Gender-Inequality - IMD Business School

Gender inequality in the workplace: factors, and how to combat it

Updated: May 2024

Women spend years building a bridge to career success. But before they can cross it, they’re faced with the ugly troll underneath and the impossible riddle: What infects playgrounds and boardrooms alike? It’s not a virus, and yet it’s an epidemic.

Gender inequality still exists at all levels of business and in all industries. Workplace sexism creates barriers to women’s success through unequal pay, gender stereotypes, and fewer promotions. To create parity for women in business, we first have to understand the factors contributing to gender inequality in the workplace, then find ways to combat it. Read on to learn how.

  1. What are the factors that contribute to gender inequality in the workplace?
  2. What are the consequences of workplace gender inequality?
  3. How to combat gender inequality at work?
  4. How to empower a future of gender equality in the workplace?

1. What are the factors that contribute to gender inequality in the workplace?

Let’s dive into the ways sexism presents itself in organizational culture. 

Wage disparities

The gender pay gap is slowly closing, but pay equity is far from breaking the glass ceiling. Despite gender equality initiatives like Equal Pay Day, women in the U.S. are only paid 83.7% as much as men, on average. For women of color, this wage gap is even greater. 

Often, unequal pay starts with the hiring process. Women’s salary expectations are lower than those of equally qualified men, and they’re less likely to snag entry-level jobs. Because there are fewer women to promote to leadership positions within the company, the wage gap widens the further up the corporate ladder they climb. 

Lack of representation in leadership

Women are consistently barred from leadership positions by being passed over for promotions and development opportunities, but data shows that business benefits from having female executives. 

While very few women occupy leadership roles and management positions, the numbers are marginally improving. In 2023, female leadership in Fortune 500 companies topped 10% for the first time in the list’s 68-year history. But men still made up 83% of the 533 executive officers within the corporations listed in the S&P 100. 

Altrata’s 2022 Global Gender Diversity report found that only 28.2% of board members were female, and most of them held nonexecutive roles. This means that while these women were board members in title, they had no influence over company decision-making. Within the C-suite, just 5% of CEOS were women. 

Additionally, there’s an even more pronounced absence at the top of women of color and women in the LGBTQ+ community. Only two black women CEOs made the 2021 Fortune 500 list, and just 1.2% of the coveted spots on the list were other women of color. This lack of representation means there are fewer role models for young women to use as inspiration for their own career paths, and the cycle continues. 

Gender stereotype

A gender stereotype is a generalized assumption about a person’s characteristics that reinforces sexism. Racial stereotypes compound gender stereotyping for women of color, who often experience microaggressions within the workplace. These brief messages can be verbal, nonverbal, or environmental, and they communicate a negative message about a marginalized or underrepresented group.

One example of gender stereotypes in the workplace is how qualities like intelligence and agency are assigned to men versus women. Gender stereotypes often reframe these characteristics to portray women as “bossy,” whereas in men they’re considered good leadership qualities. Even seemingly innocuous gender stereotypes, such as the assumption that women are more nurturing, can undermine their contributions in the workplace.

Gender stereotypes disadvantage women’s input before it can even be shared. Because of the common unconscious bias that assumes women are more emotional (and, therefore, less rational) than men, a female employee’s idea might be overlooked in favor of one raised by her male counterpart. Or, a man might share the same idea that a woman shares at work and end up getting credit for it because he’s seen as more of a leader.

There’s no easy solution to battling gender discrimination. Conforming to gender stereotypes makes a woman appear less competent, but challenging them can mark her as difficult or aggressive. However, there are ways to reclaim the upper hand by learning, speaking up, and reacting in ways that shut down discrimination.

Sexual harassment

Female workers faced with sexual harassment have to navigate yet another obstacle to gender equality in their career path. 

The #MeToo movement revealed how pervasive sexual harassment is within women’s experience in the workplace. As a result, sexual harassment in work environments is now more likely to be reported — and victims are more likely to be believed. 

Work-life balance

Women often perform more invisible labor (such as common household chores and childcare) than their male partners do, creating an unequal balance between home and professional duties. As primary caregivers, moms are presumed to “struggle” to keep up with the demands of their jobs. As a result, female employees are less likely to be promoted or break through the glass ceiling.

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2. What are the consequences of workplace gender inequality?

Gender discrimination within the workplace hinders personal success as well as company success. Below are just some of its negative impacts.

Economic drawbacks

Because women are often overlooked for promotions, they’re also stuck with lower compensation. As a result, female employees might be more likely to change jobs or industries or leave the labor force entirely. 

This undervaluation also impacts company success. When female employees’ contributions aren’t recognized, organizations miss out on ideas, projects, and sales that could have positioned them as industry leaders

Mental health implications

Sexism is also a mental health issue, threatening female employees’ well-being. Working as hard as their male counterparts without receiving the same recognition is draining. Discrimination and sexual harassment can quickly lead to burnout and a decline in productivity.
Burnout from discrimination contributes to why women prefer to work remotely. After the pandemic, many women of color were especially hesitant to return to the office because of their experiences of isolation and discrimination there.

Stunted innovation

Diverse perspectives drive innovation. So, when women are excluded from key decision-making, research and development (R&D) can stagnate. 

Fostering gender diversity, equity, and inclusion results in increased employee engagement and better employee retention. When companies fully invest in their employees, they can spend less time hiring and training and more time innovating.

3. How to combat gender inequality at work?

How can gender inequality be addressed in the workplace? By prioritizing the following actionable steps, companies can ensure that their DEI initiatives go beyond a marketing promise. 

Equal pay and transparency

States with pay transparency laws, such as New York, require employers to list salary ranges in the job description. This transparency supports salary parity by creating more competition for human resources and higher salary offers for employees. 
Beyond pay, organizations can share the hard numbers of their employee demographics. Making these records publicly available holds C-suite leadership and human resources departments accountable for their diversity and inclusion plans.

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Development and mentorship programs

Personal development and mentorship initiatives create more equitable workplaces for women. Creating a diversity and inclusion training program, like those that prioritize LGBTQ+ employees and racial minorities, results in more diversity within leadership roles. Allowing women to network with female role models in C-suite and management positions opens opportunities for them to take the same path. 

Companies can also offer and support leadership programs for women within the organization. This helps women develop the skills necessary for stepping into management and C-suite roles. 

Flexible work arrangements

Implementing flexible work hours within the organization means that fewer women are sidelined due to family obligations. Including options such as remote and part-time work also helps women maintain work-life balance. Additionally, providing parental leave for fathers gives women more childcare support and increases equality among parents. 

Anti-discrimination policies

Anti-discrimination policies within a company provide security for employees and attract more diverse talent. For example, creating standardized diversity and inclusion procedures for hiring can help prevent unconscious bias and the persistence of gender stereotypes. 

Internal anti-discrimination policies might also include protocols for reporting misconduct, discouraging backlash against female employees who lodge discrimination complaints.

Addressing unconscious bias

Unconscious bias training in the workplace creates awareness of the hidden assumptions that influence decision-making. When employees are trained on how to recognize gender bias, women are not only included in key conversations — their ideas are more likely to be heard.

4. How to empower a future of gender equality in the workplace?

Empowering a future of gender equality in the workplace requires a multifaceted approach that combines policy reform, cultural change, and education. Firstly, it’s crucial to establish strong anti-discrimination policies and ensure they are rigorously enforced. This includes creating transparent processes for reporting and addressing gender-based discrimination and harassment. Companies should also implement equitable hiring and promotion practices, focusing on diversity and inclusion at all levels of the organization.

In addition to policy changes, there must be a shift in workplace culture. This involves regular training and workshops for employees at all levels to foster an understanding of gender biases and how to combat them. Promoting a culture of respect and inclusion, where all voices are heard and valued, is essential. Mentorship programs can be particularly effective, especially when they support underrepresented genders in leadership development and career progression.

Moreover, flexible work arrangements and parental leave policies should be gender-neutral, encouraging both men and women to balance work and family responsibilities equally. This not only supports employees but also challenges traditional gender roles and stereotypes.

Finally, continuous evaluation and adaptation are key. Organizations should regularly assess their gender equality initiatives, gathering data and feedback to refine and improve their strategies. By committing to these practices, businesses can create a more equitable and productive workplace, paving the way for a future where gender equality is not just an aspiration but a reality.

Despite significant progress towards gender equality, there’s much more work to be done. That’s why at IMD, we’re steadfastly committed to fostering a more equitable work environment. Through our world-class education programs, we empower individuals and organizations to challenge gender bias, nurture inclusive leadership, and advance workplace equality.

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