Gender quotas in the workplace - the argument goes on
Gender Quotas in the Workplace - the argument goes on
We can all agree that having more CEOs named “Peter” in the UK’s FTSE 100 companies than there are female CEOs is unacceptable. In the US, replace “Peter” with the name “Michael” or “James” and you have the same outcome.
What the business world is less agreed on is how to rectify this yawning inequality.
Progress has been glacial. In 2016 there were 27 female CEOs in the Fortune 500 list. By 2021 that had risen to 41. Whilst moving in the right direction, that’s an average of 2.8 female appointees per year. To get to absolute parity would take another 82 years (and that’s assuming that openings will be consistently available year on year).
This issue isn’t just for those in the C-suite; lack of sufficient female representation across all levels of management is a persistent problem for companies globally.
For years, the idea of quotas in the workplace has been touted as the obvious solution and then retracted for all manner of reasons. On the surface it seems like a very straightforward solve – agree on the ratio of women to men in a given workplace and then appoint enough women into that workplace to close the gap. Yet it takes very little time for this single line of theory to dissolve into a morass of complications. We take a look at the pro’s and the cons, and how to navigate a reasonable path through the quandary.
What are gender quotas? A quick note on terminology
A gender quota is an assigned and agreed number (often measured by percentage ratio) of how many male to female workers there are in a workplace. That percentage can be applied to the workplace as a whole, split out across departments and seniorities, and measured geographically. Quotas can be applied to any industry as well as being used for political representation or rolled up to give a figure for overall national gender equality.
Quotas can be legally mandated or voluntary (more on this below)
The term “quota” is often used interchangeably with “target” or “benchmark” but these words shouldn’t be used as synonyms. “Target” has an aspirational quality to it which suggests that a company isn’t where it would like to be – yet – but that it is trying. “Benchmark” is comparative which means that you’re only looking to your peers to gauge your performance; it gives no real perspective as to where a company ought to be, only a snapshot of where it is relative to the rest of its field.
A quota is an absolute term with an obligation that it should be met – it comes with much less leeway than either a target or benchmark.
What about the gender pay gap?
No discussion of gender quotas can sidestep the issue of the gender pay gap.
The gender pay gap is the difference in the average gross hourly wage of all men and women across a workforce (within a company or nationwide). This is not the same as unequal pay, which is an outright difference in the wage of men and women for performing the same work; unequal pay has been illegal in the UK since the Equality Act of 2010.
The driving force between the gender pay gap is the lack of women in senior positions – given that men are two to three times more likely to occupy executive positions with higher pay, that will naturally skew the overall male to female pay in an organisation, even if on paper that organisation has a 50-50 workforce.
The gender pay gap is the complex result of many things including longstanding sexist barriers, maternity leave and the caring responsibilities assigned to women and a persistently divided workforce; women are still more likely to work in lower-paid and lower-skilled jobs – probably as a result of the above reasons.
Whilst ensuring access and opportunity to higher paid executive roles will not automatically erase the gender pay gap, and it certainly isn’t a quick fix, it will remove a formidable obstacle to eventual parity.
The current quota situation
There is no international consensus on whether quotas should be introduced at a national level, or how they should be structured – reflecting just how controversial quotas can be.
For example, Norway introduced a legal quota of 40% executive/board directors be women back in 2004. France implemented legally binding gender quotas in 2011, for companies of more than 500 employees and revenues above 50 million Euros to have a minimum of 20 per cent female representation on their boards of directors, which rose to 40 per cent in 2014. Failure to comply incurs voided appointments to the board and or financial penalties.
The UK on the other hand has a “soft” voluntary ratio of at least 25 per cent female representation on FTSE100 boards as recommended by the Davies Report of 2011, increased in 2015 to 33 per cent in 2015. FTSE250 companies were also advised to achieve this by 2020.
Other significant western economies including Denmark and the US have no quotas, voluntary or”soft”, at all.
There has been a library full of research into whether such gender quotas really work. Statistically, they do – the European Institute for Gender Equality reported in 2021 that across six quota-based European countries (Belgium, Germany, France, Italy, Austria and Portugal) the average share of women on boards is 37.6 %. In European countries without quotas, the share of women on boards is 24.3 %. Progress of sorts, but across Europe as a whole, fewer than 1 in 10 board chairs is a woman. It is also difficult to measure whether quotas have any meaningful impact at other, less conspicuous, levels of a business and whether the improved statistics reflect any broader scale cultural shift.
Given the inconclusive evidence and surrounding controversy, it’s worth looking more closely at the pros and cons…
Arguments for
At its most basic, the argument for quotas is that it will make for fair representation in the workplace for both men and women – something everyone can (surely) agree, is the right thing. Proponents also argue that given the “speed” of progress so far, anything to increase the pace of change can only be to the good.
Expanding the argument further, a key part of the pro-quota argument is that quotas will not be needed forever. The theory goes that once we have a critical mass of female representation in the workplace, the door will stay open to consistently fair, representative employment opportunities and the need for quotas will naturally remove itself.
Addressing the issue of whether such quotas undermine the meritocratic process of recruitment, Rainbow Murray, associate professor of politics, Queen Mary University of London argued “that quotas undermin(ing) meritocracy is a smokescreen. At present, we do not have meritocracy as men benefit from an unfair advantage, gaining access based on their gender rather than merit. When quotas break this gender bias, they actually enhance meritocracy, forcing companies to choose the best person, not just the best man.”
A quota for women (plural) also removes the idea that keeping a seat for “a woman” ensures representation for an all-embracing category of “woman” – quotas provide representation of women as a cross section of society rather than as a single homogenous whole. Better for the company and far better for any single women who might find herself as the single token female.
The ‘for’ argument also makes the case that quotas make business sense as a more balanced gender division gives a better range of opinions, view points and competencies – all of which enable a company to think more creatively and therefore perform better.
Arguments against
There are as many arguments against gender quotas as there are for. Whilst some are rooted in old school misogyny, which we needn’t rehash here, many are compellingly articulated and come from the very people they are designed to help – the female work force.
Bronwyn Bishop, former Speaker of the House for the Australian government summed up the counter argument forcefully in a 2021 interview when she said that “gender quotas make women permanent second class citizens”. Her point being that with quotas, women will only ever be there as part of a numbers exercise rather than as qualified, experienced participants appointed on the basis of merit.
Quotas become an effective way to tokenise women, but not actually represent them.
Closely related to this is the very real backlash that comes with quotas. Workforces react poorly when they see employees being recruited or promoted in what they see as an unfair system – removed from qualifications and based on a ‘box ticking’ exercise. It can be demoralising and have a negative effect on productivity or employee engagement.
Perhaps the most damaging argument is that quotas simply do not work. As mentioned above, the EIGA reporting suggests that a quota might work in a very specific way (board level for example) but that it cannot engender a broader cultural change. As Ruth Sealy, associate professor of organisation studies, Exeter University Business School, “we do not know how we define success: are we seeking descriptive change, meaning increasing the number of women, or substantive change, in other words changing the corporate culture?” Giving a number to work towards too often obviates the discussion we need to have about wholesale cultural shifts towards more inclusive employment practices and opportunities.
A way through?
At ESGmark® we believe that policy has to work on a company by company basis – ‘one-size-fits-all’ policy rarely works. That said, we also firmly believe in gender equality at all levels of the work force.
Some of our members are in countries with legally mandated gender quotas (at least at senior levels) and some are in countries with either ‘soft’ quotas or nothing at all.
Where a quota is required then we can say nothing other than that the law must be followed and we imagine there is a wealth of brilliantly qualified women ready for the job!
Where quotas are absent, again we’ll reiterate that we believe in gender parity. An equal work force isn’t a quick fix but it’s not an impossible solve.
Implement your own quota – with SMART goals. Whilst you can’t immediately jump to a 50-50 split, you need to ensure you have a timetable to work to and a strategy to get you there.
Review your work force now. Different departments will likely have different gender splits so conduct a review of your workforce as it stands at day one – as quotas are a data-based measurement, you need a baseline against which to measure progress and make sure you’re getting your recruitment right.
Consider blind recruiting at CV selection. A simple way to remove unconscious bias at CV selection stage is to remove all names from the applicants.
Job shares. Women still carry out the lion’s share of caring responsibility in the home and that comes with a heavy time burden. Where you have a role that truly needs full time attention, you could consider making it a job share – allowing two highly qualified but time-poor women the opportunity to work with you.
This subject remains far from concluded. Whilst we have sought to find a reasonable, useful pathway through the research around this, the argument remains very noisy.
As a team, we read far and wide into the issue and have yet to come up with a definitive stance – neither, it seems, do most people. A quick, non-scientific, non-exhaustive selection of the articles and research we read around this includes:
“Gender Quotas: Problem or Solution”
“25 Major Pros and Cons of Gender Quotas”
“Gender quota in the boardroom: are we (really) better off without it?”
And very concisely from the FT “are gender quotas needed?”
We welcome all our members’ and readers’ thoughts on this as peer-to-peer learning is a key part of the ESGmark® - please get in touch with any comments you have on the subject or key learnings you would like to share.
We also offer guidance and advice for organisations looking to improve the gender ratios of their workforce. Please contact us here.