Five ways to finally close the gender gap in Japan

At the World Economic Forum Annual Meeting in Davos in January, Prime Minister Shinzo Abe personally committed to closing the gender gap and making Japan a place where women shine. Substantial challenges lie ahead. Japan’s current performance on gender parity is sobering: in the Forum’s Global Gender Gap Report 2013, Japan ranked 105 out of 136 countries. There are three areas, in particular, where Japan is falling behind.

First, the participation gap: Japan has one of the lowest female labour participation rates among OECD countries. Only 63% of women work, compared to 85% of men; female employees are more than three times as likely as male employees to work part-time. Goldman Sachs estimates that closing the participation gap could boost Japan’s GDP by 13%. It is especially necessary given the country’s demographic outlook – the labour force is shrinking, the old age dependency ratio is growing and the fertility rate is one of the world’s lowest.

The second gap that needs to be addressed is the remuneration gap: on average, women earn only slightly over half of what men earn. This can only partially be explained by women working disproportionately in lower-paying professions; Japan ranks 87th globally in wage gaps for similar work, according to a survey of executives.

Finally, there is the advancement gap: while women comprise nearly half of all professional and technical workers, they make up only 9% of legislators, senior officials and managers. Encouragingly, investments already made in closing the education gap – women’s rate of enrolment in tertiary education now nearly matches that of men – mean that Japan is ideally poised for efforts to close the advancement gap.

Many corporations in Japan now see action on gender diversity as a reputational necessity. Others see it as a strategic priority, as diversity fuels innovation and improves insights into consumer behaviour. There is clear evidence, for example – both globally and in Japan – that corporations perform better with greater female participation in senior management.

Currently, however, only 2% of corporate board members and fewer than 1% of executive committee members in Japan are women. If companies want to see more women at the top of the corporate hierarchy, how can they address the cultural and organizational barriers that presently stand in their way? Based on our research, here are five areas to focus on.

1. Work environment and work-life balance. It is at around 30 years of age that the gender gap widens most noticeably – the age at which many employees are offered their first junior management roles, and at which many women are starting families.

The “hard” interventions to prevent women from dropping out of the workforce are often in place: 98% of corporations offer parental leave, and most offer either flexible hours or some other kind of work-life balance programme. These include remote working, subsidies for childcare or on-site childcare facilities.

Nonetheless, more communication is needed about these policies to boost their use and acceptance, and to ensure that this does not have a negative effect on career progression.

2. Awareness and training. In contrast, “soft” interventions are much less common. Only one in six companies offers mentoring specifically for women, which can be important for their career progression.

More broadly, training is needed for both women and men to build the right environment among employees for women to successfully lead – becoming aware of unconscious biases and valuing an organizational culture of diversity and gender sensitivity. This area needs to be nuanced in execution, but is critical for success and offers rich opportunities for industry-wide and cross-sector collaboration.

In Japan the role of human resources is perceived as being focused more on systems and administration than talent development and training. HR and other managers could benefit from focussing on attracting, retaining, managing and promoting female talent.

3. Measurement and target-setting. In hisaddress at Davos, Prime Minister Abe set a target of having 30% women in management by 2020. Explicitly setting achievable diversity targets in an organization is an important way of closing the gender gap, although currently uncommon among companies in Japan.

Targets can also have an effect beyond the organization, for example by prioritizing female-led businesses when identifying potential suppliers.

4. Leadership and company commitment. One of the most important factors in gender diversity is clear leadership from the CEO and top management, but only 23% of Japanese companies say they have such top-level commitment. Vocal commitment from top leadership is critical for changing the culture and ensuring that measures to promote gender diversity are accepted and implemented. Organizations can also show leadership externally by, for example, building gender sensitivity into their philanthropic activities, supporting gender-focused civil society and public-sector initiatives, and ensuring that their advertising is respectful of women.

5. Incentives and accountability. It is critical to “de-bias” recruiting and evaluation processes, especially in supporting women at an early stage in their management careers and recruiting women who have had a break in their careers. There must be mechanisms in place to ensure diversity targets are measured and met, as well as transparency about recruitment and promotion processes and salary bands.

These five recommendations are not a checklist of independent actions, but manifestations of a holistic approach. The environment and timing are right not only for such company-level initiatives, but also for the bold launch of cross-cutting, industry-wide analysis and action.

It’s particularly critical that companies which are meeting gender parity targets share best practices, and that we encourage public-private dialogue on the kind of mechanisms that boost women’s economic participation, whether in smaller or larger companies.

The World Economic Forum’s Japan Gender Parity Task Force aims to serve as a platform for such dialogue, engaging business and the public sector, but also media, academic experts and civil society representatives. With momentum gathering to address impending talent shortages, Japan’s business leaders have a unique opportunity to take the lead in transforming the country’s economy and society by making gender diversity a reality.

Author: Saadia Zahidi is senior director, head of Gender Parity and Human Capital, at the World Economic Forum.