Women in the workforce: An analysis of global business sectors

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Across the globe, there is mounting pressure to increase female representation on boards. The associated public debate is now examining whether female executives being pulled into board positions may create a vacuum for female representation at executive and management levels of a company[1]. This has the potential to become dangerous if organisations view board representation in isolation to broader workplace diversity.

This problem has been acknowledged in Australia with reporting initiatives including WGEA (Workplace Gender Equality Agency) reporting[2] and ASX Corporate Governance Guidelines[3] requiring companies to disclose female representation across the different levels of board, executive, management and total workforce. On a global level gender diversity reporting is framed through the GRI guidelines.[4]

In response to the increased focus on gender equality in the workplace and on a day where many of us seek to #pressforprogress on International Women’s Day 2018, we have compared the representation of women in the workplace across different business sectors with a global scope.

 

How is the Representation of Women in the Workplace Measured?

For this analysis we looked at three indicators to measure the representation of women in the workforce. These indicators, which form part of Vigeo Eiris’ Equitics methodology, allow for analysis of female representation across different levels of responsibility within a company. They are:

  • Percentage of women on the board: The total number of women on the board divided by the total number of shareholder-elected members (excluding employee representatives).
  • Percentage of women in management: Number of women holding any type of managerial position (including line-management) divided by the total number of employees holding a managerial position.
  • Percentage of women in the workforce: The number of women in the workforce divided by the total number of employees.

 

Methodology

For the purpose of this analysis we made use of the Vigeo Eiris ESG Impact Indicators database, which contains information on companies sitting across 40 different business sectors. We then used findings from the Australian Workplace Gender Equality Agency’s dataset,[5]  to select eight sectors from the list, which, based on industry analysis, demonstrated abnormally high or low figures for female indicators. The eight sectors selected were:

  • Building Materials
  • Electric Gas and Utilities
  • Health Care Equipment and Services
  • Heavy Construction
  • Insurance
  • Mining and Minerals
  • Software and Information Technology
  • Transport and Logistics

The average percentage of women in the workforce, on the board and in the total workforce were calculated for each of these sectors. Of the eight sectors analysed, six sectors yielded interesting variations and trends, which have been included in this report.

Analysis for this snapshot has been conducted with complete data from calendar year 2016 up to and including reports for 30 June 2017.[6]

 

Women in the Workforce – Progression through the Talent Pipeline

The increasing acknowledgement that board representation alone does not tell the full story of how a company performs when it comes to gender equity, has prompted investors and commentators to take a deeper look into the available data.

Our query of the Vigeo Eiris database revealed three trends on a sector level. We found:

  • Female dominated workforces with under representation in both management and on the board.
  • Low female workforce participation coupled with even lower female representation in management and on the board.
  • Low female workforce participation coupled with more consistent representation across all variables.

It should be noted that not all companies choose to report on the involvement of women in the workplace. Therefore, only data points where information for the entire global workforce was available were considered in this analysis. As a result, these figures could be positively skewed, as companies with greater workplace gender equality are considered more likely to report on these indicators.

 

Trend 1: Female Dominated Workplace with Under-Representation in Management and on the Board

CAER Women in the workforce: An analysis of global business sectors

Figure 1 Percentage of women in workforce, management and board for health care and insurance sector companies (2016)

 

Both the Health Care Equipment and Services and Insurance sectors have a high proportion of female participation in the total workforce. However, this trend was not observed in the proportion of managerial positions nor in the gender of the board of directors. Although it is positive to see female workforce participation rates in excess of 60% in these sectors, the underrepresentation in management (less than 36%) and on the board (less than 24%) is a significant issue.

While these particular sectors are performing better than others analysed in terms of the overall percentage of females in the workforce companies operating within these sectors will need to address the issues that may be keeping women from progressing along the talent pipeline into management or onto the board[7].

 

Trend 2: A Low Female Workplace Participation and even lower Representation in Management and on the Board

CAER Women in the workforce: An analysis of global business sectors

Figure 2 Percentage of women in the workforce, management and on the board for construction and building material sector companies (2016)

 

Female employees in Heavy Construction and Building Materials represent only 22% and 17% of the total workforce for each of these sectors respectively. Like the pattern seen in the Health Care and Equipment Services and the Insurance Sectors, the rates of female participation in management and on the board is even lower. Less than 15% of the managerial positions in each sector are occupied by women with less than 10% of women on the board.

These results indicate a severe under representation of women in the overall workforce as well as the presence of barriers in the career pipeline preventing women from progressing to management and board positions. The data shows a similar pattern to the findings of the Women in the Workplace Study 2017, which shows a low and decreasing representation throughout the corporate pipeline.[8]

 

Trend 3: Low Female Workforce Participation but with more Consistent Representation across all Variables

CAER Women in the workforce: An analysis of global business sectors

Figure 3 Percentage of women in the workforce, management and board for mining and metals and transport and logistics sector companies

 

Both the Mining & Metals and Transport & Logistics sectors have an unequal representation of women in the workforce (15% and 26% respectively). However, these sectors are achieving a more consistent percentage of women across the workforce, management and the board.

The next step for these sectors is to promote the overall participation of women in their workforces and to maintain an equitable representation in their management and on their boards.

 

Conclusion

The three trends identified among the business sectors clearly demonstrate that there is room for improvement when it comes to the representation of women in the global workplace. The data also reveals that initiatives and conversations regarding gender imbalances need to be company and sector specific.

According to the analysis:

  • The first trend: high female workforce participation coupled with low representation in management and on boards, hints at the ‘classic’ glass-ceiling scenario. To combat this, companies need to focus on mechanisms that will allow for equal representation of women on boards and in management.
  • The second trend saw a low workforce participation coupled with low female representation in management and on boards. Companies need to implement a broader suite of workplace initiatives that address the gender imbalance across the entire corporate pipeline.
  • The third trend identified, low female workforce participation overall but equal proportionate representation of women across each workforce, management and on boards, requires attention to promote the overall participation of women in the workforce. Continued monitoring of the talent pipeline is also necessary to ensure equal representation of women at all levels.

The next step in this research would be to combine our analysis with trend data to inform a view of specific company performance. Investors can make use of ESG analysis to gain a better understanding of corporate strategies to address diversity in workforces such as commitments and approaches to non-discrimination, and specific means allocated to such actions. This provides additional insight for investors as well as demonstrates the use of ESG data as a powerful tool that can inform long-term, sustainable, corporate value.

 

InternationalWomensDay(Stacked)

This report has been published in celebration of International Women’s Day 2018

 

Related Reading:

#MeToo: Gender on the Agenda

Gender diversity in corporate senior management: glass ceiling yet to be cracked

 

Interested in discussing any of these issues further? Feel free to get in touch.

 

[1] Tess Ingram, Australian Financial Review, 07 April 2017, available online: http://www.afr.com/leadership/company-culture/fortescues-elizabeth-gaines-says-board-diversity-push-creates-a-csuite-vacuum-20170406-gvf3p5

[2] Report – About the legislation – Reporting requirements, WGEA Website, accessed 07 March 2018: https://www.wgea.gov.au/about-legislation/reporting-requirements

[3] ASX Corporate Governance Principles and Recommendations, 3rd Edition, ASX Corporate Governance Council, p11, available online: http://www.asx.com.au/documents/asx-compliance/cgc-principles-and-recommendations-3rd-edn.pdf

[4] Standards – GRI 405: Diversity and Equal opportunity, GRI Website, accessed 07 March 2018: https://www.globalreporting.org/standards/gri-standards-download-center/gri-405-diversity-and-equal-opportunity/

[5] Workplace Gender Equality Agency, Women in the Workforce: by industry, July 2013: https://www.wgea.gov.au/sites/default/files/2013-07-25%20-%20Women%20in%20the%20workforce%20by%20industry_FINAL_0.pdf

[6] Data for 2016 includes data points reported for financial years ending in July 2016 up to and including the financial year ending 30 June 2017. ‘Complete data’ means that data across all three indicators examined is available.

[7] Tess Ingram, Australian Financial Review, 07 April 2017, available online: http://www.afr.com/leadership/company-culture/fortescues-elizabeth-gaines-says-board-diversity-push-creates-a-csuite-vacuum-20170406-gvf3p5

[8] McKinsey&Company, Women in the Workplace 2017, accessed 07 March 2018: https://womenintheworkplace.com/

CAER Team

Author: CAER Team