- If you aren’t increasing women’s wages at least as fast as men’s ACT NOW
The poor old politicians of the UK and Europe are tormented.
McKinsey, Goldman Sachs, Credit Suisse and many others have shown them a significant strategy for step-changing economic performance– a recession buster. All they need is a critical mass of women at top of businesses. But how the hell do they make this happen any time soon when 40 years of Equal Opportunity legislation hasn’t done it?
Recent targets for female Non-Exec Directors on boards of leading companies have resulted in an apparently promising shift in the number of women who attend the board meetings of leading companies in various countries in Europe. But those are the only days these women are in the building, because, unlike Executive Directors, they work on, not in the business.
The number of female Exec Directors is static – and very, very small. So there aren’t the role models to encourage the up-and-coming female talent to hang on in there, demonstrating that it can all be worthwhile. So, there aren’t the individuals who have felt the pain of trying to find a route through the labyrinth to leadership that women face, who could champion the changes needed to make the journey more straightforward and tolerable for women.
And, what of the next layer down that feeds the boardrooms? Think tumbleweed, not female talent. Leading companies have recruited non-execs but they’re not succeeding in bringing their own existing female talent up through the business.
One of the reasons for this is linked to the fact that the vast majority of women don’t ask for pay rises and promotions, or the high-profile assignments that get them noticed. Unlike men, they don’t apply pester-power techniques, routinely engaging in “pay-me-more / promote me, or I leave”, negotiations. Why does that matter? Because if you don’t proactively give them what they merit without being asked, they won’t tell you they’re unhappy – they’ll just leave.
Maybe your competitor will gain.
However, more and more women now are setting up on their own. If the corporate world can’t reward their talent and give them a working environment that works for them, they’re choosing to make their own culture and rewards. And, my God, they’re making it work. Whereas the UK gender pay gap stands at 15.5%, the UK’s female entrepreneurs are reversing that imbalance and earning 17% more than men**. In the US, research has shown that women -owned firms (>50% female ownership) have grown at twice the rate of all privately held firms in the past two decades****.
That’s a huge win for them as individuals, a win huge for their business. Oh, and a loss for you… and your shareholders
In a recent selling meeting, I was asked how the Board could possibly be convinced to introduce the Women’s Sat Nav to Success™ given one of the outcomes is that women cost more money through the pay rises and promotions they secure. The answer is clear. The short version is – can they really afford not to. To spell it out – the opportunity costs arising from the loss of their talent [back to Credit Suisse]; the costs of recruiting and training their replacements and the reputational costs will be far higher.
So, companies must learn how to read the deeper implications of the gender pay gap for their business. They must understand the implications for their bottom line, their shareholders and our economy of not securing the female pipeline. They must invest in developing the capability of women to speak up, and when they do, for their voices to be heard, and their contributions valued –in every sense.
* The Credit Suisse Research Institute. Gender Diversity and Corporate Performance. Aug 2012
** Barclays Wealth & Investment Management. Survey January 2013
***Eagly and Carli, “Through the Labyrinth”. Harvard Business Press Aug 2007