Mercer: Female representation at managerial level lags

04 January 2016 Consultancy.uk

Women still face considerable barriers at almost all levels of business. Globally, 38% of professionals are female, with stepwise decreases across higher ranks, research by Mercer shows. On average only 20% of executives are female. While much is being done to improve the numbers, change remains slow. In Europe, actions undertaken are projected to see executive level women representation increase to around 35% by 2025. The lower levels however, will still see considerable disparity at the current rates of improvement.

Gender diversity in businesses has, over the past years, grown into one of the most prominent topics on the management agenda. For a long time, diversity discussions between business leaders, academics and cultural leaders alike centred on the social and ethical sides of the debate, yet of late the weight of the dialogue has shifted towards hard numbers. For businesses – driven by the profit imperative – gender diversity is now a strategic financial issue. Various reports have in backed the business case for diversity, including research from BCG (‘The Diversity Paradox’), a report from Grant Thornton warning that a lack of female leaders is costing large corporations billions in opportunity costs, while across the globe, a broader McKinsey & Company report on gender equality finds that gender parity in work could add $12 trillion globally to world GDP by 2025.

Revenue and regional profile of participants

Helping women reach the top of the organisational structure is no easy feat however. Discrimination and invisible barriers are experienced at various levels, holding back both progression and the requisite pipeline of available talent for the group to reach the next level within the organisation.

To gain detailed insight in the dynamics, Mercer, the HR consulting arm of Marsh & McLennan Companies, has for the past two years researched how and where bottlenecks for women occur within organisations across the globe. The preliminary results for the 2016 ‘When Women Thrive’ series have been released – in the report Mercer and the EDGE Certified Foundation work together to provide a clear picture of the state of affairs for women in business, a projection of where things are going, as well as key levers for bringing about positive change in key regions.

The research is based on 647 unique survey submissions from 583 organisations around the world. The research further uses Mercer’s database of 3.2 million employees across the globe, 1.3 million of whom are women. The largest number of respondents stems from the US/Canada and Asia, while the revenue profile of the companies is relatively evenly distributed between those ranging from $100 million to $500 million and those from more than $10 billion.

ILM map for the average global organisation

The global picture
The representation of women stands at 38% across surveyed global organisations, although it changes considerably the higher up the corporate hierarchy. Half (49%) of support staff are female, a figure that drops to 38% for the professional level. Accessing the managerial level becomes considerably tougher for women, with only 33% of available positions in the hands of a woman on average. Senior management sees around a quarter of positions filled by women, while only 20% of executive chairs held by women.

The research finds however that there are considerable disparities between the hire and exit rates for women, and while women tend to be hired more often than men for the executive level, they also tend to exit more often. 

ILM map for the average European organisation

The European picture
The European picture is relatively similar to the global one, with a slight increase (2%) in women on average employed by the surveyed organisations. There tends to be slightly more female support staff, as well as a slightly higher number of professional females relative to the global picture. The next two levels above the professional level however, see fewer women than the global average. Only 32% of managers and only 24% of senior managers are women. Focus on increasing the number of women in executive roles is partly reflected by the average number of women in such roles at 21%.

Although the number of women at the executive level is above that of the global average, the researchers raise the concern that the lower level of women entering managerial seats means that the long term prognosis for parity at the executive level will be hamstringed. Within a strong talent pipeline from the lower ranks within Europe, the long term trend may be weakening. A further issue highlighted by the report is that the number of women exits from the executive level is higher than the level of hires.

Executive representational change for Europe

European women executives
According to the report, the current projection for female executive growth is relatively healthy, with more and more policies being introduced to spur such growth across the region. Even with only a baseline level of growth, nearly 35% of executive roles will be filled by women by 2025. If turnover issues at the executive level were to be addressed, this could increase to above 35%.

Representational change for Europe 2015-2025

European projection
For the above professional level however, the projection looks considerably more conservative. The research highlights that at the current level there will be little effect on the number of hires above professional level in Europe if things stay as they are now. To increase the % representation of females above professional level, a number of levers – particularly adjustments to hiring and promotions – need to be implemented. A complete focus on the three factors, hiring, promotion and turnover, would see the number of women above senior level increase to around 42% by 2025 – still well below parity.

According to the report, “An opportunity is clearly in reach through driving more promotions, particularly for those women in the Support level; European organisations should not limit their internal development programmes to Management and Executive levels only, but also ensure that they address the opportunities among more junior levels.”

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