Why is Australia slipping on gender diversity?

Australia is falling behind in gender equality in the workplace

Five out of six Australian chief executives are men and Australia is falling behind on progress in workplace gender equality. Why?

2016 was not a good year for gender equality in Australian workplaces.

In the annual World Economic Forum (WEF) Global Gender Report, Australia fell to 46th ranking in the world in 2016, from 15th position in 2006.

In Australia, women make up just 37 per cent of managers and the gender pay gap is 23.1 per cent, costing women A$27,000 a year.

Gender diversity in the workplace is a no-brainer, says Elizabeth Shaw, national president of UN Women National Committee Australia, which represents the United Nations’ gender equality agency.

“Research consistently tells us that diverse teams make better decisions and lead to better outcomes, in terms of financial performance, risk management and organisational culture.”

In the 21st century, a rapidly changing marketplace facing constant disruption requires the deployment of all available talent, says Virginia Haussegger, director of the University of Canberra’s gender equality initiative, the 50/50 by 2030 Foundation.

“While women remain under-represented at leadership level, at management level, at team leader level, we’re denying not only access to greater talent, but also access to the diversity of thought,” says Haussegger.

What’s going wrong with gender equality?

Australia’s lax attitude towards gender diversity puts the nation’s economic prosperity at risk, she argues.

“We have hit a glass wall … we can’t afford to let this issue of gender inequality, particularly in our workplace, drag on for another 30 years.”

The problem isn’t that gender equality in Australia has regressed dramatically. Instead, as the 2016 WEF Global Gender Report shows, the nation has been overtaken by countries that are making progress.

Nicaragua improved its position from 62nd in 2006 to 10th in a decade, thanks to strong scores for political empowerment.

In Africa, Rwanda (ranked 5th), Namibia (14), South Africa (15) and Cape Verde (36) outperformed Australia in 2016.

Closer to home, the Philippines was at 7th place, New Zealand at 9, Singapore at 55, China at 99 and Malaysia at 106, out of 144 countries.

In the last 10 years, female workforce participation in Australia has remained constant at around 59 per cent, low by global standards, and low compared with top-performing Organisation for Economic Co-operation and Development (OECD) countries such as Sweden that boast high female full-time employment. 

At play are two factors: unpaid and part-time work. Women, regardless of their employment status, do more housework and childcare than men, and make up 71.6 per cent of all part-time employees in Australia.

The economic cost of workplace inequality

These gaps, argues the McKinsey Global Institute’s Women Matter 2016 report, must be addressed to achieve gender equality in the workplace.

Women who don’t satisfy the “anytime performance model” – where career advancement relies on around-the-clock availability – are routinely passed over for promotion.

Those who work part-time are being sidelined from senior roles, says Haussegger, “because we haven’t developed a culture of flexible part-time arrangements around executive roles”.

Low female employment constitutes a missed opportunity for the Australian economy. 

“Increasing women’s workforce participation is a key productivity lever for many countries around the world, including Australia,” says Shaw.

The McKinsey report suggests that narrowing the labour market gender gap could see an 11 per cent boost to global gross domestic product (GDP) by 2025.

The Grattan Institute’s submission to the Productivity Commission in 2014 stated that increasing female workforce participation in Australia by 6 per cent – to make it comparable with Canada – would result in a A$25 billion uplift to GDP.

Fixing gender inequality

Targets, and their punitive sibling, quotas, have been shown to improve gender diversity in the political arena.

“There are over 110 nations that have some form of electoral targets and quotas to enable greater participation of women in politics,” says Haussegger.

In Australia, where mandatory quotas have so far been resisted, women occupy 29 per cent of seats in the commonwealth House of Representatives.

In Bolivia and Nicaragua, where legislated quotas are in place, women occupy 53 and 40 per cent of parliamentary seats respectively.

In 2015, the Australian Institute of Company Directors (AICD) launched a high-profile campaign to achieve a target of 30 per cent female representation on ASX200 boards by 2018.

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Corporate boards are a traditionally male milieu: in January 2010 women occupied just 8.3 per cent of board positions.

Now, two years after the target was set, women hold 25.1 per cent of board seats.

ASX200 companies with no women on their boards – regularly named and shamed by the AICD – number 16, down from 87 in 2010, while 64 companies have met the 30 per cent target.

Of those, Medibank is the star performer. Chair Elizabeth Alexander presides over a board with five out of eight positions occupied by women.

Another seven companies have 50-50 board representation.

Perhaps the most significant statistic is the rate of female new appointments, more than 40 per cent, giving hope to the AICD’s chances of achieving its target by the 2018 deadline.

Incidentally, five of CPA Australia’s 12 board members are women. 

Setting targets with teeth in gender equality

“The important thing,” says Shaw, “is to ensure that the targets are not merely aspirational, that they are ‘targets with teeth’ with real consequences, [such as] impact on performance ratings and remuneration, for leaders who do not meet them.”

The repeated failure of organisations to reach voluntary targets has led Haussegger to support quotas, when coupled with supportive measures such as the adoption of strategies to overcome unconscious bias in recruitment.

“We’ve seen quotas work in our trading partners around the world,” she says.

In Norway, women make up 39 per cent of boards, thanks largely to a law, in effect since 2006, mandating a 40 per cent minimum quota for each gender on boards of publicly-listed companies.

Those that don’t comply risk delisting.

Achieving meaningful gender diversity requires cultural change owned and led by the business, not just the human resources department, says Shaw.

It is a process that requires strong leadership, a clear vision and effective communication to equip every level of management “with the skills and capability required to lead diverse teams and create an inclusive work environment”.

Read next: Powerful lessons from women who lead.

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