women in management

Is gender equality good for business?

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Photo Credit: AP Photo / Richard Drew

Is gender equality good for business?

Generally, attempts to answer this question focus on measuring the financial performance, and stock-market performance of companies led by women CEOs or with female directors.

Last week, for example, market index provider MSCI released a study showing that companies with at least 3 board directors or a higher percentage of women on their boards (compared to their country’s average) generated 36.4% higher returns for their shareholders than companies where women were not as well-represented. This analysis was based on a review of 4,000 global companies since 2009.

We’re not surprised to see gender equality correlated with financial success. Past studies (such as this one from Credit Suisse, and another from Catalyst) have shown similar relationships between gender diversity in the senior leadership and financial out-performance.

So if gender equality means financial success, why aren’t there more companies jumping on the bandwagon? We’d venture to guess that part of the reason is simply that the studies show correlation — not causation. Financial performance is easy to measure but it’s a tricky thing to understand, much less find a “formula” for. Many variables go into what makes some companies more successful than others — as mountains of business books demonstrate.

Another reason may simply be that female representation at the upper echelon of a company is not exactly the same thing as “gender equality” at that company. To use an analogy, having an African-American President of the United States doesn’t mean there is racial equality throughout America.

Don’t get us wrong — It’s certainly important to measure gender equality by tracking the number of companies with female CEOs or directors. However, if you believe a company’s financial success depends on having a culture that welcomes and fosters diversity of thought and opinion, a culture of gender equality throughout all levels of an organization is probably equally important. After all, many critical business decisions are made every day that never make it up to review of the C-suite or director level. The way a digital product is designed, discussions over the way a car’s safety feature is tested, how a new campaign for children’s toys is marketed to households are all decisions initially made at the lower-to-mid levels of a company where diversity and representation of thought are critical.

That’s why we try to measure what all women at an employer think. We ask every woman in the Fairygodboss community whether they think they’re treated fairly and equally to men at work. In analyzing thousands of employee reviews, we’ve found that when women report there is gender equality in their workplace, they also report overall job satisfaction. Since job satisfaction is one predictor of how likely an employee is to remain at an employer — it’s an important measure of employee turn-over and recruitment costs.

In other words, gender equality is certainly good for business in terms of being able to recruit and retain employee talent. Stay tuned for more of our findings about gender equality in the workplace!

Fairygodboss is committed to helping women in the workplace. 

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working women

What We Talk About When We #TalkPay

Last Friday, May 1 was International Worker’s Day.  Though not observed in the U.S., this is a holiday celebrated in many countries.  In its honor, a female programmer, Lauren Voswinkel kicked off a trending Twitter discussion of salary under the hastag #TalkPay.  She did this to draw attention to the pay differences between men and women and minorities.  She started by setting an example and disclosing her own salary.  Thousands of others (working predominantly in the tech sector) followed suit.  For those of you that missed Friday’s disclosure party, here are a few tweets that are still around:

There isn’t much more to look at now because it seems people seem to have removed their tweets over the weekend.  We don’t think this takes away from their many individual acts of public bravery, but unfortunately the totality of the data is difficult to analyze when its no longer there.

What we can analyze at Fairygodboss is what our community of professional women report as their most recent salary band at an employer — and just as importantly — how they feel about their compensation.  In other words, you can make any amount of money and it can be objectively be considered “reasonable”, but if you perceive that you are not paid fairly (for whatever reason), you will not be a happy camper.

When we ask our members about what advice they would give to themselves when they first started their job — or to other women considering the company — many say they wish they had negotiated or asked for more pay.  They say things like:

Believe in your worth and negotiate a higher starting wage.  It will compound over the years.

or

I wish I would have known that my starting salary and level would be an issue throughout my entire career… Don’t under estimate the importance of negotiating a good salary, title, level from the start.

Another topic women in our community feel strongly about is inextricably tied to pay, but much harder to measure: career advancement.  For example, some of our members feel very strongly that men and women are treated equally and fairly in their companies.  For example, one member writes:

Women make equal to or better than men in most positions (info from HR), so there is NOT a wage gap. Women are paid fairly, but there is a gender gap in women making up fewer roles in the company.

If the latter is true, then the issue of pay becomes less about dollar amounts, but whether women face a glass ceiling, or have an equal shot at promotion / advancement to certain leadership roles.

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working women

How to Find a “Multidimensional” Role Model

Yesterday, Fast Company profiled Lyft, the car sharing service.  Its a good read for women in STEM looking for role-model profiles or for an example of a tech-startup that has good gender diversity.  According to the article, Lyft’s management ranks (i.e. director level or above) are 47% female, and include roles in engineering and operations.  I’m writing about the article because I thought one of the most practical things I ever read about balancing work and life responsibilities was snuck into the beginning of the piece, in the section about Lyft’s CMO, Kira Wampler.  When Wampler was considering positions at different companies after business school, this is what she did:

“I would ask them, can you give me an example of someone in your organization who is roughly this age, who has roughly this number of kids, who just had a promotion?”

That kind of foresight and personal work-life planning is not necessarily common, but it could be very helpful to women who know that not all employers and companies are equal when it comes to supporting working women with families, or who want to have families one day.  Also, its another way of thinking about “role models” within an organization.  Role models don’t just have certain titles — they also have whole lives that we might want to emulate.

It makes me think that this is the type of information we should try to solicit on Fairygodboss from users.  After all, its the kind of question that isn’t necessarily socially or professionally acceptable to ask during the interview process (though its arguably easier than asking about maternity leave policies) and isn’t disclosed (or even measured) by companies.  What do you think?

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working women

Women in Finance Are a Small Pool…Across the Pond

Last weekend, the Financial Times featured an article about women in the “City” (the name for London’s analogue to New York’s Wall Street, which was historically a square mile of London dominated by financial institutions).  A little background here: the UK tends to fall somewhere between the United States and continental Europe in terms of employee benefit policies (i.e. it tends to be more generous than the United States in terms of favorable employee protections such as maternity leave, but less generous than many European countries).  In terms of the challenges women in finance face, however, things in London look a lot like things in New York.

While the gender ratio in the overall staff of City employers is close to 50/50, top management is dominated by men (80%) and women report a macho culture that make it difficult to succeed.  This is despite the companies’ attempts to “have some of the most proactive female employment policies around.”  Unlike the U.S. banks, where to my knowledge there are no targets for female management, several institutions in the U.K. such as Lloyds Bank, the Bank of England and Barclays are cited as having goals for female management numbers (with Barclays making diversity one of 8 factors upon which bonuses are based).  I find it striking that many of the top financial institutions in the U.S. similarly have very strong benefits for maternity leave, childcare, not to mention diversity programs and training.  And yet, these places still purportedly feel very difficult for women both in London and New York.  The reasons cited for the dismal female management numbers are similar to the ones you hear often in the U.S.: grueling hours, the conflicts of motherhood, and the lack of female role models.  Another reason is described in the article by a 30-something year old woman who left a career at Goldman Sachs for private equity.  What she says is interesting because I’ve rarely heard it put this way in print, but find it resonates with what I’ve personally observed:

“Many women in finance didn’t always envision a career in the industry — they were educated or convinced into it…Banks then compound this by actively recruiting female hyper-achievers, who see a job in the industry as a stereotype to beat. They often excel for two to four years, then get slightly bored and want a new challenge.”

In other words, its probably true that certain high-achieving women also have many career options and choose to leave for reasons that are personal.

Ultimately, while the article has no conclusion, it provides a great overview of the state of women in finance, and covers HR benefits, policies and catalogues what certain companies are doing to address issues such as flexible working, maternity/paternity leave, and childcare.  Its a great read in comparative issues, and may even foreshadow certain things to come in the U.S.

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