The double bind of sexism

Sexism is a cultural challenge that is entrenched in many Australian businesses. It is completely counterproductive, as many businesses are currently struggling to attract and retain talented people in a very competitive market.

Women outnumber men in Australia and have high workforce participation rates. The Australian Bureau of Statistics regularly calculates the sex ratio – which measures how many males there are per 100 females. In the most recent reporting period, Sydney and Melbourne’s wealthiest urban areas were shown to have some of the country’s highest proportions of women – with 94 men for every 100 women in North Sydney and Melbourne’s inner south.

Sexism can be overt behaviour by individuals, or embedded in the cultural assumptions and work practices of a business. Whether or not you directly spot it occurring in a workplace, you can certainly measure the outcomes it produces.

2012 Australian Census of Women in Leadership
2012 Australian Census of Women in Leadership
Female Executives within ASX 500 companies

The 2012 Australian Census of Women in Leadership report shows that a mere 9.2% of key management executives at ASX500 companies are women. This compares with 14% for US Fortune 500 companies, and 19% for companies in the New Zealand NZSX100. The ASX500 companies with the highest proportions of female executives are in pharmaceuticals, telecommunications, retail, and transport.

The disparity in achievement within the public sector is striking, with women comprising 35% of all directors across government boards at a federal level. 56% of ASX500 companies have no women at all on their board of directors, and 63% of ASX500 companies do not have any women in key executive roles.

It is quite clear that few Australian businesses are seriously addressing the sexism embedded in their workplace cultures.

One of the most interesting recent academic reports into the underlying factors causing the gender “glass ceiling” was published by Terrance Fitzsimmons from the University of Queensland Business School, titled “Do Australia’s top male and female CEOs differ in how they made it to the top?”. Drawing upon the results of a large number of previous academic studies, Fitzsimmons outlines the “double bind”, a core dilemma faced by female leaders who make it to a position of power.

In a nutshell, female leaders are viewed negatively by their direct reports when they are consultative, and also when they are assertive. In contrast, male leaders are perceived as more competent when exhibiting exactly the same behaviours. These perceptions can be seen played out in the daily media reporting of the federal election battle between Julia Gillard and Tony Abbott.

In response to the failure of the business community to improve female participation at leadership levels, some commentators have started openly demanding legally enforceable gender quotas for businesses. While binding targets are not likely to be introduced by any Australian government in the short term, the federal government have introduced several measures to combat workplace sexism and gender discrimination, with the most noticeable being the Workplace Gender Equality Act 2012. The main thrust of this federal legislation is to promote transparency, equal opportunity and equal pay in the workplace.

Workplace culture has a very significant effect on employee productivity, innovation, and retention. The entire organisation can greatly benefit from a culture that is more cohesive, flexible, and diverse. It is also crucial to remember that women are not the only people facing discrimination when applying for promotions within a business. People with disabilities, members of the LGBTI and Indigenous communities, and even older workers face very serious prejudice in recruitment processes.

Workforce recruitment and retention programs within many ASX500 companies are clearly failing. Business leaders need to lead by example, immediately speak out against sexism when it occurs, and take personal steps to ensure they hire, mentor, and promote a diverse range of people within their teams.

Managing wage risk

In a now almost ritualised gnashing of teeth, business lobbyists descended again on Canberra last week to hear the results of their latest efforts to influence the Fair Work Australia minimum wage determination.

A quick read of the report makes it clear that Fair Work Australia is really quite unsympathetic to demands for corporate welfare. It is hard to imagine a more scathing dissection of the demands put forward by the retail and hospitality industries.

Responding to the report, the Australian Retailers Association and the Australian Hotels Association, effectively declared war, claiming that the new minimum hourly pay rate of $15.96 will drive their industries out of business. It does however seem quite ironic that industry lobbyists are paid to talk down the people they represent, painting them as an economic basket case.

Unfortunately for retailers, Fair Work crunched the latest ABS figures, finding no link between wage rates and the widely documented structural change being forced upon Australian retailers by the Internet. Solid profits in the hospitality sector certainly didn’t add credibility to their demand for special treatment.

Choosing different battle tactics, the ACCI announced that they were disappointed that the wage increase wasn’t smaller, taking the opportunity to remind us all that the carbon tax will smash Australian businesses in 2012. Perhaps the well funded lobbyists at the ACCI have uncovered some new meaning in some ancient Mayan prophecies.

In Australian cities, market rates apply for wages. In an era of full employment, offering the minimum wage to attract skilled labour is laughable. The minimum wage is a mirage.

There are many specialist job roles which already struggle to fill positions even when wages are offered well above market rates. In these situations lengthy expensive searches for skilled migrant workers are required, using contentious 457 visa arrangements.

Adopting a rock bottom wages strategy not only limits your ability to fill a vacant position quickly, it is a poor strategy to choose when building a productive workforce.

It is also worth considering how productive your employees will be if they are struggling to feed their families and pay basic bills. The Fair Work report details the reality of the minimum wage, indicating that government welfare and tax concessions already provide a significant portion of the income received for people on the minimum rate. Without that subsidy, market pressure on wages would be higher.

On an economy wide basis, one of the most interesting observations in the Fair Work report is the changing balance between corporate profits and wages income within the economy.

Across the entire economy in December 2011, total income from wages was 53.1% of all income, while corporate profit was 28.5%. In 2001, the corresponding figures were 54.6% for wages and 25% for corporate profit.

Perhaps this simply reflects improved productivity, but it could also be due to the popularity of outsourced labour arrangements. Using these strategies to reduce wage costs does create some major new business risks, as has been seen recently by the construction and mining industries, which rely heavily on workforce “subcontract” arrangements.

The sudden collapse of the Hastie Group is an example, as the firm was a key skilled workforce supplier to many large organisations. The unexpected collapse left their clients without specialist workers, leading to a desperate scramble by their clients to directly hire Hastie employees.

Recent events have also shown that the structuring of outsourcing arrangements is also coming under more government scrutiny. The legal costs faced by Coles are likely to end up dwarfing the pittance they saved by outsourcing trolley collection at a few stores in Adelaide.

Leaders should consider carefully how they balance productivity and wage expenses, and the levels of operational risk they are willing to take to reduce wages expense. Outsourcing and subcontracting arrangements can greatly improve your workforce flexibility, but savings can quickly evaporate when skills are in short supply.