2015 PRELIMINARY WHEN WOMEN THRIVE RESEARCH FINDINGS: A .
#WHENWOMENTHRIVE2015 PRELIMINARYWHEN WOMEN THRIVERESEARCH FINDINGS:A EUROPEANPERSPECTIVEThis preliminary research findingspaper was produced for discussionat Mercer’s 2nd Annual When WomenThrive Signature Event, takingplace in Brussels, Belgium, on 10November. The content is basedon initial analysis of our 2015 globalresearch findings, with particularfocus on Europe. Together withEDGE Certified Foundation, Mercerwill release the full global report inJanuary 2016.
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WHEN WOMEN THRIVEPRELIMINARY RESEARCH FINDINGS:A EUROPEAN PERSPECTIVEABOUT MERCERMercer is a global consulting leader in talent, health, retirement, andinvestments. Mercer helps clients around the world advance the health, wealth,and performance of their most vital asset — their people. Mercer’s more than20,000 employees are based in more than 40 countries and the firm operates inover 130 countries.Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE:MMC), a global professional services firm offering clients advice and solutionsin the areas of risk, strategy and people. With 57,000 employees worldwide andannual revenue exceeding 13 billion, Marsh & McLennan Companies is also theparent company of Marsh, a leader in insurance broking and risk management; GuyCarpenter, a leader in providing risk and reinsurance intermediary services; andOliver Wyman, a leader in management consulting. For more information, visitwww.mercer.com. Follow Mercer on Twitter @Mercer.R E S E A R C H S U R V E Y C O N D U C T E D I N C O L L A B O R AT I O NW I T H E D G E C E R T I F I E D F O U N D AT I O NEDGE is the only global assessment methodology and business certificationstandard for gender equality. The EDGE assessment methodology was developedby the EDGE Certified Foundation and launched at the World Economic Forum in2011. EDGE Certification has been designed to help companies not only createan optimal workplace for women and men but also benefit from it. EDGE standsfor Economic Dividends for Gender Equality and is distinguished by its rigourand focus on business impact. The methodology uses a business, rather thantheoretical, approach that incorporates benchmarking, metrics, and accountabilityinto the process. It assesses policies, practices, and numbers across five areasof analysis: equal pay for equivalent work; recruitment and promotion; leadershipdevelopment training and mentoring; flexible working; and company culture.EDGE Certification has received the endorsement of business, government, andacademic leaders from around the world.1
2015 WHEN WOMEN THRIVE RESEARCH FINDINGS: FOCUS ON EUROPET H E E U R O P E A N I M P E R AT I V E F O R C H A N G EEqual treatment for women and men is a founding principle of the EuropeanUnion. However, much can be done to move the needle further on genderequality. Europe continues to see a lack of women at the most senior levels andon executive boards, a steady decline in the representation rates of women ascareer levels rise within organisations, and a stubbornly persistent genderpay gap.A number of significant developments are helping shape a renewed focus ongender equality in the EU: The ageing demographic in Europe. The economic drive for growth and competitiveness through harnessingall available talent. Stronger corporate governance requirements, particularly in relationto gender diversity. Greater transparency for companies in relation to equality and diversity. The persistent gender pay gap and practices that discriminate against women.Before we turn to details of our most recent When Women Thrive research, webriefly review these contextual factors for Europe, in turn.AGEING DEMOGRAPHICEurope faces severe demographic ageing. As a consequence, the working-agepopulation is shrinking and dependency rates will increase. According to theEU, in just five years, 75% of Europe’s population of 20–64 year olds (up from68% today) will need to be employed in order to mitigate the current trends anddeliver a modest economic growth rate of 1%–2%.1 Although a critical source oftalent to meet this objective will be women, there is notable risk that an ageingworkforce might actually lead female participation rates to decline as womenleave the workforce to provide care for the elderly. Peschner J. “The EU’s Growth Potential Vis-à-Vis a Shrinking Workforce”, available athttp://www.oecd.org/els/mig/Peschner.pdf. (Associated Working Paper available athttp://ec.europa.eu/social/main.jsp?langId en&catId 89&newsId 1970&furtherNews yes.)12MERCER
ECONOMIC DRIVE FOR GROWTH ANDCOMPETITIVENESSThe low employment rate of womenin the EU (63.5%) as compared tomen (75%) represents a waste ofresources for the EU economy. Arecent estimate shows that thegender employment gap costs 325billion euros annually.2 Furthermore,the Organisation for Economic Cooperation and Development (OECD)recently projected the EU gain fromfull convergence in participation ratesbetween women and men to be 12.4%in per capita GDP by 2030.3CORPORATE GOVERNANCEAlthough the regulatory and reportinglandscape differs from country tocountry, consolidation is increasing inthe EU, and we anticipate that theseregulations will only be strengthened inthe near future. Areas covered by suchrequirements include discriminationand, specifically, pay equity; quotas forthe most senior roles and for executiveboards; maternity and paternity leavestandards; and child care and flexibleworking considerations. Directive2014/95/EU requires companies todisclose information about diversity intheir board of directors.GREATER TRANSPARENCYNGOs, government agencies, andwatchdog groups have been exertingincreasing pressure to ensure thatorganisations have and uphold gooddiversity practices. Many organisationsare looking to get ahead of suchpressure, differentiate their brands,and ensure their access to diversetalent by voluntarily sharing informationon their practices and even theirgender representation rates; othershave, for example, sought out goodpractice certification from EDGECertified Foundation. Adding to thepressure is that business partnersrequire that vendors in their supplychain have appropriate policieson diversity.PERSISTENT GENDER PAY GAPEU member states have been slowto apply and enforce the equal payprinciple and the gender pay gapstill averages 16.4%.4 The pay gap forsalaried employees is higher still at31%, due in part to a high incidenceof female part-timers. Additionallyconcerning is that women in theEU receive on average 38.5% lessin pensions than men,5 because, inaddition to the gender pay gap, oftheir more frequent part-time statusand fewer years spent in employment.Much progress still can be madeas companies work to ensure thatwomen and men have equivalentaccess to senior, high-paying jobs and,furthermore, that those women andmen working in comparable roles arepaid equitably. uropean Commission (2015). “New Start to Address the Challenges of Work-Life Balance Faced byEWorking Families”, available at http://europa.eu/epic/news/2015/20150923-new-start en.htm.3.OECD (2012). Closing the Gender Gap: Act ined/index.php/Gender pay gap s-explained/index.php/Gender pay gap statistics2.3
2015 WHEN WOMEN THRIVE RESEARCH FINDINGS: FOCUS ON EUROPE4MERCER
OVERVIEW AND ABOUT THE SURVEYTo date, this effort has been remarkably successful,with 647 survey submissions over the past two years —500 new ones in 2015. The current database is thelargest of its kind, covering 3.2 million employees and1.3 million women.We intend to continue to extend thecoverage of our data and analysisthrough annual campaigns, and thesurvey will remain perpetually opengoing forward, for those interested injoining our community and for thosein need of benchmarks against whichto evaluate their own practices andset priorities. We will regularly analysethe data to provide critical insights toour clients and other organisationsdetermined to achieve both greatergender diversity in their workforcesand strong female representation intheir leadership.The When Women Thrive researchleverages Mercer’s proprietary,Internal Labour Market (ILM) frameworkand methodologies to examine thecurrent representation of womenacross levels of the corporatehierarchy, on a regional basis, andto forecast the likely changes insuch representation under differentscenarios. The research also collectsdata on organisational practices andcultural attributes that may drivesuccess in building representation.The research in 2014 identified certainof these practices and attributes asparticularly impactful — what we callthe key drivers of gender diversity.These drivers were established throughapplication of multivariate, statisticalmodels to help uncover causalrelationships. In constructing thesemodels, we drew on over 20 years ofexperience applying ILM Modelling inclient organisations to identify andmeasure the impact of human capitalmanagement on key talent dynamicsand workforce outcomes. We alsowant to acknowledge EDGE CertifiedFoundation, whose robust research ongender equality was leveraged to buildour platform.This paper was created for discussionat Mercer’s 2nd Annual When WomenThrive Signature Event, with a focus onEurope. This paper summarises currentand projected future representationof women in the workforce. It alsoreviews the state of organisations withregard to the key drivers of genderdiversity, both from a global and aEuropean perspective.5
2015 WHEN WOMEN THRIVE RESEARCH FINDINGS: FOCUS ON EUROPEPA R T I C I PA N T P R O F I L EOur consolidated research databaseincludes 647 unique survey submissionsfrom 583 organisations around theworld. Going into this second year ofresearch, we sought to expand oursurvey footprint, particularly inregions where we had limitedparticipation in 2014, such as Asia.To that end, we have: More than tripled the number ofsurvey submissions since 2014. Added 13 new countries to oursurvey sample and significantlyincreased the number of submissionsfrom Brazil, China, and Japan. Nearly doubled the number ofemployees covered in our workforcedata, from 1.7 million in 2014 toa current count of 3.2 millionemployees — 1.3 million of whomare women.To provide a comprehensive view ofthe state of gender diversity acrossorganisations globally and inventory thespecific policies and practices in placeto support women, we have combinedthe 2014 and 2015 survey submissions —taking the most recent submission fromthose organisations that participatedin both years — to create our currentdatabase. Results shared throughoutthis report are drawn from both wavesof study and will focus on differencesand similarities across five regions:Asia; Australia and New Zealand;Europe; Latin America; and the US andCanada. Information for a sixth region,Middle East and Africa, will be shownwherever sample sizes permit.Given the sizeable increase in surveysubmissions, the participant profilehas changed significantly since 2014,and that should be considered wheninterpreting differences from theprevious report.The participant profile shows detailsof our sample in each year and forour overall combined database, whichincludes the most recent submissionfor an organisation in a specificgeography. (See Figure 1.)6MERCER
Figure 1. Participant ProfilePA R T I C I PA N T P R O F I L E : R E G I O N20142015OVERALLDISTINCTRESPONSESUS and Canada68146201Latin America46116152Europe40106138Asia78794Australia and New Zealand172946Middle East and Africa01616PA R T I C I PA N T P R O F I L E : S E C T O ormation and Technology225372Energy164454All Others1983100PA R T I C I PA N T P R O F I L E : T O T A L R E V E N U ELess than 100 million20116135 100 million 500 million3689119 500 million 2.5 billion4587121 2.5 billion 10 billion3483114 10 billion or more369311973239No responsePA R T I C I PA N T P R O F I L E : T O T A L H E A D C O U N T S I Z E83240100–9992278971,000–4,999261011275,000 99254160100,000 or more197183No response92835178500647Less than 100Total survey submissions7
2015 WHEN WOMEN THRIVE RESEARCH FINDINGS: FOCUS ON EUROPEPRELIMINARY RESEARCH FINDINGSWITH A FOCUS ON EUROPEDevelopments in the last year favour improved futurerepresentation of women. With so much emphasis ongender equality, organisations appear to have improved ormaintained what were favourable promotion patterns andhave accelerated the hiring of women into senior levels.In particular, we see stark improvement in the US and Canada, where lower ratesof promotion for women across all career levels have been substantially overcome— at least at the highest levels. Is this due solely to differences in the populationof organisations covered? Apparently not. An examination of participants in both2014 and 2015 revealed that specific organisations have improved promotionrates for women into the executive ranks. These trends, if they can be sustainedover the next 10 years, would lead to significant improvements in femalerepresentation at the executive level in all of the regions examined. In Europe, wesee female representation at the Executive level increasing from 21% to 33%, animprovement from 2014’s projected trajectory, which showed an increase from21% to 26%.Although these trends are encouraging, we are concerned that they are notsustainable. The focus has been on the top levels, as organisations have soughtto improve top-level representation, particularly in Europe, where there havebeen increasing requirements for diversity in the Executive and Board ranks (forexample, in the UK and Switzerland). But this focus has not extended to lowerlevels of the career hierarchy, raising concerns that the internal pipeline forfuture female managers and leaders may be weakening in many organisations.For example, we see, in many regions, that women are actually less likely to bepromoted from Staff to Professional levels; given the high volume of promotionsacross these lower levels and the very high representation of women in staffroles, it could be that that the Staff level is an underutilised, accessible channelfor female talent to eventually advance into higher ranks.On a global basis, women are also hired at lower rates into Staff, Professional, andManager levels, though Europe notably is an exception to this trend. As a result ofthese patterns, representation of women in the Professional and Above categorywould increase only from 35% to 40%, globally, over 10 years. In Europe, theprojected trajectory over 10 years leaves female representation in these samelevels flat at 37%, primarily due to slow rates of workforce mobility (i.e. velocity).To accelerate these paths, organisations need to move from ad-hoc efforts toimprove senior-level hiring and promotion and focus on the whole system of talentdynamics. To make advances sustainable, they need to focus on the key drivers ofgender diversity to build the inclusive culture required to support the change andto accelerate further the speed of progression for women.8MERCER
As we will see, our preliminary analysisfinds that progress observed in thecurrent year has not stemmed fromimprovements in the key drivers ofgender diversity identified in researchfrom 2014 — notably, no appreciableimprovement was seen in executiveengagement, pay equity, prioritisationof flex-time, part-time, and leavepolicies, or tailored health and wealthprogrammes for women. The apparentdisconnect is concerning becauseit raises the question of whetherprogress in the most recent year canbe sustained over the long term. If thecurrent progress observed reflects aresort to a “quick fix” — that is, ad-hocfocus on improving representation atthe top through targeted hiring andpromotion activity — progress will waneand current efforts will become selfdefeating. Organisations must also putinto place supporting infrastructuresand drive cultural change to eliminateunderlying, systemic barriers to theprogress of women. This researchdetails on what is required to achieveand sustain success. For surveyedorganisations in Europe, there isconsiderable opportunity to tap thesechannels, as the region lags on severalof these key drivers.READING THE INTERNAL LABOUR MARKET MAP EXHIBITSFOUND ON THE FOLLOWING PAGESAn ILM map is a graphical representation of the talent pipeline in anorganisation — a quick point-in-time “snapshot” of the average surveyrespondent. It summarises, for each standard career level, the rate atwhich talent is flowing into the organisation (total hires), moving upthrough the hierarchy (total promotions), and ultimately exiting theworkforce (total exits). Percentages in the middle of the map indicatefemale and male representation at each career level. Hire, promotion, andexit rates are calculated as the total number of events divided by averageheadcount, by level and gender, over a 12-month period.9
2015 WHEN WOMEN THRIVE RESEARCH FINDINGS: FOCUS ON EUROPEH O W M U C H P R O G R E S S H A V E C O M PA N I E S M A D ESINCE 2014?Figure 2. ILM Map for the Average Global OrganisationCAREER LEVELAV E R A G E R E P R E S E N TAT I O NA N D T O TA L P R O M O T I O N ST O TA L H I R E SExecutiveFemales: 9%Males: 6%Senior ManagerFemales: 8%Males: 7%ManagerFemales: 8%Males: 9%20%T O TA L E X I T SFemales: 10%Males: 8%80%Females: 7% Males: 6%26 %Females: 8%Males: 9%74 %Females: 8% Males: 7%33%Females: 9%Males: 10%67%Females: 7% Males: 6%ProfessionalFemales: 14%Males: 14%Support StaffFemales: 18%Males: 21%38%Females: 12%Males: 12%62%Females: 5% Males: 5%49%51%Females: 15%Males:17%O V E R A L L R E P R E S E N TAT I O N : 3 8 % F E M A L E 6 2 % M A L EON HIRES: There is a focus on femalehiring at the top twocareer levels. A hiring gap betweenwomen and men exists atthe Manager and SupportStaff levels. Hiring at the top two levelsis generally higher than ratesobserved in 2014; rates aregenerally lower at the bottomtwo levels.ON PROMOTIONS: Women are favourablypromoted at all levels.ON EXITS: There is unfavourable femaleattrition at the highestcareer level. Exit rates are generally lowercompared to 2014 at the topthree levels and higher at thebottom two.(n 350 participating organisations)10MERCER
Figure 3. ILM Map for the Average Organisation in EuropeCAREER LEVELAV E R A G E R E P R E S E N TAT I O NA N D T O TA L P R O M O T I O N ST O TA L H I R E SExecutiveFemales: 11%Males: 6%Senior ManagerFemales: 8%Males: 5%ManagerFemales: 8%Males: 8%ProfessionalFemales: 9%Males: 9%21%T O TA L E X I T SFemales: 10%Males: 8%79%Females: 4% Males: 4%24%Females: 7%Males: 8%76%Females: 4% Males: 4%32%Females: 8%Males: 8%68%Females: 3% Males: 3%40%Females: 9%Males: 9%60%Females: 1% Males: 3%Females: 13%Males:14%Support Staff51%49%Females: 14%Males:14%O V E R A L L R E P R E S E N TAT I O N : 4 0 % F E M A L E 6 0 % M A L EON HIRES:ON PROMOTIONS:ON EXITS: There is a focus on femalehiring at the top twocareer levels. A hiring gap between womenand men exists at the Stafflevel only. There is no direct 2014comparison, but a focus onhiring at the top is in contrastto the 2014 Europe/Oceaniaresults, which showed a hiringgap at the top. Women are promoted equallyat all levels, except fromSupport Staff. There is unfavourable femaleattrition at the highestcareer level. Exit rates are generally equalbetween men and womenacross the board, except atthe Senior Manager level.(n 68 participating organisations)REPRESENTATIONOn average, representation of women in the workforce has not changed since2014. Women continue to make up roughly 40% of the average company’sworkforce across all career levels, and female representation declines as careerlevels rise. (See Figure 2.) Women are still best represented at the Staff levelin nearly all regions — the one exception is in Latin America, where women arecomparably represented in the Prof
RESEARCH FINDINGS: A EUROPEAN PERSPECTIVE #WHENWOMENTHRIVE This preliminary research findings paper was produced for discussion at Mercer’s 2nd Annual When Women Thrive Signature Event, taking place in Brussels, Belgium, on 10 November. The content is based on initial analysis of our 2015 global research findings, with particular focus on Europe.
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