Increased Profitability Through Gender Diversity

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Gender Inequality in Business is NOT Generational – witness UBER.

Recently I conducted a Genderversity™ training session in a large international technology firm. In the audience was a confident female Gen-Yer who was considered a leader within the company, and she stated the following: “… in my opinion, gender inequality and sexual harassment is just a generational issue”. She went on to say that sexual harassment and discrimination were a thing of the past in her generation (that is to say anyone born after 1990). When probed as to why she thought this way, she added that it was the older business men who have been accused of several counts of sexual harassment and discrimination (and when you think of some of today’s headline news, Donald Trump, Bill O’Reilly, and Bill Cosby would be considered “old” by her definition). She believed that the businessmen in her generation and in coming generations behave differently around women than their predecessors. In her mind the mistakes made in previous generations regarding inappropriate sexual behavior had since been mitigated.

A laudable argument, but objectively incorrect.

The meltdown of Uber - the most successful technology start-up ever, with an estimated market valuation of $40 billion based on a recent Inc. Magazine report - indicates that sexual harassment is clearly NOT a generational issue. The median age of an employee in tech-related companies is only 30 years old (based on a study from PayScale) - technically millennials. Uber is a millennial company; has millennial leadership; and millennials are the most enthusiastic Uber adopters according to Felim McGrath of the globalwebindex.

Uber has been the subject of extreme public scrutiny lately due to several instances that indicate a toxic corporate culture for women, throughout the entire Uber organization. Indeed, in February of 2017 Uber brought in the heavy-hitters to help solve their sexual harassment problems by hiring former U.S Attorney General Eric Holder (can’t even begin to imagine what that cost but “A” for effort right?)

To give an indication at how deep the problem runs, witness David Bonderman, an Uber board member who, in the midst of a June announcement of the findings from a sweeping sexual harassment investigation, made a joke about gender stereotypes, adding even more fuel to claims of a toxic culture. He resigned within the week.

We have no idea of the direct economic cost yet of settling Uber’s sexual harassment lawsuits (although personally I would advise the CFO to put a big, fat, liability accrual on the balance sheet; Uber, and other companies who operate like them are sure going to need it). The Equal Employment Opportunity Commission reports that American companies paid out $40.7 million in 2016 alone to remedy charges of sexual harassment, meaning these were payments to women who went to HR to report incidents and were largely ignored.

With the ever-growing media focus on women and women’s issues (including but not limited to sexual harassment, pay gaps, etc.) companies must make gender inclusion and diversity a strategic imperative. The result of this would lead to the prevention of sexual harassment and discrimination claims (and therefore the multi-million dollar payouts), all of which negatively affect profitability.

You can “hope” that what happened at Uber is not happening where you work. You might not see a sexual harassment lawsuit, but the facts point out that many companies will. 1 in 3 women report being sexually harassed in the workplace, the EEOC reports that 74% of all claims to them come from women, and largely involve sexual harassment.

“Hope” is not a strategy. A proactive approach to gender and diversity inclusion is a strategy and is necessary to properly address sexual harassment and discrimination in the workplace.

If you feel that gender diversity is not a priority in your workplace, Genderversity™ is here to help. Please contact us for more information.