In 2021, women held only 29% of all executive positions across Germany, per Statistische Bundesamt Destatis. That placed the country in the lower third of all EU member states (the EU average is 35%). Why are still very few women in leadership positions across a country that praises itself as so progressive? Should companies do more in hiring women as executives going forward?
Prof. Dr. Marion Schick, Labor Director and part of Telekom's Board of Management for Human Resources, knows: "[...] companies are harming themselves ( if there are hardly any women in management positions). They are depriving themselves of the skills and talents that hundreds of thousands of highly trained women have at their disposal. From my point of view, this is also a moral issue, but above all, a business issue."
In this article, we highlight one reason why fewer women than men still make it into corporate leadership positions today. We also explain why companies would benefit significantly from hiring more women as executives in the future. Finally, we provide practical tips to actively address the problem.
Why there are fewer women in leadership positions
The fact that there are fewer female bosses in today's workplace cannot be attributed to the fact that women are less qualified than men. Today the percentage of women who graduate from high school and university is even slightly higher than that of men.
But what is the reason, if not the difference in qualifications, that significantly more men than women make it to the executive floors? Gender-specific socialization plays a not insignificant role in answering this question. We explain what is meant by this in concrete terms here.
Socialization vs. gendered socialization
Socialization in general means the process in which we humans acquire to think, feel, believe, want and react in the way that is customary and approved in our society. This process begins at birth and continues throughout life. People who particularly shape us in this process are our parents, but also friends, teachers and other important people close to us. Also, what we consume today through media such as television or social media platforms (e.g. Facebook, Instagram) influences our thinking, feeling, believing and wanting.
Now, what gender socialization means is this: scientists now know that only a small part of the differences between men and women can be explained by biology or genetics. The majority of the differences are "brought up", socially developed, ergo socialized. In concrete terms, this means that girls and boys are taught different gender roles from an early age, that different expectations are placed on them and that they are given different opportunities, and that they therefore develop differently.
Expectations on young men
To now specifically address the issue of "why there are fewer women in leadership positions": According to a report by the National Coalition of Girls Schools, young men today are still being raised to be confident, assertive, and self-promoting. Still circulating in our society is the assumption that these are "typically masculine" traits, as well as that science subjects such as engineering and math are "masculine" fields and roles of power and leadership are meant for them rather than for women.
Expectations on young women
On the other hand, there still is a skeptical or negative attitude towards female leaders. Such attitude suggests to women that it is inappropriate for them to possess the "typically male" characteristics associated with a leadership position. Instead, women are expected to possess qualities such as empathy, friendliness, caring, consideration, and so on. The latter qualities seem to contradict the "typically male" leadership traits.
As a result, women still think of themselves as being rather unsuited for leadership roles as well as for other roles of power. Men, on the other hand, have fewer doubts about their suitability for leadership positions. Accordingly, fewer women than men aspire to positions of leadership; they are correspondingly underrepresented.
It should be noted here that there are certainly exceptions. Also, the role models of men and women are gradually disappearing from the mind of society. Nevertheless, a clear trend is still discernible today.
Of course, there are numerous other factors that contribute to the fact that there are fewer women in leadership positions. However, the one of gender socialization will receive special attention in this article.
Why companies benefit from hiring more women in leadership positions
Whether companies should hire more women in leadership positions is not only a moral question. It is also a business decision. In other words, companies seeking success across the board should strive for more equity between men and women in their management staff.
A financial edge
Companies with more women in leadership positions tend to have better financial performance. According to a study by McKinsey & Company, companies in the top quartile for gender diversity in their leadership teams were 21% more likely than companies in the bottom quartile to experience above-average profitability. Also, a study by the Peterson Institute for International Economics found that companies with at least 30% women in leadership positions had net profit margins up to 6% higher than those with fewer or no women. A World Economic Forum report suggests that closing the gender gap in the workforce could add $12 trillion to global GDP by 2025. That is because increasing women's participation in the workforce and promoting gender diversity in leadership positions can lead to more innovation, increased productivity, and better decision-making.
Companies are harming themselves (if there are hardly any women in management positions). They are depriving themselves of the skills and talents that hundreds of thousands of highly qualified women have. From my point of view, this is a moral issue, but primarily a business issue.
Prof. Dr. Marion Schick
Increased customer satisfaction
A a study by the Boston Consulting Group found that companies with more diverse management teams had higher innovation revenue. Specifically, companies with above-average diversity in their management teams generated 19 percentage points more revenue from innovation than companies with below-average diversity. research has also shown that female customers are more likely to be loyal to companies with high numbers of women in their executive suite. Furthermore, a study by the Harvard Business Review found that companies with more women in leadership positions tend to have better customer satisfaction ratings all around.
Better performance and motivation among all employees
Companies that achieve a balance between men and women in leadership positions can reap many benefits. Women represent over 50% of university graduates and, thus, the majority of the potential next generation of specialists and leaders. By recruiting women to management positions, companies can enrich their workforce with diverse qualifications and fill personnel shortages in specialist and management areas. Companies that recruit a balanced number of men and women to management bodies are regarded as progressive and have a better corporate image, which can give them an advantage in recruiting competent and highly qualified employees of all genders.
Moreover, a balanced proportion of women in a company can positively impact employee motivation and performance. In companies with a balance between men and women in management bodies, employees feel represented, which boosts their morale and motivation. Studies have backed up these claims and how they lead to better business outcomes.
How executive coaching can help
The way people think shapes their actions much more than their genes, their biology. If the goal is to recruit more women to leadership positions in the future, then the way women think about themselves as well as the way women are thought of must change accordingly. Business coaching can be of immense help in uncovering and changing ways of thinking that you are not aware of. We show you some tips here:
Reflect
As a first step, it is helpful to reflect on the extent to which girls and boys are actually socialized differently today. Perhaps you can think of examples of differences from your childhood.
Raise your awareness of prejudice
Beliefs we hold about "typically feminine" and "typically masculine" characteristics may feel instinctive and natural. However, realize that stereotypes are learned and instilled.
Choose your beliefs
No one is entirely free of prejudice. However, we have the chance to work on our beliefs and redefine them. Ask yourself: is this belief useful? Is it holding me back or holding others back?
Focus on achievements
A leader's job is to guide employees so that company goals are met and projects are realized. Whether this is accomplished well is not a matter of gender. Focus on a person's performance and use this to decide whether or not he or she is suitable as a boss.
Use your reach
Consciously draw attention to women in leadership positions. Use your reach in the company, on social media, etc., to give them recognition and appreciation, but also to show young women a role model.
In our Business Coaching at Sparrks you will be given many more coaching tools with regard to proper leadership. If you would like to deal more intensively with the topic of "women in leadership" or also "prejudices against men and women", you have come to the right place. Because we have specific coaching offers that explicitly deal with these topics. Book a demo call and visit our website to learn more!
FAQ: Women in leadership positions
Is there a gender pay gap among CEOs?
According to a recent publication from the National Bureau of Economic Research (U.S.), women in the executive position (such as CEOs) earn 26% less than men, a figure that falls into 8% less once we account for factors such as company features, characteristics of executives, and job titles.
Which country has the highest number of female CEOs per capita?
The country with the highest proportion of female CEOs (13.1%) is Singapore, according to a report by Deloitte published in 2022.
What percentage of managers in Germany are women?
The value of M&A deals, according to Statista, 16.4% of management board members across the largest 100 companies in Germany were women in 2021.
