The need for gender equality

As governments dither and companies prevaricate over far-reaching efforts to radically overhaul inherited imbalances in gender representation in the economy, employers might well be brooding over a potential 26% windfall to global GDP over the next ten years. In round numbers, that’s a massive $12 trillion boost.¹

At a time of rising inequality, mounting joblessness and escalating social conflict – in short, a seriously malfunctioning economy – evidence suggests that the failure to transform a moral imperative into an economic one, head-on, may soon turn some of our greatest potential into a missed opportunity.

A compelling argument for ensuring that women are better integrated into the workforce comes from McKinsey’s 2015 study, The Power of Parity, a global assessment of the economic consequences of gender equality.

According to initial data, sub-Saharan Africa alone could generate 39% of global GDP today and add as much as 27% to GDP ($700 billion) if women participated in the workforce to the same extent as men. Numbers such as these provide a powerful case for linking gender equality in society with gender equality at work.²

Evidence has shown that the empowerment of women with financial and economic resources and with decision-making agency has impacted positively, not only on the well-being of women themselves, but on the well-being of their children. […] The empowerment of women with decisionmaking responsibility and power holds the promise of impacting positively on household expenditure, thus potentially realising the concomitant benefits of investments in human capital and family-type public goods.³

Combine arguments such as these with dramatic shifts in the demand for skills brought about by the Fourth Industrial Revolution, and the full force of the case for gender equality in the workplace starts to make an impact.

In our 2017 edition of Benefits Barometer, we argued that automation, artificial intelligence and machine learning will replace those jobs characterised by rules-based tasks. By contrast, what will be in demand are people who can demonstrate those all-too-human skills that machines have yet to replicate. Figure 3.6.1, which is based on David Autor’s work at Massachusetts Institute of Technology (MIT), maps out what those future skills demands could look like.

The first two columns list tasks that can be automated. The third column lists tasks that machines simply cannot model as yet.

Translating this into a list of skills that will be in demand for the future looks something like this:

Now let’s compare that list with an interesting list that appeared in a book called The Androgynous Manager.⁶ This was the book that convinced my Japanese boss at the time (the 1980s) that he needed to hire a white American woman to help with their global strategic planning. At this point, Japanese companies were leading the world in innovation and market domination.

What this book argued was that if companies wanted to maximise their effectiveness and competitiveness then they would do best to build up a team that integrated the thought processes, emotional intelligence and social skills of both men and women. The book identified certain constructive and destructive characteristics of each, as set out in Figure 3.6.3.

Although we now recognise these ‘characteristics’ are, for the most part, gender stereotypes (sometimes enacted because of social expectations assigned to men and women), this book was ahead of its time in that it introduced the concept of diversity in the workplace – particularly, diversity in gender. The world is moving away from a gender-binary view (male or female) to one where people can self-identify in any number of ways. Excluding anyone from the workforce on the basis of gender, however it is expressed, will simply perpetuate a system that will not serve us well in the age of the Fourth Industrial Revolution.

When Helena Morrissey published her book, A Good Time to be a Girl,⁷ she argued that disruption appears to be cutting a broad swathe across everything from traditional power structures, the changing nature of leadership, the future of employment and political engagements. Gender balance and diversity are seen as important parts of the solution. Morrissey argues:

We need to re-engineer our collective thinking and that means involving more women or incorporating more ‘feminine traits’. Men can also have feminine traits – but this is about why we need to move on from the macho-command-and-control regime if we are going to meet the growing demands of the future world of work […] We talk blithely of ‘disruption’ in business – when revenue streams built of decades can be grabbed by start-ups over a matter of months, if not weeks – but few seem to have grasped that this extends to power structures too.⁸

And that’s the all-important point. Whoever leads the gender equality effort – and, for the moment at least, that’s employers – will have to confront profound matters of skills, institutional culture and affirmative action. That discussion has already begun. The gender opportunity has fuelled a debate about the role of women in financial decisionmaking. A recent edition of the Collective Insight publication suggests that, globally, women will increasingly dominate financial decision-making. Much of this will be due to the fact that they simply live longer than men. But they are also playing an increasingly larger role in economic production.⁹

These insights raise the questions: What happens next, and why?

We turn first to the performance of women in the South African context before discussing the underlying problems and way forward.

Lesson

The ‘Martha Effect’

The potential value of women to the South African economy was set out in a working paper by Nic Spaull and Hendrik van Broekhuizen, ‘The “Martha Effect”: The compounding female advantage in South African higher education’.¹⁰ They found that:

• In South Africa (as in most parts of the world), girls are streets ahead of boys academically.
• By Grade 4, girls are a full academic year ahead of boys in learning and by Grade 5 they are 40% ahead of boys in maths.

These superior results continue into high school and university. It turns out that women are at a distinct advantage, even though they start on an equal footing at the start of the educational process. The study controlled for factors such as race, age, socio-economic status, home province and institutions attended. This was what it found at tertiary education level:

• 27% more women than men qualified for university
• 34% more enrolled in university
• 56% more completed their undergraduate education
• 66% more attained a bachelor’s degree

Out of the 19 fields of study examined, it appears that women are more likely to choose to specialise in 12 of those fields. Five fields were identified as being less likely to produce degreed women candidates. But this is not due to lower completion rates – it’s simply that women don’t tend to enter those areas.

In all fields, women are 20% less likely to drop out than men.

The study suggests one reason we may be seeing these results is that ‘girls have better non-cognitive skills such as self-control, selfmotivation, dependability, sociability, perceptions of self-worth, locus of control, time preference and delayed gratification’. There are other arguments that suggest the school system tends to reward the kind of ‘good behaviour’ that girls exhibit. Perhaps a bigger story we may be missing is that the education system as a whole is not developing the right skill sets for the workplace.

Van Broekhuizen and Spaull argue that the long-term effects of the global female advantage at school are likely to become more acute over time, particularly as the premium for higher education seems to be growing as we move to a knowledge-based economy. More importantly, this trend should have important implications for how society as a whole evolves. We need to start giving far more thought to that point.

They end their study with this particularly telling quote: The quiet revolution of women’s roles, as Claudia Goldin (2006) calls it, is arguably a close rival to new technologies in terms of the seismic aftershocks touching directly and indirectly, all major social institutions. And like its rivals, it has not yet come to full maturation. Incomplete revolutions tend to be associated with major disequilibria.¹¹

How well are we doing?

The reality is that we’ve made little progress in capitalising on what we know about the performance of women academically and in the workplace. In fact, research from McKinsey, Mercer and Grant Thornton12 suggests we are actually going backwards – both globally and in South Africa.

Women in work

Let’s look at the facts for South Africa:

• Women in South Africa get paid 15% to 17% less than men for the exact same work.¹³
• Only 28% of the senior management roles available are held by women (Grant Thornton claim that’s only a 2% increase from the start of their research 13 years ago, and even that minute increase might just be due to sampling variations). This is somewhat better than the global average of 25% but lower than the best regions, such as Eastern Europe, at 38%.¹⁴
• One-third of South African companies have no women in management at all (again, at 31%, this is slightly better than the global average of 34%; however, in Eastern Europe only 9% of companies have no women in senior management).
• The number of women CEOs in South Africa increased from 7% in 2015 to 10% in 2017. The common senior roles women tend to hold are in human resources and finance.
• In the public sector, women make up 40.5% of senior management of state-owned enterprises and have a 42.3% representation in parliament. The private sector has lagged woefully.

According to Grant Thornton, one of the factors that seems to be distracting management’s attention from gender equality is compliance with B-BBEE targets. This seems to be the natural by-product of the fact that B-BBEE targets are legislated. There are no legislated quotas for women in the workplace in South Africa, which is perhaps understandable given the higher imperative for transformation.¹⁵

Mercer’s 2017 update on its ongoing study for the World Economic Forum (WEF), When Women Thrive, Businesses Thrive, paints an even bleaker picture of regression globally. Not only are organisations failing to build effective pipelines for future female talent, but slow (or no) changes in hiring, promotion and retention rates means that, at the current rate of change, the economic gender gap will not be closed for another 170 years – 52 years longer than projected in the WEF’s 2015 report.¹⁶

Meeting the challenges presented by the Fourth Industrial Revolution compounds the problem. Many women are currently employed in traditionally ‘female’ jobs that will be vulnerable to automation – office administrators, call centre agents and cashiers, for example. Office administration, to take one example, is expected to lose roughly 10 times the number of jobs as those areas expected to see the highest job creation. Moreover, three of the five high-growth job categories – management, computers and maths, and architecture and engineering – are under-represented by women today and are unlikely to provide much opportunity for women in the near term.

Mercer’s When Women Thrive: Financial Services Perspective, released in October 2016, pointed out that financial services organisations are increasingly hiring more men than women at almost every level of the organisation. This will clearly widen the representation gap even further. Financial services companies also appear to be promoting more men at every level of the organisation, while women executives are exiting at a higher rate – and at substantially higher rates than they are being hired. If left unchanged, these talent flows (hiring, promotions and retention) will decrease women’s representation at the top of organisations from 15% to 12% by 2025.¹⁷

Oliver Wyman’s 2016 report, Women in Financial Services, came to similar conclusions. It analysed 381 financial services organisations globally, including South Africa, and found that, at the current rate of progress, executive committees in the industry globally will reach 30% women representation in 2046. The low representation of women on executive committees is a particular problem, because this is where key strategic decisions are made.¹⁸

Confronting the problem

What’s remarkable from the data and insights is: Do we truly understand what causes women to shift from being ahead of men academically to being behind in terms of compensation and job opportunities?

Outdated social norms may be at the heart of the gender gap

Research on gender equality in South Africa is extensive and unequivocal. If gender inequality may be embedded in corporate policy and processes in relation to human capital management, it persists because it is also implicitly, and often explicitly, entrenched in the broader cultural mores, in government policies and the interpersonal relationships of our lives.19

Cass Sunstein defines social norms as attitudes of approval or disapproval, held by a specific society, that specify what should or shouldn’t be done at any given time.²⁰ Sunstein is of the view that there are social norms about every aspect of human behaviour and we can never escape them. When we behave in ways that are inconsistent with social norms, we may suffer public disapproval or social ostracism. Social norms are therefore both enabling and constraining, as they determine what is appropriate behaviour in a given situation.²¹

Since organisations are social structures, they are characterised by social norms. According to Jon Elster,the workplace is a hotbed for norm-guided behaviour because many norms tend to be role-specific.²² For instance, there are norms associated with being a doctor, lawyer, teacher, student, friend, wife, husband, junior employee and senior employee.

In 2017, researchers from Bain & Company conducted a comprehensive study among professionally employed men and women in South Africa to understand the personal, societal and organisational factors that hinder women’s progress in the workplace. The study provides evidence that the problem is not at a personal level for women but may be at a societal and organisational level, highlighting potentially outdated social norms that work against women in the workplace.

The researchers discovered that there is no difference in the confidence levels and aspirations of men and women when they start out their careers. Both men and women believe they can reach top management. Table 3.6.1. compares the confidence levels of women and men at different levels in an organisation.

According to the study, both men and women believe in gender equality in the workplace – but for different reasons. Common reasons given for this belief were ‘moral imperative’ and ‘business legislation’. Only 20% of men and 21.5% of women gave ‘business imperative’ as their reason. Among executives, the ‘business imperative’ reason was chosen by 38% of women and 24% of men. Since business environments are supposedly rational and driven by economics and performance, it is important to articulate the link between representation by women at senior levels and stronger business performance, as this will motivate appropriate action to increase representation by women in the workplace.²⁴

Figure 3.6.5, adapted from the Bain & Company study on the state of gender equality in South Africa, identifies the extent to which these different dynamics can affect women in the workplace from a societal, organisational and personal perspective.

The study showed that societal factors mattered more when it came to regulating the behaviour of women. For instance, 58% of women agreed that their communities believe in equal opportunities for men and women, while 63% agreed that the men they have close relationships with have no problem with a woman earning more than a man. The women who stated they do not aspire to senior leadership positions were three times more likely to agree that their families did not believe in equal opportunities between men and women.

This suggests that beliefs held by societies where women came from, in particular immediate family, have a strong influence on women’s aspirations.²⁶

Organisational factors such as culture and poor workplace experience were also found to be barriers to the advancement of women. The study found that, in general, women did not feel they were part of the organisation in the same way that men do. And the higher up they went in the organisation, the more politics there were to be navigated. The ability to navigate these organisational politics makes a difference between moving to the next level in the organisation and staying stagnant. Social norms about relationships between men and women may also be behind the limited sponsorship and mentorship of women by men.

Some studies advocate for creating formal structures at the workplace to expose women to mentors. However, these structures have sometimes been found to be ineffective because the relationship is unnatural and too formal. Other studies suggest that a further problem with mentorship programmes is that they reinforce the notion that to succeed, only women need to emulate the existing norm. Clearly this defeats the whole value of introducing a different voice or perspective.²⁷ For this reason, the best programmes are ones that promote a dialogue, where both parties can learn from each other.

The Bain & Company study also shows that men tend to be part of a social network in the organisation that gives them opportunities to be exposed to senior leadership. These networks tend to exclude women, as they are arranged around typically male interests, such as certain sports. With the norms of senior people in the organisation biased towards men, women are not exposed to potential opportunities for career growth through these social channels of networking.

The way forward

What needs to be done to move the needle?

If there’s one lesson to be learned from the research to date, it’s that getting traction will require a multipronged approach. As social norms have been identified as one of the main barriers to advancing women to critical decision-making levels, it is recommended that existing, limiting social norms are challenged and refreshed. These could be confronted at a national, community and workplace level. We put forward some suggestions for this approach at these different levels.

The macro system: policymakers
Other than the Employment Equity Act (No. 55 of 1998), which seeks to address workplace diversity and inclusion broadly, there are few clear and deliberate nationwide initiatives that seek to address gender-role stereotyping in society at large and in the workplace specifically. However the, South African government has recognised the need to focus on women’s issues, as indicated by the creation of the Minister of Women in the Presidency portfolio.

The mandate for the ministry, as defined on its website, is as follows:

To ensure that women’s socio-economic empowerment and women’s rights are mainstreamed across all sectors of society through: monitoring the extent to which the social and economic circumstances of women are significantly improved; promoting, advocating for and monitoring women’s empowerment and gender equality; promoting the understanding of differential circumstances of women and men in society, and the impact of seemingly neutral decisions, plans, laws, policies and practices on either gender through capacity building on gender mainstreaming and responsive gender budgeting; and facilitating and monitoring capacity building and skills development for women to participate meaningfully in all areas of the economy and the workplace.²⁸

Yet, there are no programmes listed on the website that the ministry has either completed or is currently engaging with to advance this mandate. In order to change this, conversations about women’s development and emancipation have to move from intention to practical implementation, led by visionary policymakers.

The mesosystem: communities
Programmes aimed at changing social norms are often anchored in communicating how widely held social norms limit the collective community and society at large. Communication programmes based on social norms theory could be initiated to foster more progressive norms about women leadership. Social norms theory predicts that overestimating problem behaviours will increase the problem, while underestimating problem behaviours will discourage people from engaging in them.²⁹ Communication initiatives must therefore show how women leadership is beneficial for households, communities, businesses and the economy.

Lessons could be learned from programmes such as those run by Soul City, a social change organisation established in 1992 when South Africa was fighting the scourge of HIV Aids. Soul City runs numerous programmes to educate people on health matters. It successfully conveyed messages against HIV-related stigma, while driving HIV prevention. A similar programme aimed at debunking gender stereotypes, delivered through various channels in the community, could help to drive the message of equal gender roles and an equal society.

The microsystem: employers
Employers are in a good position to drive effective societal programmes because people from all walks of life congregate at the workplace. Employers stand to gain the most financially from having a diverse and inclusive leadership team. Women have been shown to be generally more socially adept and collaborative in their approach to work than men.

There is absolutely no question that women will, by necessity, play an important role in a world where disruptive business models are changing the whole way we engage with with our clients and with other people in the workplace.

Employers will need to foster a deliberate culture that values women’s input in all decision-making processes to a point where everyone, particularly men, sees it as unusual and unproductive if there are no women in workplace gatherings.

The microsystem: employees
Psychologists have studied in detail the phenomenon of ‘nature versus nurture’ in influencing individual behaviour and have concluded that nurture often trumps nature.

Very few people have the ability to overcome their social surroundings, so changing their environment is often a good way to start changing individual behaviour. Individual employees could make changes in their personal circles of influence at home. For instance, women could hold frank conversations with the men in their lives, and understand what it is they themselves want in exchange for advancing to positions of authority. Some women may believe that men should make a bigger financial contribution to the household, yet at the same time argue for equal pay for equal work, and equal opportunities for men and women at the workplace. These beliefs suggest incongruent expectations, possibly an indication of transitioning from one set of social norms to another. As much as we are progressing and forging new gender norms, we are often romantic about the roles modelled by our parents as we were growing up.

What we need is a new social compact that clarifies how men and women should relate to facilitate reciprocal partnerships. Widespread negative workplace experiences, such as the sexual harassment of women, which often goes unreported, or unpunished if reported (as cited in the Bain & Company study) are some of the indications that there is a need to challenge the power relations between men and women. Achieving this requires men to change attitudes and behaviours that entrench current norms.

‘You’re not out for an equal slice of the cake as it stands today, you’re out to change the recipe.’³⁰

As Helen Morrissey puts it:

We cannot expect to make progress by simply layering diversity initiatives on top of long-established attitudes and practices. Creating an inclusive workplace means just that – it’s not about excluding anyone. The aim is not to get back to where we started only now with women dominating.³¹

Towards an action plan for the workplace

So how do we get an action plan up and running for the workplace? Morrissey’s work in launching the highly successful 30% Club in the UK, gives us some key take-home points. The 30% club was so named because the view was that to change a social narrative, 30% of the people in the room needed to share the new vision. Morrissey’s strategy was to get the top CEOs in the country on board, then use peer persuasion to shame other CEOs into joining. It worked perhaps better than many other initiatives. But her focus was to try to get these CEO to take an honest and probing look at their efforts to date.

• Did their strategies around gender equality and diversity sit outside their strategic planning initiatives, unconnected and unintegrated?
• Had they done proper audits to determine where current policies might inadvertently be creating bottlenecks?
• Were their initiatives aimed at changing the whole workplace or just targeted at encouraging women to integrate better? Were they genuinely open to an agile and flexible work environment that can accommodate diversity requirements?
• Did they put their smartest people into HR and were they reporting directly to the CEO?
• How well did recruitment reflect the commitment to diversity? This is not about finding the people who think the most like senior management but deliberately seeking out people who are different.

Success is dependent on your people believing that the future can be better than the present, and that you have the power to make it so.

For us at Alexander Forbes, the starting point will be to become a part of the Bain research initiative to better address the problem in the workplace. We believe that the more companies there are that can be party to this research, the quicker we will be able to identify viable solutions.

References 

1, 2: McKinsey Global Institute. 2015. The Power of Parity: How Advancing Women’s Equality Can Add $12 Trillion to Global Growth, September 2015 (online).
3 Booysen, F & Guvuriro, S. 2017. Gender dynamics in intra-household financial decision-making: An application of Mahalanobis metric matching, biennial conference of the Economic Society of South Africa, Grahamstown, 30 August–September 2017 (conference paper).
4 Mercer. 2017. When Women Thrive, Businesses Thrive, 2017 update (online).
5 World Economic Forum. 2016. The Future of Jobs, Global Challenge Insight Report, January 2016 (online).
6 Sargent, AG. 1979. The Androgynous Manager, MCB University Press Ltd (book).
7, 8: Morrissey, H. 2018. A Good Time to be a Girl, HarperCollins UK (book).
9 Botha, E. 2017. It’s still a man’s world, Collective Insight: finweek, 19 October 2017 (magazine).
10, 11: Van Broekhuizen, H & Spaull, 2017. The ‘Martha Effect’: The compounding female advantage in South African higher education, Stellenbosch Economic Working Papers: WP14/2017, Department of Economics, University of Stellenbosch, November 2017 (online).
12 Grant Thornton. 2017. Women in Business: New Perspectives on Risk and Reward, Grant Thornton 2017 Women in Business Report, March 2017 (online).
13 Van Broekhuizen & Spaull (2017).
14 Levine, B. Moldavskaya, Xiong, K. & Doherty, J. 2017. Global Gender Pay Equity, An Examination of Gaps outside the US: What is the state of pay difference, what drives such differences and what can we do to close the gaps? (online)
15 Grant Thornton (2017).
16 Mercer. 2017. When Women Thrive, Businesses Thrive, 2017 update (online).
17 Mercer. 2016. When Women Thrive: Financial Services Perspective, October 2016 (online).
18 Oliver Wyman. 2016. Women in Financial Services (online).
19 Fajardo, C & Erasmus, M. 2017. Gender (Dis)parity in South Africa: Addressing the Heart of the Matter, 24 May 2017, Bain & Company (online).
20, 21: Sunstein, C. 1996. Social norms and social roles, Program in Law and Economics Working Paper No. 36, 1996 (online).
22 Elster, J. 1994. Rationality, Emotions, and Social Norms, Kluwer Academic Publishers, Dordrecht, The Netherlands (book).
23, 24: Fajardo & Erasmus (2017).
25, 26: Fajardo & Erasmus (2017).
27 Morrissey (2018).
28 Department of Women website, documents page (www.women.gov.za), 27 July 2018.
29 Elster (1994).
30, 31: Morrissey (2018).