International Women’s Day is Sunday, March 8, and there’s a lot that female professionals ought to be proud of. For one, there are more women starting their own businesses—and succeeding. From 2007 to 2018, the number of women-owned businesses increased by 58%. They’re also highly profitable: A recent Boston Consulting Group Report reported that if men and women were treated equally as entrepreneurs, global GDP would rise by 3% and boost the global economy by $2.5 trillion. In fact, women consistently score higher than their male counterparts in most leadership skills. And when it comes to getting a seat at the table, women are seeing a higher level of representation than ever before. According to research from Grant Thorton, 29% of senior management roles were held by women last year—the highest number ever on record.
But despite this progress, they continue to lag behind when compared to their male counterparts. Women make up 44% of the overall S&P 500 labor force and 36% of first- or mid-level officials and managers at those organizations. Yet they make up only 25% of executive- and senior-level management. What’s more, women hold only 20% of board seats and account for just 6% of CEOs.
This imbalance isn’t new. For years, women have lacked representation at the highest levels. That’s especially true for women of color, who make up only 3.5% of board rooms for the S&P 1500. So why do these inequalities persist? More often than not, the challenges that women face can be linked to the "broken rung," a term that refers to companies’ failure to empower women in entry-level roles to grow into management positions. Fixing it is a necessary step toward achieving equality. According to a report from Lean In and McKinsey & Company, if women are promoted to first-time managers at the same rate as men, there will be one million more women in corporate management positions over the next five years.
Luckily, organizations are already equipped with the tools they need to turn this goal into a reality.
Communicate D&I Goals and Get Internal Stakeholders On Board
When you’re hiring for any position—and especially entry- and mid-level ones—it’s important to set clear goals for diversity and inclusion. Employees who hold more junior positions will eventually be qualified to move into managerial roles—and they’ll be looking for opportunities to do just that. LinkedIn reports that 94% of individuals would stay at a company longer if the organization invested in their careers. As a result, ensuring your candidate pool contains more women from the get-go is crucial if you want to see more of them land in leadership spots.
Once you develop a diverse hiring strategy, communicate it internally to members of the HR team and to C-suite decision-makers. Make the case for recruiting more women at all levels so you can receive buy-in from all internal stakeholders and gain access to resources that will enable you to recruit most effectively.
After you hire and onboard employees, pay close attention to how they’re adjusting to their roles. Meet with associates early on and talk to them about their career goals, ensuring they have access to the same opportunities as their colleagues from the moment they begin working.
Many career growth opportunities stem from internal networking activities. And while some employees will make connections at work naturally, others may be a bit more reluctant to build bonds with colleagues. It’s also a gendered issue: Men often benefit more from networking activities at work, and sometimes these activities are centered around a "bro" culture that doesn’t always welcome women.
Luckily, there are other ways to foster mentorship. For example, an employee-mentor program can empower female associates and early managers to build relationships with their senior colleagues. These programs not only provide women an opportunity to make meaningful professional connections within your organization, they also give them the opportunity to ask questions and gain new skills.
Establish Clear and Consistent Evaluation Criteria
At many companies, the promotion process can seem rather opaque. This lack of transparency is often frustrating for employees—especially those working hard to get to the next level. To ensure all workers have an equal opportunity to move up, focus on establishing evaluation criteria for managers to follow when making promotion decisions. This approach not only helps managers, it also offers employees greater visibility into the process and gives workers the tools they need to reach their potential—regardless of gender.
Require Managers to Participate in Unconscious Bias Trainings
Offering managers guidance around how to evaluate employees certainly contributes to a more just promotion structure, but fixing the systematic problem of the "broken rung" will require your HR department to challenge managers on how they hire, fire and promote employees. That starts with evaluating their own inherent biases—and taking steps to ensure those preferences don’t impact their employees’ growth and development.
Managing unconscious bias is easier said than done. That’s because all humans have preconceived notions—even if they don’t necessarily act upon those judgments.
The scientific explanation for unconscious bias is simple: The brain can consciously process 40 pieces of content per second, while it can unconsciously process 11 million pieces of content. We do a lot of thinking that we’re not aware of, meaning we often come to certain conclusions without realizing it.
One of the most common examples of unconscious bias is gender bias. When women are strong and assertive, they are often perceived as "aggressive" while men with the same qualities are seen as confident. As a result, a female employee who demonstrates these attributes might be passed up for a promotion because of their gender, due to a manager’s unconscious bias.
Knowing how to spot these fixed assumptions is critical to building and maintaining a more diverse workforce and fixing the "broken rung." Start by incorporating unconscious bias training into your L&D efforts and educating managers on how to minimize their own judgments.
Helping women move up the corporate ladder will likely require planning, communication and, in some cases, changes in policy and structure. If you’re an HR manager working to bridge the gender gap at your organization, you certainly have your work cut out for you. But with the right strategy and resources, you can empower more women to reach their full professional potential.
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A New Poseidon Adventure: Flipping Succession Planning Upside Down
Organizations make significant investments in efforts to hire the right candidates – the people who have the right experience and cultural fit. By carefully managing the performance and potential of these people over time, the organization can grow its leadership pipeline, keep a steady inventory of needed skills and competencies and remain nimble in the face of change (which we have plenty of all around us these day) – all of which can have serious impact on the bottom line. However, much of this pie-in-the-sky stuff relies on being able to locate and cultivate high-potential and high-performing talent across the board. Without an integrated succession management solution, recognizing and developing talent can be an ever-elusive process. The questions we are seeing asked today include: does the traditional top-down approach to succession management still make enough of a difference? Does managing succession for a slim strata of senior executives take full advantage of the kinds of talent data we now have at our fingertips? It doesn’t have to be so. Succession management can be an interactive process between senior leadership, managers and employees at all levels of the organization. And, if we trust them, we can actually let employees become active participants in their own career development. (Shudder.) Career Management (Succession Planning Flipped Upside Down) This "bottom-up" approach is gaining momentum because who better to tell us about employee career path preferences than employees themselves. Organizations actually have talent management and other HR systems in place that allow for collecting and analyzing a whole slew of data around: Career history Career preferences Mobility preferences Professional and special skills Education achieved Competency ratings Performance scores Goal achievement Training and certifications Etc. In short, pretty much everything we’d want to know to make well-informed succession planning and talent pooling decisions. For some, the leap is simply putting some power into the employee’s hands. The talent management system of 2011 is capable of displaying a clear internal career path for employees and then, on the basis of all that data bulleted out above, showing a "Readiness Gap" – what do you need to do to make the step to the next level? And if your talent management environment comes armed with a real Learning Management System, you can take it to the next level with a dynamically generated development plan that gets the employee on the right path to actually closing those gaps. Faster development, faster mobility. Organizations that seriously favor internal mobility don’t just make employees stick on pre-defined career paths – they can search for ANY job in the company and check their Readiness levels. I might be in accounting today, but what I really want to do is move to marketing. Giving employees the chance to explore various career avenues within the organization helps assure that "water finds its level" – that is, that the right people with the right skills and the right levels of motivation and engagement find the right job roles internally. Employee participation is key, but make no mistake – managers play an important role in this interactive process. They must be prepared to provide career coaching, identify development opportunities and recommend employees for job openings. The candid discussions require that employees have open access to information so they can best understand the criteria necessary to move to the next level. A Two-Way Street Employee-driven career management is just one tool. The more traditional top-down approach to succession management remains indispensable. But organizations that value talent mobility and the ability to be able to shift and mobilize talent resources quickly will find that attention to career pathing can be vital. For employees, of course, the impacts are immediate and include boosted levels of engagement, higher retention, increased productivity and more.
The Hidden Costs of Ignoring Your Talent Management Strategy
Building and maintaining a successful company hinges on having the right people to execute projects and drive results. People, we hear time and again, are your company's most valuable asset. But their success — and HR's ability to recruit, engage and retain them — depends on HR pros who are strategic decision-makers, armed with the proper tools to let them excel at their jobs. Modern HR professionals manage much more than payroll and benefits. But their technology tools, in many cases, haven't evolved past basic productivity software like email or Microsoft Word. HR simply can't be strategic with old-school tools that reduce people to statistics and give little insight into what the numbers mean. Emails and spreadsheets were not designed to deliver meaningful insights into people's performance, suggest when employees should be promoted or highlight skills gaps in a company. For that, HR needs a broader, more strategic set of talent management tools, which lets professionals manage every aspect of the workforce, from training and performance reviews to collaboration and succession planning. Yet, research shows that less than 25% of companies use a unified, holistic approach to their talent management. The Real Costs of "Doing Nothing" As a Talent Management Strategy The critical relationship between business strategy and HR strategy too often gets overlooked by senior leadership. While it may seem like the company is saving money by managing recruiting, training, performance and succession via manual and paper-based processes, in reality it’s costing your business more than you know. For example: Without a talent management strategy, a company with 2,000 employees is losing almost $2 million every year in preventable turnover alone. Businesses that don’t invest in learning suffer from decreased employee performance and engagement to such a degree that they can expect to realize less than half the median revenue per employee. That’s a direct impact on the business. In employee performance management, organizations without a focused strategy waste up to 34 days each year managing underperformers and realize lower net income. To learn more about the business impact of talent management and how to start building out your strategy, check out the eBook Why Your Nonexistent Talent Management Strategy is Costing You Money (And How to Fix It) and register for the March 19th webinar, Building the Business Case for Talent Management.
The Return of the Moderate Merit Budget – Wreaking Havoc on Pay for Performance
With the economy now on steadier ground, most organizations have returned to administering a merit budget to the pre-recession levels of 3 to 3.5%. In the years immediately following the economic downturn, many merit budgets were eliminated entirely or were reduced significantly and reserved for a select segment of the employee population. Pay for performance has become a necessity for many organizations that are expected to accomplish more with fewer resources. I often get asked: "How can I truly award my top performers with such a limited budget? Should I do so at the expense of my ’Meets Expectations’ performers? What if I need to retain my ’Meets Expectations’ performers and giving them 0% to 2% increase puts me at great risk for turnover? But if I don’t recognize my top performers, don’t I risk losing them...?" These are difficult questions to answer, however you can determine the best solution for your organization by considering the following: Are your employees paid at market pay levels? Is your organization’s performance management process mature? Does your organization have other compensation programs in place to reward top performers (e.g. variable pay)? Market Pay If turnover is a concern, and your organization needs to maintain ’bench strength’ in order to achieve its strategic objectives, your biggest priority should be to ensure that you are paying your employees at market pay levels. Why? Historically, as the labor market strengthens, organizations become vulnerable in terms of losing people. Hiring and onboarding replacement talent is not only costly to the organization, but can also cause dissension among existing employees since new hires may be getting paid more. Be sure to stay abreast of market pay levels and trends, and use the merit budget to correct disparities. Performance Management Process Organizations vary significantly in terms of the maturity of their performance management process. Closely examine your organization’s process and look for ways to improve it. If there is a perception that one management team is an ’easier grader’ than the others, the process is inherently flawed and any pay for performance program will not be viewed as credible and fair by employees. A good place to start is to get a calibration process in place and communicate broad guidelines on expected distribution ratings. Variable Pay Programs Variable pay programs (e.g. bonuses) have become increasingly more popular across all industries and career levels. These programs provide the opportunity for employees to share in the organization’s success while not adding to fixed payroll costs. Some plans have an individual performance component which can be a very effective means to recognize top performers. However, in order for this type of program to be successful, individual goals and targets must be well documented and communicated. Again, this is largely based on the maturity of the organization’s performance management process which takes time to evolve. What are the best steps to avoid wreaking havoc on your pay for performance process? First ensure your pay levels are keeping pace with the market Continue to evolve your performance programs with calibration among managers and a rigorous goal setting process Promote variable pay plans to reward high performers without adding to fixed pay roll costs It’s not always an easy journey but, in the end, it’s best to use a measured approach that is based on business needs and a realistic assessment of your current programs and processes.