacy of the Soviet Era across all the countries in Eastern Europe — that equality of opportunity that was pushed by Soviet leaders as a communist ideal.”

Why Women Fare Better in Eastern Europe
It’s not just the number of women employed in executive roles that varies from the rest of the world — it’s the types of industries they are employed in. King said his organization has observed a lot of the women are employed in some of the fast-growing service sectors in places like Russia and Poland; sectors like financial services and health care have a higher than average proportion of women in senior roles.

What is really helping Eastern European women succeed is not just the culture of equal opportunity left over from the region’s communist roots, but also the fact that women are seeking out careers in fields that are increasingly important to today’s world economy.

Women in Senior Management Roles
Women in Senior Management Roles

“We spoke to the vice chancellor of the College of Cambridge, and she made the point that a lot of girls from Eastern Europe come over and study things like engineering and computer science,” King said. “There seems to be a slightly different mentality in Eastern Europe about the types of subjects girls can study and the types of roles women can take.”

In the U.S., meanwhile, women make up just 28 percent of all workers in science and engineering fields, according to the National Science Foundation’s 2014 Science and Engineering Indicators. This number is disproportionate to the overall workforce, of which women make up nearly half.

There have been a multitude of initiatives launched to attract more women to science, technology, engineering and math, or STEM, careers. Organizations like Million Women Mentors and the National Girls Collaborative Project work to increase girls’ confidence and interest in pursuing STEM occupations. Colleges such as Boston University and Arizona State University have made commitments to increase the number of women in STEM majors. Some Silicon Valley companies, including Apple Inc. and Facebook Inc., have even started offering to pay for employees to freeze their eggs, encouraging women to prioritize career over family in an attempt to retain female employees.

But until the U.S. manages to break the “steel ceiling” — work cultures that limit women to low levels or force them out altogether — the stats aren’t likely to change. “These subjects are increasingly important,” King said. If girls don’t see STEM industries offering realistic career paths, he said that eliminates a whole slate of talent.

Barrett said as a vehicle manufacturer, GM regularly has to contend with the gender gap. Some 80 percent of the jobs the company offers are in STEM fields or in information technology. But he said the corresponding numbers of women in engineering programs don’t match the number of roles to be filled.

Despite lower numbers of available female talent, GM employs more than 7,000 female engineers, and women work as plant managers and chief engineers. “We have some of the highest numbers of women engineers of any company out there,” Barrett said.

For companies in other industries, the STEM gap presents less of a challenge. Food services and facility management company Sodexo, for example, hires many employees trained as dietitians. Perhaps because it is a career more directly in line with traditional gender roles, dietitians tend to be female. In December 2013, the Commission on Dietetic Registration reported that of 89,300 registered dietitians in the U.S., 84,177 are women.

“In order to join our industry, you have to have a dietitian degree. A lot of women are dietitians, and that’s been a great career path for them,” said Rohini Anand, senior vice president and global chief diversity officer at Sodexo.

What’s Needed for Change
Sodexo has been able to succeed in countries that otherwise do not perform as well in terms of gender balance. In South American countries like Brazil, for example, where only 15 percent of senior management roles are held by women, the company boasts a roughly 35 percent female executive committee.

As a whole, management teams for 56 percent of Sodexo employees are gender-balanced, with the company defining gender balance as 40 to 60 percent female. It makes sense for the business.

This year, results were released for a case study done between 2000 and 2012 showing the gender-balanced management teams do better in terms of engagement, brand image, gross profit and organic growth. “In all metrics, we found that gender-balanced teams outperformed,” Anand said.

Sodexo has several initiatives in place to increase the number of gender-balanced management teams within the company, including leadership development programs, mentorship initiatives and sponsorship of high-potential women, which address a common barrier for women — poor visibility.

Work-life balance is another significant barrier, which Sodexo works to alleviate by offering flexible work arrangements.

GM also offers employees a full portfolio of flexible work options, including alternative work sites, part-time schedules, telework and job sharing. The challenge is ensuring that women feel they can actually take advantage of these offerings without it negatively affecting their careers.

“Sometimes in a lot of organizations you might have those types of policies on the books, but women feel uncomfortable being away too long or not necessarily being right in front of their supervisor,” Barrett said.

Outside the U.S., the availability of certain, potentially female-friendly benefits like paid maternity leave give those countries an edge in the senior female management stakes. While many U.S.-based companies, including GM, do offer paid leave for new mothers, it is not a benefit that is legally guaranteed in the U.S. despite the fact that maternity leave is mandated nearly everywhere else in the world.

32 percent of businesses have no female leaders.Although King said maternity leave can improve executive gender balance in the U.S., he is less certain about other government policy changes, such as implementing quotas.

“There hasn’t been enough study about the impact of quotas,” he said. “All we can say is it seems as if businesses have seen a lack of progress, and they are interested in what quotas can do, but they’re a fairly blunt instrument. You don’t want to see a woman promoted for the sake of having a woman there. I think that devalues diversity.”

He said it’s more important to figure out what organizations actually need from leaders and design leadership positions to be more attractive to women. For instance, if an organization’s culture is all about breakfast and dinner meetings and networking after work, that can make it more difficult for women who are juggling child care and a full-time senior role.

Companies have to really commit to being gender-balanced. By implementing a gender-neutral recruitment process, increasing the number of female candidates available for internal promotions, and creating incentives for managers such as gender-equality targets, Wiminvest’s Falk said there are a number of steps executives can take to adapt to the reality of workforce demographics and upgrade organizations to make a difference in gender dynamics in senior positions.

It’s worth making changes — to leadership development programs and mentorship initiatives, to increase sponsorship of high-potential women and adding flexible work options and paid maternity leave — because executive gender balance makes business sense. With women outpacing men in terms of higher education and consumerism, Barrett said they are highly valuable from both a talent and market standpoint. Therefore, they should be in high demand as senior managers.

“Any time you have the opportunity to connect with that particular group and bring more women in, it’s going to be better for your business,” he said.