Rethinking DEI? Women, equity and work

The largest corporate study into women at work in corporate America urges employers to keep going on their inclusion initiatives – or jeopardise the last decade’s “fragile” gains. New academic research from Germany suggests how.

Ruth Holmes

16 October 2024

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Diversity, equity and inclusion (DEI) programmes are under fire in the US. Some states have banned DEI roles in public services after the outlawing of affirmative action in colleges in 2023 by the US Supreme Court. Corporates are also cutting back on their budgets and reassessing their approaches.According to recruiters' figures over the past year, the number of DEI roles advertised has dropped by about 40% in the UK. This summer, Microsoft, long regarded as a DEI trailblazer, announced it was laying off its DEI team due to “changing business needs”. The software firm is not alone. Google and Meta have reduced the scope of their teams, while Elon Musk, the self-titled ‘technoking’ of Tesla, is openly critical of DEI initiatives.

A shift in attitude?

While it’s true that DEI lives in company culture and not in a job title – and that not everyone sees the justification for initiatives – headlines from McKinsey’s latest annual Women in the Workplace study, conducted in partnership with LeanIn.Org, and new academic research show a continued need to support policies and practices that advance women: if not in name, then certainly by aim, direction and intention, including with flexibility for all, and to make it everyone’s responsibility.Now in its tenth year, McKinsey’s survey of 281 participating organisations represents 10 million US employees. It finds it will still take women 50 years to achieve C-suite parity with men and even longer for women of colour. McKinsey and Lean In are calling on employers to re-commit to supporting women at every stage of their careers against these budgetary headwinds and shift in mood – irrespective of whether the US will have its first female president come the new year.Easy wins are continuing to debias recruitment and performance reviews, rebuild career advancement programmes, which have declined in recent years, and embed flexibility. In parallel, culture, allyship and individual action still play a significant part in effecting lasting change. This includes continuing to make room for people, like Elon Musk, who argue against specific programmes to support underrepresented demographics in business. After all, a key issue for both sides is how to treat people as individuals.One criticism for linking performance bonuses to DEI outcomes and target-driven approaches – a strategy being dropped by companies along with DEI teams in recent months – is the unintended consequence of hindering business performance.Yet, research shows that when handled well, there are clear economic and social benefits to having more diverse and inclusive leadership teams.What isn’t in doubt is that removing bias and seeking to understand different perspectives – sometimes through difficult conversations – is the right course of action. Still over half of managers and leaders say DEI is a top priority right now and for the future, with internal and external pressure driving change.Against this political and legislative backdrop and the ever-present opportunity gap, what can each of us do to understand and address the implications of the latest data around gender equity in the workplace?

Fixing broken rungs

Despite clear gains and momentum, equal gender representation at work remains decades away. The reasons for this are familiar.In the US, as in the UK, women are represented in higher numbers as graduates in the workforce and outperform their male peers at school. The moment women enter the workforce, their representation starts to fall away. Then again at the first career step to manager, women are far less likely to get promoted. In 2018, for every 100 men promoted to manager, 79 women were. And this year, that figure is only 81 women.“As a result of this ‘broken rung’, men significantly outnumber women at the manager level, which makes it nearly impossible for companies to support sustained progress at more senior levels,” say the authors.Comparing 2015 to 2024, women’s representation at work has risen by three percentage points to 48%. At managerial level, the increase is two percentage points. The biggest increases have been from lower bases: c-suite roles (29%, up 12 percentage points), SVP (29%, up 6 percentage points), VP (34%, up 7%) and director (37%, up five percentage points).Embedding these gains cannot be sustained unless there is more promotion at all career stages now. This is especially the case for women at the intersections of other marginalised groups, like women of colour, with a disability or who are LGBTQ+. In the US, Asian women have seen the greatest improvements to the “broken rung”, with 99 women promoted for every 100 men. Yet Black women (54) and Latinas (65) face the most significant barriers to promotion.

The ongoing importance of tackling negative bias

As well as workplace action, a focus on women entering the workforce in the next few years and those currently in their early careers needs to be a priority for employers.The charitable foundation, Inner Wings, recognises the importance of reaching girls before secondary school to build their confidence and expand their horizons about the career opportunities available to them.International schools’ focus on STEAM subjects is also helping to increase female participation and break out of the traditional female-dominated sectors, like health, education and retail and into tech, finance, technology and manufacturing. But it’s clear much more activity and collaboration are needed in this area.For Inner Wings, the launch of its advisory council, with high-level political, business and education support, is a clear statement of need, intent and its ability to influence and change make. For employers, addressing attitudes is also likely to prove fruitful; this through a mix of employee resource groups (ERG) on the one hand and evidence-based approaches to policymaking and practice on the other.A new study by Kristin Kelley, Lena Hipp and Paula Protsch at the WZB Berlin Social Science Center and the University of Cologne is a useful starting point for understanding perhaps why conversations around DEI have become more polarised, especially in this big election year; and how we can address these and adapt to continue to support the growth of a more equal and inclusive talent pipeline.Their research, 'Organisational Commitments to Equality Change How People View Women’s and Men’s Professional Success', shows the double-edged sword at the heart of DEI and women’s advancement programmes. This is, that a woman’s promotion is often seen as less fair and less based on merit than a man’s, but that a woman also has to work harder to secure that same promotion.“Our finding is that the public believes that intelligence and effort play less of a role in women’s promotions in organisations that commit to women’s advancement,” says Paula Protsch. When companies value women’s advancement or equal opportunities, women’s success is less likely to be judged as fair or attributed to intelligence and effort than when companies emphasise performance and uniform assessment standards.Such perceptions confirm that more action is need for women to be fully accepted, both in the workplace and in senior roles, and how committing to women's advancement involves achieving both parity of perception as well as parity of representation.

What practices are companies making the most progress on gender equity operating?

McKinsey’s ‘Women in the Workplace’ study reports that organisations with the most equitable workplaces have:

a head of DEI or equivalent
leadership involved in shaping DEI strategy
leaders who communicate bias is unwelcome
managers trained to support employee wellbeing and recognise and address disrespectful behaviour
employee resource groups
clear evaluation criteria consistently applied in performance and hiring
bias training for people involved in hiring and promotion decisions
family support and flexible working.

What is less helpful, however, is where different metrics or processes are used to evaluate men and women, which suggests preferential treatment and negative perceptions. “After all, gender bias is perpetuated most by those who do not believe inequalities exist. Special consideration should be given to how to frame equality commitments that gain the support of those who are most sceptical.”This is where true inclusion and belonging take root. As Ledetta Asfa-Wossen reported from Women in Tech week events, which address the vertical and horizontal segregation by gender in employment, affinity and employee resource groups are a highly valued approach to making meaningful change through allyship. The Women’s Network at Blick Rothenberg for example has helped to shape the company’s thinking on policy and practice for menopause and fertility planning. It is connecting people – men and women – across the business, promoting and deepening mutual understanding. These employee resource groups positively impact the whole talent lifecycle as part of a culture that encourages everyone, from senior to entry level, to remove the barriers to performance as they experience them.Along with its 2022 Relocate Think Global People Award for Excellence in Talent Development, Deployment and Diversity, Blick Rothenberg won the Diversity, Equality and Inclusion Initiative of the Year accolade at the annual International Accounting Forum in June. The audit, tax and business advisory firm’s Angela Cooke, head of diversity, inclusion and wellbeing, is now also appointed to Allinial Global’s inaugural DEI advisory board, where she will help other member firms overcome their DEI challenges.“Having a workplace culture where people can fulfil their potential and feel like they belong is more likely to result in improved engagement, wellbeing and productivity,” said Angela Cooke. “Not having an inclusive and diverse organisation risks poorer decision-making without challenge to the status quo, it risks poorer engagement from employees, and reputational damage if organisations get it wrong. Because of this, DEI are at the heart of what Blick Rothenberg do – we believe that success is a people business, and we are living our purpose to improve the lives of our colleagues, clients and communities. This is encapsulated by our drive to ‘celebrate individuality’ with an emphasis on promoting diversity and inclusion.”

Leaning into the future

This focus on inclusive belonging could be playing out in the type of support companies are offering in the McKinsey study.Over the past few years, US employers have cut back their tailored support for women’s career advancement. In 2015, 45% of companies surveyed ran formal mentorships, rising to 48% in 2022, but dropping sharply to 37% today. For women of colour, the fall from 2022’s 25% was sharper still, to just 15% in 2024.Less support for internships and recruiting programmes, especially for women of colour, is also evident in the survey. Between 2022 and 2024, female-focused internships fell, from 24% of companies surveyed to 11% and 14% to 8% for women of colour. Recruiting programmes for women also fell from 48% to 34%, and from 30% to 18% for women of colour.If the dial had shifted on the horizon for parity, then this would be less of a concern. But the data aligns with the sentiments and perceptions of unfairness and positive discrimination at a time when the research shows employers would do better to double down on diversity and inclusion investment.Paying attention to talent attraction and the employer value proposition and individual needs around career development and culture, as well as benefits and rewards, hybrid and international opportunities, including dual career, and wellbeing, are going to be key if the trails blazed by senior women over the past decade are to remain open and accessible to a deeper talent pool.Fortunately, companies surveyed are setting inclusion as a top priority for managers and doing more to activate employees as agents of change. Nearly all companies now offer bias or allyship training. Yet still only around a third of women (32%) and 29% of men say they will take a public stand for racial equity and similar numbers for calling out microaggressions against women of colour in the moment. Practical training, leadership and awareness of perceptions of ‘fairness’ versus the reality, and the ability to have difficult conversations will help foster a corporate culture where everyone feels included and a sense of belonging.“The next phase of change will require even more tenacity, creativity and optimism, which starts with companies rekindling their commitments to equity and fairness that have gotten us this far,” says McKinsey. “For senior leaders, this means continuing to champion this important work and challenging themselves and their organisations to do better. For most companies, this will require implementing more of the right practices to help women advance.”

Think Global Women: best practice and policy guidelines

Delegates at Think Global People’s 2024’s International Women’s Day event at the Institute of Directors – themed this year on ‘inspiring inclusion’ – shared what works in their organisation and the international context. The framework covers seven areas:

flexible and hybrid working practices
wellbeing, resilience and mental health
menopause awareness
building confidence and creating allyship
international mobility and career advancement
pay disparity and pay equality.

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