Horizons: global trends in employment law Edition 1:
Women in Work
In the first edition of Horizons, Diane Gilhooley, global practice head of the human resources and pensions group at Eversheds Sutherland, gives her analysis of gender equality in businesses around the globe – and explains why the issue needs a top-level strategic response.
Shifting ground for businesses
Shifting ground for businesses
As we have seen in 2018, the next high-profile public exposé is never more than an unexpected tweet away. Businesses are now subject to an ever-increasing level of public scrutiny, facilitated by an always-on, 24/7 news cycle, amplified by social media-fuelled empowerment of the individual. The resulting series of social campaigns has stoked public awareness on a global scale and created an unforgiving environment for employers.
The ground is shifting under the feet of businesses, with boundaries between employers, workers and the public in a state of flux. These changes are compounded by generational shifts in culture, a war for talent, increasing demand for corporate transparency and rising customer and government expectations.
One example illustrating the dynamics of this new landscape is the #MeToo campaign against sexual harassment. The campaign, which started last autumn, has been googled in almost every country on the planet. The scandals unfolding on the back of #MeToo have led to a new scrutiny of individuals and the companies they represent. It has also led to greater focus on equality in a work environment in the broadest sense.
As a vehicle for victims to speak out, #MeToo has sparked a revolution; the Time’s Up Legal Defense Fund, raised in response to #MeToo, has already received more than 2,700 requests for assistance, across nearly every state in the US. On the other side of the Atlantic, a government inquiry into sexual harassment in the workplace has resulted in the suggestion of a mandatory duty on employers to take steps to protect workers from harassment and victimisation, with a breach of such a duty constituting an unlawful act and subject to enforcement action from the Equalities and Human Rights Commission (EHRC).
Amidst these growing pressures, businesses have often appeared flat-footed in response, promoting even further scrutiny from the public and officials. However, the likely impact on future policy and government intervention is significant.
To avoid growing risks around brand, reputation and future talent shortages, businesses are facing pressure to get more women into work – particularly into skilled and senior jobs – close gender pay gaps and create inclusive workplaces. Regulation is playing its part, with new equality reporting duties, targets and related measures being implemented in different jurisdictions.
Managing new expectations requires a comprehensive look at a range of issues if there is to be a real change in culture. Whilst some businesses are comfortable that their diversity records stand up to this new level of scrutiny and expectation, others are not – or can’t be sure.
This article takes a look at gender developments in a global context, alongside a summary of the clear business risks that organisations face by not tackling these challenges. We also include our observations on how these complex issues are affecting organisations in different countries and continents across the globe, with specific examples and input from our international employment team.
Gender developments in a global context
According to OECD research, women are more likely to work on a part-time basis, are less likely to advance to management positions, are more likely to face discrimination, and to earn less than men. The research notes that gender gaps tend to increase with age, reflecting the role that parenthood plays in gender equality – motherhood typically having negative effects on workforce participation, pay and career advancement.
Since 2013, about two thirds of OECD member countries have put in place new gender pay policies involving greater transparency, with companies increasingly required to analyse and disclose their gender wage gaps. Many countries have also introduced measures to encourage fathers to take parental leave.
Meanwhile, a recent Harris survey of US employers found that a third have taken new steps to combat sexual misconduct (Reuters), although the majority reminded employees about existing training or policies.
We know that employers cannot fix the workplace gender challenge on their own. At its roots are social, cultural and economic pressures that influence the educational and employment paths that men and women follow. Governments and the public must play a significant role if change is to happen. Societal pressures also differ by country, demanding a nuanced approach by global employers. However, expectations are growing that businesses will play their part.
Business risks of not acting
Not acting to improve gender equality exposes businesses to reputational, legal and financial risks. These risks have existed for years, but tipping points are fast being reached, and what was acceptable then may not be now. Some employers are being caught off-guard with potentially serious repercussions. The effects of ever increasing media scrutiny have already been felt in the UK, with a growing trend of exposés that have highlighted individual employers as they were forced to disclose their gender pay gaps for the first time.
The use of non-disclosure agreements (NDAs) for allegations of gender discrimination and harassment is another recent example. The #MeToo campaign emboldened some workers to speak out, some breaching their confidential settlement agreements and, in the process, generating a public backlash against their use. Now, the use of NDAs in such situations presents new risks. High-profile NDA cases in the US led to changes in the tax laws relating to payments made under these NDAs. Use of NDAs has also led to allegations that employers prefer to suppress gender diversity challenges than to make improvements.
An effective employer response will typically require more than reminding employees of existing HR policies. Companies whose top management regard inclusion as a competitive advantage, an enabler of growth and as a core part of their organisations’ culture and brand are most likely to succeed (MSCI), particularly as demand for talent intensifies.
Key takeaways for Businesses
- The link between diversity and corporate performance is becoming better understood and is expected to result in increasing investor demands.
- While societal issues affecting female workplace participation differ by country, there are consistent themes driving gender inequality across employers globally.
- These include: a lack of women in senior positions; the impact of motherhood and unpaid caring roles on female pay and advancement; too few women pursuing more lucrative science and technical careers; and the global gender wage gap.
- Addressing such corporate gender inequality issues, particularly where they are substantial, requires strategic engagement from the top, not simply a new HR policy. This is because the causes are often complex, they typically require funding to address, consistent prioritisation to overcome and there is no overnight fix.
- Some businesses are already making great strides in this area, introducing innovative programmes, publicly setting gender equality targets, reporting on their progress and holding the senior management team to account.