In light of so much discussion around gender politics and a well-documented pay gap, you would think that there would be unanimous outrage at what is not only evidence of clear inequality, but a scourge that will undermine competitive advantage if not addressed.
Incredibly, this is not the case. In fact, while many companies pay lip service to “doing the right thing,” a certain complacency permeates around gender pay and even culture that helps maintain the status quo.
We recently gathered insights from over 1,000 financial services employees to get a better understanding of how they felt about their corporate culture and how that might affect pay, recruitment and promotions for men and women. We were surprised by the results. While data from Pew Research shows that American women are systematically underpaid, our survey revealed that most FSI employees believe it’s employee merit that drives decision making.
Perhaps this is a reflection of loyalty or belief in one’s company values. Many employees can’t believe that their company would behave unethically — intentionally or not. I am skeptical, though. I believe it reflects the problematic nature of corporate culture. Culture is by definition something that is difficult to quantify. And if you can’t quantify it, how do you acknowledge it, let alone fix it?
While our research focused on financial services, many organizations struggle to adapt their business practices to accommodate changing legal and cultural norms. Gender pay was an important discussion topic at the World Economic Forum this year. Unnerving stories across various market sectors, ranging from technology and law to entertainment, have revealed the pernicious hold inequity has — for women but also for people of color. Yet, communities are more prosperous when women are paid fairly and when parental leave is not punished. Why? Because women account for half of the global labor supply and about 70% of the world’s consumption demand. And companies that are diverse and gender-balanced tend to be more innovative and competitive — and will better reflect your customer base, too.
In Questback’s research, assertiveness, competitiveness, and confidence were given premium value over qualities like empathy and compassion. Of course, both men and women can demonstrate a spectrum of traits, but organizations and leaders tend to reward men for their assertiveness and competitiveness, whereas women are often questioned or demoted for being ambitious. The result is that men are more likely to be recruited, promoted and rewarded. It also highlights that when men are disproportionately responsible for pay decisions, they often unconsciously recruit and reward employees “in their own image” rather than seek out or promote employees who exhibit different qualities and who may offer complementary skills like collaboration and communication. Without diverse approaches to problem-solving, companies won’t be prepared for future workplace trends — whether it be remote teams or blending artificial intelligence with human workforces.
I believe this is a moral issue, one that I take very much to heart with my own team. We challenge ourselves repeatedly to root out our own biases and regularly seek feedback on ways we can identify systemic problems and improve. Continuous listening, training, radical transparency, mentoring and sponsorship are just some of the strategies that can help pave that journey of continuous improvement.
But for me, it is not just trying to do what is fair: it is quite simply a profitability issue too. Complacency is a killer for a company. You will not survive if you don’t have a variety of experiences, skill sets, and backgrounds at the table. This is as true for gender as it is for diversity. To show empathy and understanding for all your customers, you can’t operate with a monolithic mindset. More leaders need to recognize this competitive advantage and recruit, promote and pay their diverse workforce fairly.
The good news is that all hope is not lost. We are seeing companies take ownership of the problem. Citi was widely praised by Arjuna Capital for its transparency on gender pay. Smaller banks in the U.K. are showing some positive gains with respect to gender pay. The more that financial services and insurance companies report and measure pay, the more competitive and profitable they will be long-term. And the more that companies take a hard look at their culture and understand the unconscious bias that may be looming under the surface, the more likely they can successfully promote more women to senior positions, attract and retain more talent and ultimately grow their bottom line. Now is not the time to shy away. It’s time to lead, step up to the challenge and fix the issue in your company. Don’t just mind the gap — close it!