In recent years, businesses across sectors have made some progress into improving gender diversity at leadership level. In McKinsey’s 2023 Women in the Workplace report, they noted that women made up 28 percent of C-suite leadership positions, a 6 percent increase from their reported number in 2018.
Despite this small gain, there is still a gap when it comes to mid-level leadership roles. While 48 percent of hires at entry-level are female, only 40 percent are managers and 37 percent are at senior leadership or director level. This trend shows a disparity in career progression between men and women, as men make up 52 percent of entry-level hires, 60 percent of management roles, and 63 percent of senior leadership or director-level roles.
This data shows that while the entry-level hire rates of men and women are near-equal, men are being promoted at a much higher rate than women are.
In this blog, we’ll explore why gender equality in leadership is important, how diverse leadership teams positively impact organisational performance, and what businesses can do to increase gender diversity in leadership roles.
Why is gender equality important in leadership?
While many companies still aren’t making gender diversity in their leadership teams a priority, studies have shown that increasing female leaders and representation in high-level leadership positions has the potential to have a significant positive impact on the company.
A diverse board or leadership team benefits from a wider range of experience, skills and perspectives. Having a team at the top who represents the whole company and all of its employees encourages a more inclusive work environment, as all employees are more able to find role models within leadership. The range of different perspectives in leadership also strengthens the company externally. More diverse companies are better able to win the top talent and hire the best employees available, improve employee satisfaction and decision making, and translate that into increased company performance and profits.
McKinsey’s 2015 Diversity Matters research report found that companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians. In the United Kingdom specifically, greater gender diversity on the senior-executive team corresponded to the highest financial performance uplift in their data set. For every 10 percent increase in gender diversity, earnings before interest and taxes (EBIT) rose by 3.5 percent.
However, In McKinsey’s Diversity Matters report, they found that in the United Kingdom, women made up just 12 percent of the executive teams. So, while the potential for success is clear when leadership teams are diverse, that diversity is still severely lacking.
How can organisations increase gender diversity in leadership roles?
If women aren’t encouraged into low or mid-managerial positions, they aren’t able to gain the ability to continue climbing the ladder to the top. Without the corporate experience necessary to reach C-suite level, progress towards female leadership and achieving equality at the highest level of corporate power is and will remain slow. Mid-level and senior business leaders have to play an active role in ensuring women have the same opportunities for career advancement, promotion, and career growth as their male co-workers.
There are many ways an organisation can focus on improving gender diversity in their leadership teams. Some of these are outlined below.
Ensure there is clear job performance evaluation criteria
In McKinsey’s Women in the Workplace report, it noted that a high number of women are less likely to get credit for their successes and are more likely to take criticism for failures. In many cases, they have to provide more evidence of their competence, and are more likely to have their judgement and decisions questioned.
These issues are even more pertinent for underrepresented women of colour, and women of colour are more likely to be mistaken for someone in a more junior role than their white counterparts. According to the Harvard Business Review, nearly 50 percent of Black and Latina scientists report being mistaken for administrative or janitorial staff.
Clear and unbiased evaluation criteria ensures that women are fairly evaluated compared to their male counterparts, both through the hiring and promotion process and within their roles. Companies must also make sure their employees are able to highlight gender bias and identity stereotypes, and these moments are productively resolved.
Analyse corporate data for a clear view of employee metrics
Companies have the opportunity to ensure women are paid fairly compared to their male counterparts by tracking salaries according to gender and race.
Payscale’s annual Gender Pay Gap Report (GPGR) shows that there is still a gender pay gap between male and female employees across sectors. What’s more, women of colour make less than white women – both at the beginning and throughout their careers.
When companies make a concerted effort to track and analyse the data of their employees, they have control over narrowing the gap in both gender and race pay inequality within their organisations. By ensuring women are paid fairly, they are more empowered and respected to progress in their careers up to senior leadership positions.
Take an active role in preparing women for leadership
While many companies run mentoring schemes, these mentorship schemes often don’t feed into practical or actual career progression.
Senior leaders have a responsibility to ensure that women are coached and given the same equal opportunities to initiatives which showcase their abilities, network with senior leaders within their organisations or on LinkedIn, and promote their visibility. As well as gaining the necessary skills needed for the next level, women also need to be able to grow their profile in the business to put them in a good position for progression.
Have open and honest discussions about bias
Senior leadership teams need to be open and accountable when issues of discrimination on the grounds of race of gender are raised within their business.
While navigating these discussions can be difficult, being willing to engage and to be proactive when bias is flagged promotes a safe and inclusive workspace for all employees which is committed to the representation of women at every level.
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