Recruiting Insights

Diversity – More than just a temporary Rainbow?

by Constantin Trapp

Just a few months ago, the logos of many companies from numerous industries were still shimmering in the most beautiful rainbow colors. The Corona crisis...

Just a few months ago, the logos of many companies from numerous industries were still shimmering in the most beautiful rainbow colors. The Corona crisis, with its drastic effects on the economy, has pushed the topic into the background in recent weeks, but this does not generally change the fact that diversity is increasingly finding its way into everyday working life as a cool, liberal and cosmopolitan attitude and is giving the impression of being taken for granted. That seems obvious - but is it true?

Constantin Trapp and Dr. Karl-Heinz Weiss-Trapp spoke in detail with Prof. Dr. Carmen A. Finckh, whose research focuses include diversity management and diversity controlling at Reutlingen University, about her findings.

Thronsberg: Prof. Finckh, do companies really take diversity seriously, or is it simply an issue that many cannot avoid because of the social debate?

Prof. Finckh: Companies approach the topic very differently. Roughly speaking, four types of companies can be classified and identified:
The first type includes companies that have the topic of diversity on their agenda and also work through it professionally. They implement a wide range of measures and actually create improved framework and working conditions for diversity. Nevertheless, many of these companies also fail to get more women into top management positions, for example.

Then there are type 2 companies that flaunt many activities to the outside world. But if you look behind the facade, you wonder how seriously they actually operate. In my experience, the employees always sense this. As a result of this blind spot, not only management's credibility suffers, but also all initiatives around the topic. Serious change can hardly take place under these conditions. The upright, honest interest of those in charge is simply missing.

Type 3 companies have nothing to do with the whole issue and live well with it. They are only embarrassed when they are asked about it. They feel that they might be missing something or overlooking something. Sometimes, self-organized groups in the company, such as women's networks, get on their nerves and organize themselves to raise the issue. Sometimes the attitude to the topic changes over time due to a change in the owners or top management.

In type 4 companies, diversity is a matter of course. It is simply lived without ever being addressed. This can sometimes be observed in small family businesses and in start-ups.

Thronsberg: How do you assess the general attitude toward diversity?

Prof. Finckh: As the Equal Opportunity Officer at Reutlingen University, I worked as an implementer in a type 1 institution. It has been very instructive for me to find out how change can actually be achieved.

In all companies, just as in the general population, an interesting phenomenon can be observed. Although diversity issues have exploded due to globalization, migration and populism, there is already talk of diversity fatigue at all levels. Many initiatives, projects and groups of people who have been working for change for 20 or even 30 years recognize that the overall situation in Germany has only improved in isolated cases over the last 10 to 20 years, but not in general. In the Global Gender Index, for example, we are still not among the top 10 countries in the world. For example, in order to have better conditions for reconciling work and family life, one would logically have to live in Iceland or Scandinavia during the family phase, not in Germany.

However, people seem to have gotten used to the situation here in Germany. Furthermore, the topic is being replaced by other topics. At the university, for example, we almost only discuss digitization as the topic of the future. Interestingly, this also includes many diversity aspects, such as the topic of gender in social media or in AI, which are still discussed far too little. These are really important topics in relation to our future society.

Thronsberg: Can you identify any industry differences, for example with regard to women and careers?

Prof. Finckh: Yes, the situation in banks and management consultancies is really astonishing.

Despite a balanced gender ratio in the financial sector of a female share of the total workforce of 52%, the share in the 2nd management level (below executive management) is 21%, whereas it is 40% across industries (Kohaut & Möller, 2017, p. 3). In concrete terms, these figures mean a 2.7-fold disadvantage in the opportunities for women to reach a higher management position (Holst & Friedrich, 2016, p. 832f.) Thus, in no other sector is the representation of women in management positions as low as in the financial sector or banking.

We tried to find out the deeper reasons for this. In the case of banks, we concluded that it has probably developed historically and is thus part of the DNA of this industry. There is a predominantly male-dominated management culture and strongly developed male networks with a dominant crown prince model and, at the same time, a pronounced culture of presence. Nevertheless, I keep coming across ambitious women at financial service providers who are also doing very well in these companies. However, they are still in a critical minority. I often ask myself whether they can cope with this individually.

Another thesis is that it is fundamentally due to the topic of finances and women/families. In my opinion, the much larger issue behind this is the question of the financial situation - perhaps also independence - of women throughout their life cycle, taking into account different ways of life. For example, on the issue of reconciliation and the gender pay gap, we need to look at the family rather than the individual for women in family constellations.

Thronsberg: How do you assess the development of management consultancies?

Prof. Finckh: First, a few shocking facts:

A 2014 survey of large consulting firms with revenues of more than €10 million shows that at the consultant level, the proportion of female employees was still 33%, while at the partner level, women accounted for only 4%. A positive development is not recognizable. As part of a term paper, students took a closer look at six very successful management consultancies with a turnover of between €190 and €600 million. It is really frightening. The percentage of women at partner level is 0 to10%, with an average of around 5%.

Two questions arise, firstly, what is the reason for this and secondly, what are the consequences? In the case of management consultancies, all the typical reasons that fundamentally keep women from top positions certainly apply. But in a more severe form.

A student survey also showed that 52% of male students and only 28% of female students could imagine becoming a partner in a German consulting firm. In contrast, 84% of male and 67% of female students can imagine becoming an executive in a company in another industry. This illustrates the relatively lower attractiveness compared to other management positions from the students' point of view. Female students rate their chances of becoming a partner in a consulting firm and their chances of holding a management position lower than their peers. Universities need to take action here with regard to the mindset of students.