Changing the German Economy by Moving More Women into Management

The debate in Germany about how to shift more women into leadership positions in the workplace has gone on for years, but progress has been stagnant. Middle management is often the end of the road for women, and most of those with children never return to full-time work at all. But the benefits of a shift are clear. A stronger role for women in Germany’s labor market—and women working more hours per week—could raise the country’s aggregate value by 8%, or around €200 billion. Why has it been so difficult to increase diversity in management, and what can be done to strengthen the role of women?

A Degree Is No Guarantee

Education is not the problem. Today, women comprise more than half of Germany’s university graduates, but there are proportionally fewer women in managerial positions than there were 20 years ago. Qualifications are not the issue, either. From 1994 to 2014, the share of German female university graduates with at least ten years of professional experience rose by an average of 2.4%.  Because there are more university graduates overall, the number of managers per graduate is declining—but on average, it is sinking much faster for women than for men. And the trend of underrepresentation at the top is consistent across industries—especially in the financial industry, where women make up the majority of employees (55%), but only 27% of them manage others and only 11% of the top positions are held by women.

A major obstacle to progress is a system that does not encourage women sufficiently when they return to full-time positions once family responsibilities recede. In addition, there is a lack of high-quality jobs that offer a flexible, family-friendly schedule. The search for the best method to combine family and career continues, but the fact is that women without children have a better shot at promotion—and they’re three times likelier to end up in managerial positions. The most relevant phases in career development and family overlap—and when women reduce their hours after maternity leave, they often never return to full-time work.

Cultural Barriers

In a BCG survey of 36 large companies in Germany, managers cited the difficulties of combining family with work as one central barrier to women’s promotion to management. But they also blamed male-dominated company culture for stopping women on their way up. We have identified four areas of action that companies can take in order to implement sweeping cultural change and better tap the potential of women in management:

1. Make cultural norms explicit. Raise awareness of gender bias, make visible both men’s and women’s contributions to the company’s success, and sensitize all employees to the topic of gender diversity.

2. Establish the structural basis for change. Design measures that focus on the recruiting, retention, and development of women. Retention strategies should include models for flexible working hours and locations, which will reduce the temptation to shift to part-time.

3. Place agents of change on a pedestal. Members of top management must serve as role models for the desired diversity.

4. Measure and adapt. Set concrete targets for diversity and forge a link with company strategy. Continuously communicate to employees about progress made, putting a spotlight on good practices.

If companies truly want to profit from the diversity of their people, they have to use gender as a strategic competitive advantage and anchor it deeply in their company culture. When Germany makes better use of the potential of women in its employment market, the entire economy will profit—from women working more hours per week, working in more productive industries, and doing jobs that match their qualifications. As a result, the country’s prosperity will rise dramatically.