IPWEAQ UPDATES
WHY IS IT SO DIFFICULT FOR ORGANISATIONS TO IMPROVE GENDER DIVERSITY?
Jessica Kahl
Even with present day evidence substantiating how a gender-diverse workforce enables greater innovation, productivity and profitability, progress has been slow (Hunt, Dixon-Fyle, Prince, & Dolan, 2020). So, what makes diversity so hard to achieve in the workplace despite extensive policies and motivated leadership? According to a classic economics lesson, “the bad economist sees only what immediately strikes the eye; the good economist also looks beyond” (Hazlitt, 2010, p. 12). This same advice applies when economic theories appear to contradict conventional wisdom. If gender diversity in the workforce is to be wholly addressed, we need to look beyond current corporate efforts and economic rationale. There are now more collegeeducated women than men in the workforce than ever before (WGEA, 2021). Yet, despite women obtaining more bachelor’s degrees than men, major hurdles to close the gender pay gap still exist (Hughes, 2021). A major contributor to the pay gap is labour market wage differentials, as average remuneration in
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Figure 1 Decomposition of the aggregate gender gap (Kleven, Landais, & Søgaard, 2018).
female-dominated organisations continues to remain lower than those in male-dominated organisations (WGEA, 2019). Unequal pay is also driven by explicit and subtle effects of gender bias in the workplace, which significantly impacts the proportion of women in maledominated professions (WGEA, 2019). While a reduction in occupational segregation can perhaps lessen the gap for fields such as engineering, where the earning potential is significantly higher than most, women’s rationalisation for remaining in lower-paying female-dominated fields may hold true (Mace, 2011). With conventional wisdom pointing towards stigma and discrimination as root causes, rational economics suggests there is more credible evidence for why organisations are not leveraging diversity as a competitive advantage (Mace, 2011).
ENGINEERING FOR PUBLIC WORKS | SEPT 2021
Basic economics teaches us that participants behave rationally by weighing up the costs and benefits of actions to choose the option which maximises utility, satisfaction, and budget. Assuming women are rational economic participants with full knowledge of opportunity costs, the incremental improvement we’re seeing suggests there’s more to women’s progress than meets the eye when looking at how organisations support equality (Gregory & Duncan, 2015). Strong evidence suggests that inequality of wages outcomes results from disparities in maternity leave, and not enough leave being available (Kliff, 2018). According to the Workplace Gender Equality Agency, the availability of paid parental leave and the equal division of unpaid care improves work-life balance, gender equality and women’s workforce participation
