55 in 2018
58 in 2019
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Where Culture Makers lead, organizations grow twice as fast
Think your workplace culture is inclusive? Your employees might think differently. Closing this perception gap will yield substantial benefits for companies and their employees.
We are at an inflection point. When it comes to workplace culture, there is a large gap between what leaders think is going on and what employees say is happening on the ground. Two thirds of leaders (68 percent) feel they create empowering environments—in which employees can be themselves, raise concerns and innovate without fear of failure—but just one third (36 percent) of employees agree.
In addition, employees care increasingly about workplace culture and believe it’s important to help them thrive in the workplace (reported by 77 percent of women and 67 percent of men). Their voices are rising, loud and clear, while a growing number of companies recognize the importance of equality.
Yet despite growing awareness, progress just isn’t fast enough.
Why aren’t companies more diverse and inclusive, when the business case in favor of a culture of equality strengthens each year? And why is the share of women in leadership positions still so low?
Our global survey of senior company leaders and employees dives deeply into the workplace culture perception gap.
Closing that gap will help companies thrive in a hyper-competitive economic environment and benefit all employees. Findings and recommendations from this research can empower leaders to take action, no matter where they are on their journey to a culture of equality.
Turning caring into doing
Today, women are still incredibly scarce at the top, comprising only 2.8 percent of FORTUNE Global 500 CEOs 1. Just one in five startups has a woman founder. 2
On one level, the message is getting through: Our analysis of public company statements over the past decade shows a 30-fold increase in the volume of references to culture. But even still, just one in ten companies mentioned culture publicly in 2019.
In fact, we see no change in leaders’ efforts to create a culture of equality.
For the past three years, we have asked employees to share their perceptions of leaders’ actions around building more inclusive cultures. (For example, “Does your organization clearly state its gender pay gap goals and ambitions?” and “Is your organization fully committed to hiring, progressing and retaining women?”) We have grouped the answers of nine such questions together to create an overall scorecard. And over three years, the scores are essentially the same:
Index showing employee perception of leaders' efforts to build more inclusive cultures
Score out of 100, where 100 is complete commitment
55 in 2018
58 in 2019
55 in 2020
Two cultures, one company?
This year, we found that leaders say a culture of equality is important, and they think their organizations are inclusive.
But employees feel very differently.
Since we have proven that a culture of equality allows everyone to advance and thrive, the perception gap is noteworthy:
Make the win with culture
If the leader/employee perception gap were narrowed, employees—and the organizations they work for—could benefit significantly.
That’s because equality = growth.
If the employee perception gap were narrowed by 50 percent...
We estimate that global profits would be higher by 33 percent, equivalent to $3.7tn in 2019. $1.05tn of the uplift would come from the US.
Employees would benefit, too:
The proportion of women who feel like a key member of their team with real influence over decisions would rise by 43 percent, from 1-in-4 to over 1-in-3, while the proportion of men who also feel that way would rise by 5 percent.
The proportion of women who have a strong ambition to reach a leadership position in their organization would climb by 21 percent, from 24 percent to 29 percent, while men’s leadership aspirations would remain the same.
The proportion of women planning to stay with their current employer over the next 12 months would rise by 5 percent, from 85 percent to 89 percent. The retention rate for men would rise by 1 percent.
These factors matter:
Studies have shown that feeling more included, for instance, boosts productivity, while having an ambition to reach leadership is important to advancing in an organization.
In the past, our Getting to Equal research has looked at the impact of career strategy on women’s chances of advancing in the workplace. We found that aspiring to leadership had a positive effect on the likelihood of women advancing to manager or higher: 93 percent of women on the “fast-track” aspire to leadership vs. 79 percent on average.
Given that lower attrition rates also help offset the high cost of recruitment, we estimated how much organizations would save if the expected retention rate of women climbed by 5 percent, i.e., if for every 100 women employed, 89 were retained (instead of 85). Studies suggest the average cost per recruit is equal to 20 percent of their salary. That means that increasing the retention rate of women by 5 percent would save a company employing 50,000 employees, of whom half are women, $8m per year.
A small group of leaders—we call them Culture Makers—are ahead of the curve.
We looked at leaders along the “say-do-drive” spectrum of commitment to building more equal cultures.
Simply put, Culture Makers get it: They are more in tune with the workforce, and they recognize the importance of cultural factors like pay transparency, the availability of family leave and the freedom to be creative in helping employees thrive.
Interestingly, they skew female and younger. They are a more gender-balanced group, since 45 percent of them are women, whereas women comprise just 32 percent of all the leaders we surveyed. A full 68 percent of them are Millennials, compared to 59 percent of all leaders.
Culture Makers are advocates: They are much more likely to have spoken out on a range of issues, including gender equality (52 percent vs. 35 percent of all leaders) and sexual harassment/discrimination (51 percent vs. 30 percent). They hold themselves accountable, leading organizations that are 1.8x more likely to have publicly announced a target to get more women into the workforce.
And they model being the same person both inside and outside of work. 85 percent of them believe that senior leaders who talk openly about personal hardships and challenges are stronger leaders.
Notably, they lead organizations that are growing more than twice as fast as those of their peers. In fact, they report their sales are 2.2x higher and their profits are 3.2x higher.
Unfortunately, Culture Makers are still few and far between. Only 6 percent of leaders in our survey (rising to 9 percent of women leaders) reach the standard.
Prioritize culture, get ahead of the curve
While leaders think culture is important, most of them are not prioritizing it. Just 21 percent identify culture as a top priority, and only 23 percent have set a related target or goal.
Leader Priorities:
Our research examines the root causes of why culture is low on the list and reveals the hurdles to progress.
We asked leaders who do not have targets in place around building a more inclusive environment—but who think they should have them—what is limiting their organizations’ ability to set those targets.
Now that leaders are armed with an awareness of both the perception gap and the barriers to building more equal cultures, they can “say, do and drive” the behaviors and policies that will close the gap and overcome the obstacles in their organizations.
If leaders prioritize a culture of equality now, they will create an environment that is more likely to produce the financial results they want and need. If people feel a sense of belonging and are valued by their employers for their unique contributions, perspectives and circumstances, they are empowered to innovate more. Everyone will rise. And with more gender-balanced leadership teams, workplace cultures will continue to become more inclusive.
Eventually, leaders will evolve to see profit and culture not as separate endeavors at all, but as tightly interdependent goals, equally crucial to success.
Ready to build a culture of equality? Make it as important as financial growth, talent and productivity.
Fostering a diverse and inclusive culture can no longer fall to the bottom of the agenda. It is not only important to growth, it is also a safeguard against risk in a hyper-competitive economic environment.
Creating a culture of equality anchors back to the three pillars our previous research identified—bold leadership, comprehensive action and an empowering environment. The following recommendations outline ways for leaders to take action and drive growth, no matter where they are on their journey.
Creating a culture of equality must be at the top of the business agenda. It starts with the belief that diversity is not only the right thing to do, but a business imperative that is treated the same as any other strategic priority.
This includes:
Even in challenging financial times, culture must remain a top business imperative like any other, and its importance must be communicated frequently.
Gather your data, establish scorecards, track progress and communicate often with your key stakeholders.
Establish the importance of shared success, rewarding and recognizing leaders and teams for progress toward a culture of equality.
While establishing and tracking goals and targets is essential, leaders must go beyond the data to fully understand the perception gap. They should solicit meaningful dialogue with employees that allows them to hear firsthand how included their people feel, identify where gaps exist and focus their efforts to improve.
Consider methods that are:
As our research reveals, leaders and employees can have very different perspectives on workplace issues. Understanding the perception gaps is the first step, but closing them will require leaders to roll up their sleeves alongside employees to encourage and cultivate Culture Makers.
Leaders can drive collaboration by:
Culture Makers exist in every organization and at every level. Some may be obvious leaders, while others may need a nudge to step forward. Use inclusion- and diversity-building programs to create opportunities for future Culture Makers to opt-in and take on specific culture-related roles in their offices or departments.
Find ways to bring leaders and culture-minded employees together, brief them on the challenges the organization is facing and work together to develop specific, actionable solutions.
As more people become Culture Makers, inclusion and diversity strategies will continue to evolve and expand, as will the potential of all employees to find meaning, social support and wellbeing at work—while contributing more fully to the growth of their organizations.
Our research explored why there continues to be significant gaps in achieving outcomes in workplace equality, despite growing awareness and commitments from organizational leaders. To find out, we built on our Getting to Equal research from 2018 and 2019 to create new data and analysis in three steps.
Step 1: Quantifying the perception gap
Step 2: Measuring the impact of the perception gap on employee outcomes
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