How to increase the proportion of women in management in the long term. What can businesses do to boost the proportion of women in management positions in the long term? – New legal gender quotas in Germany make the question more relevant to companies than ever. hkp.com spoke to hkp/// group experts Leon Jacob and Laura Hohmann.
Why should companies try to increase the proportion of women in top positions?
Leon Jacob: The issue of increasing the proportion of women in specialist and management positions has a long history in Germany. But the numbers are clear: In DAX 30 companies, only about 9% of Board seats and 11% of upper management positions are currently held by women. With a few exceptions, the proportion of women in specialist and management positions is still far too low in the German economy.
New legislation on the equal participation of women and men in leadership positions, passed in March 2015, explicitly calls for an increase in the proportion of women.
Laura Hohmann: From January 1, 2016, around a 100 listed firms with codetermination will have to meet the fixed minimum gender quota of 30% women on their supervisory board. In addition, approximately 3,500 firms that are listed on the stock exchange and/or in which at least one-third of the members of the supervisory board are elected by employees must meet the new “flexi-quota” from September 2015 onwards.
What does the flexi-quota exactly mean?
Leon Jacob: The flexi-quota means that companies have to set targets for their supervisory board, their management board and the two management levels below board level to reach at least the quota of 30% women in those positions. Afterwards the quota has to be maintained at this level.
What measures can companies implement in the short term to achieve the fixed minimum quota and the flexi-quota?
Laura Hohmann: First of all, we advise companies to communicate the new requirements of the minimum and the flexi-quota in detail to the affected staff and company bodies. Subsequently, companies should analyze their status-quo to identify specific need for action as well as measures to increase the proportion of women in relevant positions.
How can firms identify the right strategies for increasing the proportion of women?
Leon Jacob: In order to identify potential for increasing the proportion of women in relevant positions, companies should rely on constant monitoring. This means that the proportion of women should be used as a key performance indicator along the entire employee lifecycle – from recruiting to exit.
Laura Hohmann: Firms can also analyze responses to staff surveys to identify further hints: Are there any systematic differences between the answers provided by men and by women? Exit interviews are another source of useful information, and are a great opportunity for specifically asking women regarding the existing problems of female specialist or management careers in the organization.
Once companies have identified fields of action, what typical medium- and long-term steps can they take to boost the proportion of women?
Laura Hohmann: The measures that are taken need to be tailored to the previously identified fields of action. However, the key question is: How can more women be promoted into vacant positions? One possible measure is long-term succession planning. Companies that already keep an eye on highly-qualified female candidates on the basis of target quotas during succession planning, are much better prepared for when vacancies arise.
Leon Jacob: It is important that female candidates do not solely stand on succession lists but are genuinely considered for filling vacancies. To ensure this, a clearly defined process managed by HR needs to be implemented that helps to better place highly-qualified female candidates.
How important is the issue of visibility of female candidates in companies?
Laura Hohmann: We believe that companies often neglect the topic of visibility and presence. Therefore, in addition to the measures above, firms should ensure that female candidates have access to platforms such as networking events. Since at the end of the day, it is typically the line management that makes placement decisions and not only the HR department.
How can companies prepare female candidates for potential succession?
Leon Jacob: We recommend companies to customize development measures for each female successor. This is the only way to achieve the desired effects. Apart from traditional training offerings, mentoring programs are very promising since experienced executives can provide individual support and help to prepare for common challenges.
In your view, what are the key success factors for the project “gender quota”?
Laura Hohmann: Our experience shows that gender diversity as well as other diversity issues have to be integrated into corporate values and culture. The entire organization needs to support the increase in the proportion of women - from the board to each and every employee.
Leon Jacob: Ultimately, it is not just about meeting quotas, but about promoting diversity: The ultimate goal is to fully use all potential within the company. Organizations that put certain groups of employees at a disadvantage, whether intentionally or otherwise, will find it difficult to achieve their goals in the future.
Mr. Jacob, Mrs. Hohmann, thank you very much for these interesting insights!
Ownership and employee engagement are the key objectives of equity-based compensation for companies worldwide, according to the recent Global Equity Insights Survey from the management consultancy hkp/// group.