Companies with female leaders outperform those dominated by men. It's time to recruit equally.

According to an article in The Guardian, data shows that companies with female leaders outperform those dominated by men. Therefore, women play a central role in the UK’s post-pandemic economic recovery, with evidence revealing companies with more female leaders outperform those dominated by men, according to House of Commons research.

Companies with more than 30% female executives were more likely to outperform companies that don’t, according to research from academics from the Universities of Glasgow and Leicester.

But only eight women, and no women of colour, are currently employed as CEOs in the FSTE 100, while women hold only 14% of executive directorships and 38% of all directorships, according to the Fawcett Society’s Sex and Power report 2022.

The data shows that women-led SMEs contribute about £85bn to economic output, but Beis research shows that only 16% of small business employers and one in three of entrepreneurs are women. There is further evidence that fewer women get access to financing and business loans, with only 15% of bank financing applications and 22% of new primary business bank accounts openings coming from

New global data from gender equity researcher Equileap, released for IWD, shows that in the UK, women make up only a fifth (20%) of executive team members, 13 companies (6%) have a female CEO, and 27 companies (13%) have a female CFO.

It’s time (and has been for a very long time) to start recruiting equally. Fortune magazine reported that the number of female CEOs “has hit a new high”, with 37 of the companies on 2020’s Fortune 500 list being led by female CEOs. But how can we keep this number on the rise?

The Global Equity Collective said that “The question of how to recruit and retain women has never been more relevant. In 2018 over 10,000 of the UK’s largest companies published their first gender pay gap report. One result, amongst many, is that many employers upped their efforts to recruit and retain more women, especially at senior levels and thus reduce their gender pay gap.

Here are some tips on how to increase female leadership in your business:

• Set diversity goals for women in leadership roles

One way to recruit more women in leadership roles is to set a company-wide diversity goal. These can be either internal or external goals.

• Address and assess your biases

As human beings, we are all biassed to some extent. Mental shortcuts and assumptions help us to make sense of our world. It’s when these biases are applied to people that we run into problems like racism, sexism and discrimination.

• Flexibility and equality of pay

There is quite a bit of data on how to solve gender inequality in the workplace, and many companies are asking how to increase female leadership.

Flexibility doesn't necessarily mean “part time” and assumptions like this (and stigmas around “flexible working”) are why some women feel apprehensive about approaching the topic of flexibility at work.

The World Economic Forum identifies work-life balance as one of the main barriers to hiring and promoting women across industries.

The pay gap continues to get smaller, but there are also other ways to attract more women in management roles. Companies that offer a flexible work schedule and other perks have become more desirable to women, especially women in the C-Suite.

• Recruit internally for women in leadership roles

Chances are you already employ women in your company, so why not recruit women in leadership roles from within? Companies with leadership training programs, internal resource groups, and ERGs for women help prepare their female workforce for leadership roles.

• Be representative in the hiring process

If you want to hire a more diverse staff, make sure your commitment to diversity is represented during your interview process. Forbes summarise it brilliantly when they say “Women are much more likely to join a company when they can interact with women who are already there, and can testify to a company’s commitment to diversity”. In fact, experts say, one of the biggest deciding factors on whether or not a female candidate accepts a job is if there was a woman on the interview panel.

• Make sure multiple female candidates are on shortlists

Seems obvious really. The first item on the UK government’s list of effective actions for closing the gender pay gap is that all recruitment shortlists (including shortlists for promotions) have more than one woman. A 2016 Harvard Business Review study showed that shortlists with only one woman do not increase the chance of a woman being selected - in fact the chances of her being selected were statistically zero. The same study showed that the odds of hiring a woman were 79.14 times greater if there were at least two women in the finalist pool.

• Use Skill-Based Assessment Tasks In Recruitment

Rather than relying on structured interviews alone, ask candidates to perform tasks they would be expected to perform in the role they are applying for. Use their performance on those tasks to assess their suitability for the role. Standardise the tasks and how they are scored to ensure fairness across candidates. This helps minimise unconscious bias and levels the playing field.

• Shout your diversity and inclusion policy loud and proud

In their article How To Alter Your Hiring Practices To Increase Diversity Forbes say: “People will hire based on “fit” - and that often means “people like us.” Instead, if you build a culture where fit means people who expand who we are, then diversity will be germane to your future success.”

• Make your family policies up to date so there is an even playing field for both men and women

Outdated maternity leave policies are fast being overtaken by parental leave policies which are so competitive that we should expect attracting and retaining dads and dads-to-be to become just as big of a concern as it is with mums. Companies are realising that being “family friendly” and rolling out policies such as paid parental leave for both mothers and fathers is a great way to recruit and retain both men and women.

• Representation matters - model diversity

CEOs need to aim for diversity at the very top of the company because representation truly matters. In achieving this they will experience, first hand, what is needed to make diversity happen; from finding and recruiting diverse candidates to creating an environment suitable to retaining and engaging a diverse team. They will also directly experience the benefits a diverse team can bring to an organisation.

In a 2017 PWC survey nearly 70% of female participants working in Financial Services said they looked at the diversity of the leadership team when deciding to accept a position with their most recent employer.

Some more thoughts on how to improve diversity in your recruitment

In 2022, businesses need to be promoting equal places to work and a lot of effort needs to go into to removing any bias that exists and stops organisations from hiring talented candidates on the basis of their gender, background, age, race, religion, or sexual orientation. Similarly, candidates should not be excluded unnecessarily on the basis of a disability or neurodiverse condition.

Walk the floors of your organisation, see what diversity looks like in your business - not all diversity can be seen of course but it will give you a general idea. Remember that this is what your candidates and clients are seeing when they come to your business premises and they will take notice. Policies around a business that focus on inclusion and the equality of all go some way to removing barriers but you need to identify how successful your recruitment strategy has been by working with HR to understand the full make up of your organisation. This isn’t always just about gender or race, there are social stigmas to consider too.

• What does your business look like?

Once you have identified what your business looks like and what the percentages are based on the above sections, be candid about it. If you don’t already share the statistics, then perhaps it is time to. If you have a problem, then be open about it. People accept that businesses have been slow to identify they have hiring problems - what they want to know is that something is actively being done to encourage and train people to hire inclusively and to recruit in a manner that is free from bias.

Identify where the gaps exist in your business, or where the obvious gaps are and identify what it is that you need to do to remain attractive to this section. If you collect data in the recruitment process can you see that you have had applicants from a particular cohort and have they not progressed through the process or are they removing themselves from the recruitment experience? These are all flags that indicate there are issues within the business.

• How do you show your inclusivity?

Remember that when you are promoting your business to clients or to candidates, share how inclusive your business is and the steps you have taken to improve this. We don’t mean cherry picking employees for photo opportunities because they are an employee that ticks a box. We mean genuine sharing or how you are inclusive. Invite your employees to share their experiences. Happy employees will recommend your business as a welcoming inclusive organisation to work for. That will make inroads into building up your employer brand and becoming the employer of choice.

• Job adverts are the first things your candidates see

If you aren’t attracting applications from certain diverse backgrounds, then it might be that you are rejecting them from within your job descriptions. Check to make sure that you don’t have anything within the description that might be stopping an ideal candidate from applying to your business.

Partner up

Working with an external recruitment partner can help remove bias from the initial screening process. They are removed from your business and any preconceptions that might exist. They should have their own processes of reviewing their recruitment processes to ensure that they remain free from bias. They can help you find the best candidates for the role and ensure that you are meeting your inclusivity criteria as well.