Gender quotas in the workplace: Do they work and should we have them?

As the voices grow louder demanding equality in the workplace - as women continue to be under-represented in senior positions and a significant wages gap still exists - we look at gender quotas, what they are, whether they work and if we should have them.

Gender quotas: it is a contentious topic that elicits some strong opinions. Yet with women continuing to be under-represented on company boards and paid less than men on average, there is clearly more that still needs to be done to redress gender inequality.

Steven Ansicar, Managing Director of Diversity Australia since 2015, said gender diversity in the workplace had been shown to improve the morale and often the bottom line of businesses.

“Quotas are an admission of guilt that your systems and processes haven’t worked,” Asnicar said, cutting straight to his point. “Ideally, we should focus on the right person for a role not the right gender, race, religion or sexuality.

“I think most Australian businesses are frightened by gender quotas and in a number of recent organisational reviews many people, both male and female, commented that after quotas were announced they lost staff. They felt it was a tokenistic approach that didn’t fix the systemic issues, but masked them under a different heading.

“However, business and society benefit from diversity,” he said.

“The ability to provide great service to customers is about making sure the employee base has as much in common with the end user. This brings a better understanding of the services required and better meets the customer’s needs.”

Journalist Catherine Fox (pictured right), the Financial Review’s former Corporate Woman columnist and author of Stop Fixing Women, said quotas in the workplace were a necessary step to addressing gender imbalance.

But she stressed they are simply one step which needs to be consciously built upon.

“I think quotas can be a very effective and temporary tool which is a stepping stone to change,” she said. “Quotas change the complexion of a cohort and are designed to eventually become redundant. We have tried a lot of ways to improve gender equality in the workplace including targets. It’s not that much of a stretch to formalise or legislate for that.”

For many Australians, the notion of equal gender representation in the workplace is non-threatening and something which should be an obvious goal. Despite this, the reality is that women are far from equally represented in the workforce and the higher you look up the corporate ladder, the less likely you are to see women.

Data from the Australian Workplace Gender Equality Agency (WGEA) shows that in 2017, men working full-time were still paid an average 22.4 per cent higher than their female peers and this is an improvement of less than one per cent on 2016.

Fox said if there was a need to support the argument for advocating women’s rise through the workplace, you need look no further than the number of women who are running ASX200 companies.

“If you look at the ASX200, I think women are running about 10 of those companies,” Fox said. “It has been said before that there are more men named ‘John’ or ‘David’ running ASX 200 companies than there are women. I would argue it is not because of a lack of merit, skills or qualifications.

“We have very high levels of women being educated and women account for about 47 per cent of the workforce. This is not a supply issue; this is about demand.”

Watermark Search International in its 2018 Board Diversity Index, shows that women hold just 26 per cent of Directorships with ASX200 companies and that the target of the Australian Institute of Company Directors of women having 30 per cent representation on Boards by 2018 would not be realised.

“Only about 22 per cent of equity partnerships in law firms are women and women are graduating in higher numbers than men from our law schools,” Fox continued.

“There is no evidence to show that what we have been doing in the past will change anything. Why do we think that doing things the same way will create a different outcome?

“We are spending millions on diversity training that doesn’t seem to be delivering the change we need.

“It is clearly not always the case that people are chosen for jobs based on merit alone; that argument just fails the logic test,” she added. “We all have our own bias which operates all the time in the business world. We need to stop using the word ‘merit’ which is very subjective and talk instead about skills, qualifications and experience.”

Asnicar (pictured left), who favours targets over quotas referring to the old adage you can’t manage what you don’t measure, said they should be seen as encouraging conversation around the topic but are not always a practical solution.

“There is no one-shoe-fits-all approach to gender equality, with every industry needing to approach gender diversity based on its workplace culture and strategic needs,” he said.

“Nursing and teaching are good examples where a gender quota would be difficult because there is a disproportionate number of women in those roles.”

Dr Cate Borness, an organisational psychologist who consults to large corporations and government on workforce design issues, agreed saying that while gender quotas increase awareness of the need for equal representation in the workplace, they can also ignore the reality faced by some sectors and companies.

“Quotas feel like they have been enforced rather than consulted upon,” Dr Borness said.

“Organisations have been mandated to meet certain numbers without a true understanding of the reality of the industry, profession or occupation. The transport and logistics industries are male dominated because women are not attracted to this kind of work in the same numbers.

“Each industry, profession and occupation needs a tailored approach to developing a realistic target for employment gender quotas. Some organisations are more advanced, but this may be because they offer a broad range of roles that are more suited to younger vs older workers, males vs females, one ethnicity over another.

“Or they use merit-based, transparent selection, development and promotion processes and provide a work environment that allows people to feel engaged, supported and valued. Other organisations who are less sophisticated in their human resources and talent management processes tend to lag behind.”

Dr Borness said she is aware of “many large private organisations” that have no policy, strategy or targets to achieve gender equity because “the business is highly successful so why change the mix?”

“We are a diverse nation that needs to keep as many of its people employed as it can for a sustainable economic future. There is ample research about the benefits that diversity brings to business but I believe that that diversity mix should reflect the people that the organisation exists to serve.”

Theaanna Kiaos, the Founder of Australia’s Diversity First, said some of the onus on redressing gender inequality falls to recruiters who, research shows, may hesitate to put women forward for a role they perceive to be in male-dominated industries such as construction.

“We need to look beyond the superficial characteristics of candidates and look at the untapped potential instead of putting people in pigeon-holes all the time,” Kiaos explained. “A diverse workforce cultivates diversity of thought, whereby new ideas can be explored ultimately challenging the status quo which is exactly what we need in a 21st Century workplace culture that is lacking in innovation.”

While the aim, as Fox sees it, is to “stop marginalising women from power”, she believes this also means “we need to stop trying to fix women and instead fix the structures and thought processes in place”.

For Dr Borness, the road to gender equality starts with inclusive practices in the workplace.

“For example, we need to design talent management systems and processes that do not penalise primary carers, such as offering a job to someone with no primary caring responsibilities over someone equally qualified but with primary caring responsibilities,” Borness said. “Or catering to part-time workers by structuring promotional systems that allow them to participate equally in leadership development programs. We really need to look at the broader social lever of access to quality education. All jobs require some sort of training. For example if we are to enhance the number of women in engineering or IT, it starts at school where they need to be encouraged to pursue STEM.”

“And we also need to work with human resources teams to implement processes that encourage inclusiveness and equal opportunity for employees to reach their full potential, while educating all staff about unconscious biases, tolerance and valuing our differences rather than fearing them.”

Or as Fox put it: “If businesses really want to benefit from being disruptive, treat women equally.”

FACT BOX

The 2018 Board Diversity Index produced by Watermark Search International shows women continue to be under-represented at the Board level across ASX200 companies, including 11 of those which have no female representation at a Board level.

The Index also revealed women hold:

• 30% of Directorships with ASX50 companies

• 29% of Directorships with ASX100 companies

• 26% of Directorships with ASX200 companies • 24% of Directorships with ASX300 companies

“As we have noted for the past two years, the ASX200, let alone the ASX300, are not going to meet the target set by the Australian Institute of Company Directors in 2015 to have a 30 per cent representation of women on Boards by the end of 2018,” Watermark said in its report.

Australia’s Workplace Gender Equality Agency (WGEA) reports that in 2017, a gender pay gap of 22.4 per cent still existed in favour of men for full-time employees in Australia. This represented a closing of the pay gap by just 0.7 per cent on the previous year. Notably, the gender gap increased in 2017 for labour- ers (up by 3.9 per cent year-on-year) and sales (up 0.4 per cent y-o-y). Roles that recorded the most improve- ment in redressing the gender pay gap in 2017 were key management personnel (down 1.7 per cent y-o-y), community and personal service (down 1.8 per cent) and machinery operators and drivers (down 1.2 per cent). The WGEA also shows an increase in the number of organisations that had a recruitment gender equality strategy in place in 2017, up by 6.2 per cent y-o-y, while employers who had a gender equality strategy in place (not specifically recruitment) increased by 7.6 per cent on-year in 2017.

The sectors with the largest gender pay gap favouring men, according to the WGEA, are financial and insurance services (pay gap of 31.9 per cent), real estate services (31.4 per cent), construction (27.4 per cent) and science and technology (25.4 per cent).

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