Study after study has shown the positive impact of a gender-diverse and -inclusive workforce. Yet according to a 2020 report by McKinsey & Company, women are nearly twice as likely to have lost their jobs during the COVID-19 pandemic as compared with their male counterparts. Letting more women go — specifically during a global crisis — seems shortsighted.
In a study that surveyed 4.8 million employees in the U.S., companies that were diverse and inclusive, with key employee groups having very positive experiences, showed a 14% gain in stock performance between 2007 and 2009, even when stock market index S&P 500 suffered a 35% decline. During times of economic expansion, diverse companies outshone others in the market, with more than three times their revenue growth.
Crises lead to severe cash shortages, and it is easy to let diversity take a back seat. Yet it is precisely during a crisis that organizations need to continue investing in diversity if they want to retain their competitive edge.
When cash is tight and the economy is crashing, are there cost-effective solutions to improve gender diversity? Yes, and this is where behavior science solutions can help.
Debiasing organizations using behavioral design interventions can have a large impact on female workforce recruitment, retention, participation, and promotion, often at “shockingly low cost and surprisingly high speed,” according to Iris Bohnet, director of the women and public policy program at Harvard University, in the book “What Works: Gender Equality by Design.”
Instead of relying on traditional, expensive methods of attempting to teach people about biases with diversity programs that often fail, organizations should focus on changing processes by understanding employee behavior to drive lasting change.
Consider India, a country where women’s labor force participation declined from 32% to 21% between 2005 and 2018. Studying gendered demand for jobs in the country, a World Bank report found that one-third of the 800,000 job advertisements in its sample had specified a preferred gender.
Instead of relying on expensive gender bias workshops for recruitment, behavioral science suggests avoiding gendered wordings in job postings so companies can increase the number of women who apply to a job and improve their recruitment pipeline.
Similarly, according to research by Bohnet, women apply to jobs where they satisfy 100% of job requirements while men apply even when they satisfy 65%. Using behavioral science, job ads that separate the “nice-to-have” and “must-have” requirements will improve diversity in the recruitment process.
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Reviewing evidence from behavioral science experiments conducted mostly in developed economy settings and viewing them through the lens of the developing economy context, I developed a gender equity methodology framework for organizations in lower-income countries. The framework rests on three pillars: setting up systems, recruitment, and promotion and participation. The framework has three rating categories that organizations can use to improve their diversity scores.
Component 1: Structures and processes
It is difficult to spearhead any change without setting up systems. Set up an equity team with participants across the board of the organization to avoid the equity team becoming a figurehead. Set up gender-disaggregated data systems, as well as sexual harassment prevention and redress systems, and first tackle explicit bias.
Data is a powerful tool to determine the source of inequity in a process. Google, for example, was able to reduce the attrition rate for postpartum women, which data revealed was double that for other employees, by 50%.
Research has shown that training employees on sexual harassment helps define basic information, but it does not change behaviors and sometimes even increases harassment.
Instead, a more effective method is bystander training. This has shown faster and positive effects, in both intent and confidence to intervene, when employees witness any act of sexual harassment taking place around them. It has created allies for survivors and changed the culture of organizations to one of togetherness, instead of alienation, and these effects have lasted even 12 months after training.
Component 2: Recruitment
This stage aims to close the gender gap in the recruitment process, from job advertisements until final onboarding into the organization.
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For example, consider employee referrals, a popular incentive used by most companies to receive high-quality applications. While employee referrals are known to be positively correlated with employee satisfaction and tenure, research shows that people network with those like themselves. More often than not, they also refer people like themselves. In an organization that already has far fewer women than men, employee referrals are a bad strategy to promote gender diversity.
For organizations that blame poor negotiation skills as a factor in the widening gender gap, behavioral science has a simple solution: Reduce ambiguity in negotiation. An intervention as simple as explicitly stating that the salary is negotiable in job ads has been shown to reduce the gender gap in applications by 45%.
Component 3: Participation and promotion
To truly receive the positive impact of a diverse and inclusive workforce, it is not just important to recruit more women, but also to retain and promote them at a rate equal to that of men. Given that recruitment can cost between 16% and 400% of an employee’s annual salary, depending on the seniority of the role, it makes business sense for companies to retain the talent they hire.
Start by mapping project allocation to promotion criteria. Because work practices were designed at a time when there were far fewer women than men in the workforce, often the criteria for project allocation and promotion are gendered. Women spend more time than men on building teams or managing crises that are often not recognized. Cumulatively, this sets out a gendered allocation and evaluation process placing women disadvantageously in the company.
Intentionally distributing routine administrative tasks that are nonpromotable, instead of asking for volunteers, can neutralize gendered aspects of employee participation.
Behavioral science solutions are as applicable for development sector organizations as they are for corporations. Nonprofits suffer from poor diversity, too: Only 20% of U.S. nonprofits with an annual budget of $50 million or more have female CEOs, gender pay gaps persist, and only 8% of nonprofit executive directors are people of color.
If your organization suffers from a lack of diversity, behavioral science solutions will help.
Granted, it is hard to mobilize resources and employee time to focus on diversity during a pandemic, but it is in a moment like this that diversity needs to be prioritized. Your diversity and inclusion efforts can predict whether your organization will thrive or crash.
Instead of cutting down diversity efforts, look for low-cost solutions to center equity in your organizational processes. Leverage data to track your progress and reap the benefits of a truly diverse and inclusive workforce.