Pay equity: Closing the gender gap improves your bottom line
Despite years of high-profile diversity initiatives at corporations across the world, a recent study by consulting giant McKinsey & Co. paints a sobering picture of stalled progress.
According to McKinsey data gathered over four years, women’s representation steadily declines at every level up the ladder. This happens despite more women than men earning college degrees each year, actively pursuing raises and promotions and staying on the job just as long as men.
At the critical first step up the corporate ladder, when workers transition to management positions for the first time, women immediately lose ground compared to their male peers, dropping from 48% of entry-level workers to 38% of managerial staff. And that trend is even more stark for women of color.
By the time someone works their way up the ranks to take on senior executive responsibilities, women make up just 22% of the total, and women of color hold less than 5% of C-level jobs. And at each stage of the pipeline, women’s representation has barely budged over the last four years.
Gender equality is good for business
This is more than a legal or social justice issue. Other McKinsey data indicates that increased diversity gives employers a competitive edge and correlates to above-average financial results.
McKinsey makes six key recommendations that’ll help companies improve diversity and tap into this under-appreciated source of business-performance fuel:
- Get the basics right—targets, reporting, and accountability.
- Ensure that hiring and promotions are fair.
- Make senior leaders and managers champions of diversity.
- Foster an inclusive and respectful culture.
- Make the “only experience” — where a worker is the only woman/person of color/LGBTQ/differently-abled person on a team or in a department — rare.
- Offer employees the flexibility to fit work into their lives.
McKinsey’s research and other large-scale studies make clear that it’s past time for companies to make hiring and promoting a diverse workforce a top priority. HR pros should work with leaders in all departments to set meaningful targets and make sure management is accountable for making progress, not just for saying the right things.
Gender equality is an important issue of fairness in the workplace, and there’s still a massive amount of work that remains to acheive it. But by taking the right steps, not only do employers help out their employees, they help their own bottom line.