The Great Debate: Quotas, Targets And Which Reigns Supreme

They’re terms you’ve probably heard thrown around a lot lately. After a handful of female politicians from the Liberal Party announced they were stepping down due to workplace bullying in the wake of the latest leadership spill, gender quotas and targets have once again become a hot topic. A number of proponents claim they are desperately needed to fix workplace “boy’s club” cultures. But politics is notoriously slow on the uptake. Over the past decade, gender quotas and targets have become increasingly more common as organisations come under pressure from board members, consumers, staff and investors to increase workplace diversity and inclusion. But what is the difference between these strategies, and how effective are they? We have your cheat sheet sorted.

Quotas

Quotas are compulsory and non-negotiable objectives that must be fulfilled by organisations, which are set by an external and authoritative body. On the plus side, businesses are penalised if they fail to meet quotas. This is likely to incentivise them to increase the diversity in their organisation. Quotas may force a wider search for candidates, increasing the talent pool. Quotas are also a more immediate way to address female representation in an organisation. Liberty Sanger, Chair of Diversity and Inclusion at law firm Maurice Blackburn, says that quotas are essential for overcoming employer bias during the hiring process.

“Quotas allow women to get to the top,” she said. “You’ve got to acknowledge that there’s structural discrimination that has been operating to prevent merit-based appointments from occurring. What a quota does is it clears a path to make sure that that is not an issue to merit getting to the top. You’re not going to see people who are not qualified being appointed, but what you are going to see is that richness of diversity that we have available at the decision making table, and making those companies a whole lot of money. All the research shows that those companies that get not only gender diversity right, but cultural diversity right, are more profitable, as well as having higher engagement scores, and are generally the sought-after companies that people want to work at.”

However, diversity quotas have a very poor trickle-down effect in other areas of the business. Studies show that quotas in Norway saw a 40 per cent increase in the number of women holding board seats, but this increase did not result in greater representation of women in other areas of the business and wage inequality persisted. Unlike targets, quotas are typically only enforced in a specific level of management, such as board membership. Opponents of gender quotas also argue they can lead to good male candidates being overlooked for a job, which disadvantages the organisation. However, proponents say that gender quotas work to correct conscious or unconscious gender biases women often face when applying for a job. Quotas may also result in women being stigmatised and seen as less qualified, tokenistic and having played “the gender card” to get the position. This damages their credibility and undermines their efforts in the workplace.

Elizabeth Corley, Vice Chair and former CEO of Allianz Global Investors, takes this view. “I think there can be unintended consequences of quotas, because the problem is you select one particular population within a workplace, and for everybody not selected, there can be a reaction which is quite negative,” she said. So you get people appointed to a position, and the question always is, ‘Did they get there because of a quota or on their own merit?’ That’s a bit of a burden for anybody to deal with.”

However, a survey undertaken by The Conversation found that such an outcome can be addressed by educating employees on whether there is a gender skill gap or gender discrimination in the sector.

Targets

Targets are non-binding, measurable objectives set at the discretion of an organisation. They can be tailored, monitored and adjusted by the company, giving them greater ownership of their gender equality goals, which means companies are more likely to meet them. Targets also promote a business-wide approach to the organisation, meaning they can be set across a number of organisational levels, resulting in the likelihood of a trickle-down effect.

Alison Watkins, Group Managing Director for Coca-Cola Amatil, said from her experience, it’s better for companies to set their own targets. “From having worked across a number of different companies, and understanding board succession, and how that works, I think it’s by far better to have each company set targets that make sense for itself, its context, its succession planning,” she said. “I feel that it would be a failure on the corporate sector if we end up with government-imposed quotas, because I do feel that it is a very blunt instrument, and there will be some organisations which should probably be striving for a greater [representation] than mandatorily imposed quotas, and there will be others who will probably need a bit more time.”

However, the voluntary nature of targets means that not all companies will set targets that will be enough to effectively bring about change, or even implement them at all. Targets also take much longer to be effective, whereas quotas work more efficiently. Similarly to quotas, targets can also lead to female employees being marginalised and viewed as tokens in the workplace, and can lead to qualified male candidates losing out on a position. Claire Braund, Executive Director of Women On Boards, said it’s important to give targets teeth when setting them.  “All of the organisations that have done incredibly well in terms of gender balance, they’ve set targets that are measurable, and they’re tied to people’s KPIs, where people are rewarded or penalised for not achieving targets.” Braund also says targets have to be realistic: “If only 20 percent of engineers who graduate are female, then you can’t have targets that say you want to have 80 per cent of all your graduate engineers to be female.”

So, What Is The Best Option?

Both quotas and targets can help advance talented women who might otherwise be overlooked for a job due to conscious and unconscious bias. But interestingly enough, the question of whether a company should adopt gender quotas or targets is a fairly straightforward one. According to researchers, the best way to achieve greater workplace diversity is to use quotas and targets simultaneously, rather than only considering one or the other.  This is because quotas and targets are mutually reinforcing: quotas create precedents for greater workplace diversity, which targets attempt to achieve voluntarily. Similarly, targets create initiatives for businesses to advance more women, which quotas can help aid. However, Braund says the key to successful quotas or targets is establishing them in each individual business unit. “You can’t have overall targets – you can’t have all the heavy lifting done by Investment and then have the IT department quietly lagging.”