Fixing The Broken Middle Rung

WHEN FORMER Hindustan Unilever (HUL) MD, Sanjiv Mehta (currently executive chairman, L. Catterton), took over the FMCG company in 2013, its diversity percentage was around 18%. Parent Unilever had already set a global mandate of a diverse workforce, and Mehta needed to do his bit to make sure the Indian subsidiary had a fair representation of women. He asked his team to approach every woman employee the company had lost post maternity leave to check whether they were unemployed. “Surprisingly, 80% had gone back to work, but with a different organisation. They were asked why they didn’t return to the FMCG major. Most said post their maternity leaves they were given soft jobs, which they were not interested in. We came up with a policy that we wouldn’t lose a single mother. We followed them through the natal so that they don’t have a change of heart and made sure they have an exciting career with us,” says Mehta.

The company fixed the problem by offering ‘returning mothers’ core roles in sales, marketing and market research. It even offered them P&L roles. Those who opted to work from external locations were allowed to travel to their base stations once or twice a week, and work from places of their choice for the rest of the days. In case a woman leader was chosen for an international posting and she wasn’t ready since her children were young, the company asked her to try out the role for six months and then decide.

The flexible policies worked. A decade later when Mehta retired, HUL’s market cap quadrupled, and representation of women in its workforce went up from 18% to 46%.

Companies such as HUL, Diageo India or JSW MG Motor introduced diversity policies that offer women an enabling environment so that they don’t exit the workforce. The irony, however, is that just 1.6% of Fortune 500 India companies have women at the helm. In The Next 500, a ranking of emerging firms, the number is higher at 5%. For the overall Fortune 1,000 India universe, only 3.2% companies are led by women MD/CEOs.

To the leading question on whether women have been able to break the glass ceiling, the reality is that few actually reach the top. In fact, India Inc. is grappling with a leaky pipeline of women in middle management as well. Over 30-40% of female employees quit the workforce by the time they enter middle management. It is the time when they get married or have a family, and find it difficult to return to work post childbirth. The pipeline continues to leak at the next level where women have the responsibility to give moral support to children, who by the time are transitioning from high school to college, or take care of elders in the family.

The Indian woman is the ubiquitous caregiver. Though organisations are aware of the business case for diversity, most shy away from hiring women. The reason — there could be a six-month maternity leave in the offing and firms either don’t want to, or can’t afford to make the investment. Since maternity leave is fully paid, once a woman goes on leave, the company needs to invest in another resource, thereby incurring an additional cost.

Over 98.5% women on a career break have a high desire to return to the workforce, points out Swetha Totapally, partner and regional director, Asia-Pacific, Dalberg Advisors, a global consulting firm. “In Dalberg's work, we found that 70% of working mothers in the US would have stayed if they were given the flexibility.”

But then, is corporate India doing enough to repair the broken middle rung? Progressive companies of scale are trying their best to push the needle — from creating an enabling environment post maternity and mandates for gender-specific hiring to forward-looking policies such as sponsorship and allyship.

According to Pooja Sharma Goyal, CEO, Udaiti Foundation, over 73% organisations have gender diversity goals, but only 21% have action plans in place. “If we are to make a dent in the gender gap at work, companies need to publicly commit and hold themselves accountable to increasing women’s participation through clearly laid out action plans. And the solution cannot be limited to just more women joining the workforce, the approach has to be oriented towards the entire career trajectory that encompasses hiring, retention, advancement and return to work.”

Incentivising Firms/Women

What can be done to push firms to build a strong diversity narrative? Would tax incentives for women, or a corporate tax break, or an incentive to firms trying to embrace diversity help push the needle?

“Tax incentives to organisations are bridge-builders and enablers. Companies need to undergo a cultural revolution where they treat women as valuable resources. There has to be parity, equality and equity in the way we look at employing them and assigning projects,” says Vaishali Nigam Sinha, co-founder, ReNew.

Preeti Bajaj, MD and CEO, Luminous Power Technologies, agrees that tax incentives would help step up the diversity push, especially at the MSME level. “If companies are given tax breaks, they would be incentivised to go through a process of change. Tax incentives could also be given to a woman. If an organisation is saying I am happy to hire you but you are too costly because you will go on leave, give her tax incentive so that she will use the surplus cash to make sure she has household help. We can make the individual accountable, that way the pressure is not on the organisation,” says Bajaj.

But then, a section of India Inc. also feels tax incentives could lead to tokenism. “Diversity has to be driven by companies. A tax incentive will make it a tick-in-the-box activity, you may increase the number of hires, but you may not be able to retain them,” points out Ruchee Anand, senior director, talent and learn solutions, LinkedIn.

Tax incentive to the company or even an individual may not really help fix the broken middle rung, says Yeshwinder Patial, CHRO, JSW MG Motor. A large part of the exodus of women employees in the middle rung happens in smaller organisations who find it difficult to retain women. “Their profit margins are low and paying an employee for six months becomes unaffordable. The government has multiple policies for employment generation. In certain sectors it waives off the employer contribution to provident fund to encourage employment. If the government can have a similar scheme to employ women, especially for smaller organisations, it could help,” says Patial

Instead of tax incentives, if industry bodies certify companies hiring women, it would go a long way in encouraging those not investing in diversity, says Dipali Goenka, joint MD, Welspun. “I am a part of Women Owned Business in the U.S., a certification given to women-run businesses. Our packaging has that logo, and a lot of organisations source from us because we are a woman-owned business. If diversity gets recognised and incentivised, it does make a difference,” she adds.

Nitu Bhushan, CHRO, South Asia, Pernod Ricard India, believes since India Inc. is playing catch-up in the diversity race, government intervention would help. She calls for amendment of the Companies Act. “If the Companies Act is amended and it is made mandatory for listed companies to report the composition in the workforce (white and blue collar) and on gender pay parity, the needle would move.”

India Inc.’s Diversity Push

Though creating an enabling environment by offering best-in-class maternity benefits is a given, it is the culture that matters the most. HUL’s mantra has been to look at talent from a long-term perspective, says B.P. Biddappa, chief people, transformation & sustainability officer, Unilever South Asia. “We invest in talent from a strategic sense. We believe we have a larger play when it comes to talent and it’s a long-term investment for us. So, when someone goes on maternity, we support them and try to make the transition smooth — both when they are leaving for maternity and when they resume work.,” he adds.

The ₹59,575 crore FMCG major not just offers women flexible working hours, but also enables them to share a role where each of them can work according to convenience. “We have a programme where we reach out to women who are open to flexible work patterns. If our own people have moved out of HUL and embraced a flexible working pattern, we try to stay close to them so that when we have projects, we have an option to get them on board. We actively work with women in the larger talent ecosystem to do projects with us in a flexible manner,” explains Biddappa.

The Mahindra Group now has 14 women CXOs from just one earlier. “Our attrition numbers have halved in the last two years. Our senior women leadership hires have gone up by 87% in the corporate office in the last one year,” says Asha Kharga, chief customer & brand officer, and member of the group executive board. Apart from all-women auto dealerships, and training women farmers to run tractors and do the job of collection agents in Mahindra Finance, the conglomerate has been hiring 25-30 women graduate engineers in Mahindra Lifespaces every year and deploying them onsite.

LinkedIn India, on the other hand, has moved from templatised to skill-based hiring. “It unlocks the talent pool and we are able to hire 24% more women. If organisations are hiring a head of procurement or head of sales, instead of looking at someone who has got a product manager or sales manager job title, they could search for people with specific skills. We have skill-based hiring on our platform and diversity nudges are in-built,” explains Anand.

So, when a recruiter is doing a search on the basis of skills and realises most applicants are not gender diverse, he/she could use gender nudges. “We look at the tone of job descriptions. The platform gives recommendations to change the tone. For instance, phrases such as rockstar sound aggressive, and often put women off. Therefore, one needs to use gender-neutral phrases. We also mask photos and names so that one is only looking at skills,” adds Anand.

Gender diversity has to be driven top-down and progressive organisations are ensuring the chief diversity officer reports directly to the CEO. Kharga of Mahindra, who is also the diversity head of the conglomerate, reports directly to MD Anish Shah. In fact, for a lot of firms, diversity, equity and inclusion (DE&I) is an important parameter for assessing a CEO’s performance. “The board assesses our CEO on the impact he has had on diversity and inclusion in the organisation. Then the next line of people, the top management who report to Sumant (Sinha, founder, Renew Power) are also assessed on their contribution to the 2030 DE&I target of the company,” says Sinha of Renew Power.

However, Bhushan of Pernod Ricard believes getting the diversity head to report to the CEO is tokenism. “The CEO has limited spans of control that they can sensibly manage. For me it’s a scary place if work gets done in a company only when the function reports to the CEO. DE&I is so fundamental to how a company should operate and it is so merged to how hiring happens, how policies are written, how we look at retention and pay, to me it makes sense sitting in the HR function.”

Welspun, says Goenka, is investing in skilling women across levels so that they are ready to take up industry relevant roles not just within the company, but outside as well. “I am talking about industry 4.0. I am upskilling my entire ecosystem for roles of the future such as AI. If I don’t upskill my teams, or give them that opportunity, I won’t be able to control the leaky pipeline.”

Though McKinsey always attracted women professionals, it felt the need to dial-up its diversity agenda six years ago when it became apparent that women felt they could enjoy professional success and balance outside. “We recommitted to our core mission to attract, retain and develop talent. We recruited incredible women but attrition rates were stubbornly high. Beyond recognising several biases, we created opportunities to allow women to ramp-up. We assigned senior sponsors who created these opportunities and spoke up for them. This wasn’t their burden to carry. It had to come top down,” explains Vivek Pandit, senior partner, McKinsey.

Sponsoring Women

India Inc. is still playing catch-up on gender diversity. Having a fair representation of women in the workforce hasn’t been easy, and other forms of diversity (such as inclusion of people with disabilities, from the LGBTQI community, caste etc) is a far cry. Most CEOs believe creating a culture of sponsorship could help the cause. A sponsor is typically a senior leader who speaks up for a woman colleague. “Having a senior male or a female sponsor who speaks for you and promotes your work is invaluable. Senior men are in positions of power and have their own circles of influence. I have been the beneficiary of some excellent senior male members in Edelweiss who have guided me in important phases of my career, and spoken for me,” says Naghma Mulla, CEO, EdelGive Foundation.

“You need two-three guys to say we will back her for the CEO’s role. You need to do that for men, too, but you need to do it more aggressively for women because they are often forgotten when they enter the boardroom for a promotion conversation,” adds Bajaj of Luminous Power.

“We distinguish between mentors and sponsors,” says McKinsey’s Pandit. “Mentors are available to provide guidance, while sponsors create opportunities. Senior male executives need to have a ‘no woman left behind’ mindset. We need to move from talking about supporting women to just doing it.”

Globally, Australia has institutionalised sponsorship. It has an industry body, Chief Executive Women (CEW), which engages directly with the government and businesses to advocate for evidence-based policies that support women leaders. The CEW also makes contributions to the debate on gender balance.

Returning To Work

If you are a woman professional who took a break to nurture your family and wants to back to corporate life, you may want to consider the return-to-work programmes. Aspire For Her, a start-up which specialises in diversity hiring and consulting, has till date done more than 20 return-to-work projects with corporates, and placed over 100 women in the last two years. “Being open to hiring women who have taken a break widens the talent pool. These women have experience, had risen up the corporate ladder, but had to take a break. They have remained knowledgeable, they want to get back into the workforce, but are finding it difficult to do so,” says Madhura DasGupta Sinha, founder, Aspire For Her.

Madhura recently concluded a return-to-work programme for DBS Bank, which hired nine women professionals from Aspire For Her’s 2,500 return-to-work cohort. “They told them to apply (for roles across risk management, corporate banking, audit and operations) without worrying about being a perfect fit. They had not worked on those roles, but with a bit of mentoring and sharpening of the narrative, they were able to fit.”

JSW MG Motor’s one-year return to work programme, #DriveHerBack, has trained close to 100 women in the last five years. Around 20 women have been absorbed by the firm in roles such as sales, operations, supply chain and HR. “We don’t limit ourselves only to women in the auto industry. We want diversity of thoughts which will come from diverse experience and industry backgrounds,” explains Patial.

However, Nigam of ReNew says return-to-work programmes are not always successful. “We need to do a lot more. We should be intelligent enough to first soft-land women and then gently drive them up the expectation ladder.”

India Inc. is giving diversity a hard push. But there’s humongous ground to cover. The crux of the issue is not so much forward policies, but a change in mindset. “Only you can have a conversation with your spouse. Equity at home is basic,” says Bajaj of Luminous. Unless that is done the needle will not move.