Latin America May Lead The World On Gender Diversity By 2025

January 28, 2016, 7:43 PM UTC
Angelica Fuentes
Photograph by J. Countess — WireImage via Getty Images

When it comes to advancing women in business, maybe the world should take a page out of Latin America’s playbook.

While global corporate gender diversity is forecasted to remain relatively flat for the next decade, according to a new study from workplace consulting firm Mercer, the women of Latin American are expected to make substantial progress, with women holding nearly half of all professional and managerial roles by 2025.

That’s a major reversal of the current situation, where the U.S. and Canada lead in terms of the share of women in middle management and top leadership roles. What’s more, Latin America has often been called out as a laggard when it comes to gender equality, with women greatly underrepresented in CEO and top management roles.

The Mercer study credits Latin America’s expected turnaround to a greater than average middle management engagement in diversity and inclusion efforts (51% versus 39% globally), belief that supporting women’s health is important for attracting and retaining women (56% versus 45%), and an unusually high portion of women in profit and loss roles (48% to the global average of 28%).

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Mercer looked at data from 583 companies across 42 countries—a sample that includes 3.2 million employees, 1.3 million of whom are women. The study suggests that in most world, companies are treating the “symptoms” of a lack of diversity, rather than tackling the root of the issue. It’s prescription: Create a path for women to land mid-level opportunities and, from there, move on to executive positions.

According to the study, women make up a third of managers globally, 26% of senior managers, and 20% of executives. Although these stats show was some progress compared so the 2014 version of the same study, those moves didn’t come from “systemic improvements,” according to Mercer. Rather, the short-term advances arose from “ad hoc actions, such as increasing hiring at the top.”

At the current rate of progress, women will comprise only 40% of professional and managerial workers by 2025.

The gender gap in a powerful force in business. It could take 118 years for gender wage equality to finally come about, according to the World Economic Forum. A study earlier this month showed that as women advance in executive ranks, they are more likely to feel less healthy, both physically and mentally.

US and Canada Are About to Lag

While Latin America is the “bright spot,” Mercer partner Brian Levine told Fortune, “When you look to the other regions, we see relative flatness…Looking at how organizations are hiring, promoting, and retaining their female talent, if that continues we don’t see much [future] improvement in gender equality and representation of women.”

Currently, the U.S. and Canada show the highest percentages of women in professional and managerial roles at 39%. That compares to 37% in Europe, 36% in Latin America, 33% in Australia and New Zealand, and 14% in Asia. But by 2025, Latin America is expected to lead the world at 49%. Asia will double its representation and Australia and New Zealand is expected to climb to 40%. Europe and the US and Canada are expected to remain flat, making virtually no progress.

The U.S. and Canada also currently lead when it comes to women in executive ranks (22%), with Europe just behind at 21%. But while both regions will see some significant gains, Latin America will again advance most, going from 17% to 44%. Asia and Australia and New Zealand will each double their representation, from 14% to 28% and from 17% to 34% respectively.

Inclusion, Not Just Diversity

The disparity between the expected increases in executive and mid-level female representation can be at least partially attributed to a “barbell effect,” in which companies focus on bringing more women into support and executive roles, often ignoring professionals and managers.

“In Europe we’re seeing [companies] bringing in women at the executive and board level because they’re forced to [often by quotas], but we don’t think it’s sustainable,” said Mercer partner Pam Jeffords. Similarly, in the U.S. and Canada companies have focused on improving diversity at the top of organizations, probably to address “regulation and heightened media attention,” as the report said.

“It’s a bit of myopia [among executives],” Levine said. “‘We’re at the top. What can we do to fix the top?'”

Programs intended to help women can fall flat because managers and executives don’t embrace new policies and work with them. “You might have diversity, but if you haven’t figured out how to include diverse perspectives, those people may not feel welcome,” Jeffords said. The result is that women leave at higher rates, depleting the already short internal pipeline for promotion and forcing companies to look outside to find female candidates.

To address gender diversity, Jeffords and Levine suggest a four-point approach:

  1. Top management must consider all levels of the company, not just the top and bottom.
  2. Inclusion must become as important as diversity if efforts are to have a lasting effect.
  3. Companies need appropriate policies and procedures and then active involvement of management.
  4. Organizations need to look deeply into their own data to understand where efforts should be applied and whether to focus on hiring, promotion, retention, or some combination.

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