Gender targets won’t help women break open the boys’ clubs. Here’s what will

In the wake of the rapid culling of diversity, equity and inclusion programs in the US, many will be wondering whether Australian corporate commitments to gender diversity will also prove to be fickle. On January 20, Donald Trump signed an executive order terminating “all illegal DEI mandates, policies, programs, preferences, and activities in the federal government, under whatever name they appear”. Certainly, the seeds of backlash exist here: the 2024 International Women’s Day Ipsos survey found 46 per cent of Australians agreed that “we have gone so far in promoting women’s equality that we are now discriminating against men”.

“Gender inequality” is what happens when employers don’t adequately recognise, ripen, retain or reward assets when they appear in female form.Credit: Dionne Gain

As we mark International Women’s Day 2025, it is easy to see how common diversity practices can foster resentments. Anti-bias training is perceived as implying prejudice. Gender targets, designed to incentivise looking outside a narrow promotion pool, can be seen as encouraging managers to put identity ahead of merit. Development and leadership programs intended to help women enhance and promote their skills are seen as perks offered to some employees but not others.

Nor is there good evidence that these practices are effective in promoting equality. In my forthcoming book, Patriarchy Inc., I offer an explanation of why diversity programs so often fail: economists have had too much sway in shaping how we understand the problem, and therefore how we try to solve it.

Economists think of us as individual bundles of job-relevant skills and experiences, who seek out the jobs that best match and compensate that human capital. “Gender inequality” is what happens when employers don’t adequately recognise, ripen, retain or reward assets when they appear in female form. But organisational life can’t be understood in terms of self-interested individuals bargaining in rational markets. We operate inside organisations that have norms, values, assumptions and histories, and as members of groups who look out for each other’s interests.

Consider that, all else being equal, female financial advisers who commit misconduct are 20 per cent more likely to be fired than their male counterparts, and 30 per cent less likely to find work afterwards, according to an analysis of data from the US financial industry regulator. This “gender punishment gap” was bigger in companies with fewer female managers, suggesting favouritism towards members of the male in-group as the cause. The same pattern of disadvantage was seen for men from ethnic minorities.

The lesson here is not simply that, if you are planning to swindle your clients, it is best to be a white man. It’s that favours tend to flow along networks of people who are demographically similar. That points to the importance of fostering contact and collegiality across the divides of gender and race, rather than singling out identity groups for exclusive development or mentoring programs.

For example, as sociologists Frank Dobbin and Alexandra Kalev explain in Getting to Diversity, one effective way to increase diversity in management is through “cross-training” – rotating workers through various jobs and departments, such as mostly female bank tellers being given the chance to learn how to initiate loans. The idea originated as a way to improve workplace performance. But because jobs are often strongly patterned by sex and race, cross-training effectively increases diversity in management “by giving staffers exposure to a wider range of jobs and people, a basic resource for promotion”.

A second key to understanding and fixing workplace gender inequality is the insight that jobs don’t spring fully formed from a pre-existing mould. They are curated by those with the power to define job attributes, often in self-serving ways.

An illustrative example comes from a study that interviewed senior managers of Australian residential and community aged-care organisations, before the 2021 royal commission into the sector. The interviewees characterised their mostly female and newly arrived migrant carers as primarily motivated by compassion rather than money. Happily for wage budgets, the emotional rewards of caring were assumed to compensate for the low pay. No less conveniently, the same managers referred to aged-care work as being skilled when the topic of the interview was quality of care, but unskilled when it turned to pay grades.

Gender targets won’t help new mothers working in finance stay competitive.Credit: iStock

Who gets paid what is the result of “flesh-and-blood human beings negotiating organisational life”, as sociologists Dustin Avent-Holt and Donald Tomaskovic-Devey put it. These negotiations take place in settings in which some groups hold better bargaining chips than others. Powerful groups can maintain systems and norms that benefit them at the expense of others, including even the very institutions they are meant to serve. In male-dominated areas of finance, sociologist Olivier Godechot found that tacitly asserted “property rights” over clients, teams and products are leveraged in endless politicking, giving rise to companies being forced to provide bonuses inflated well beyond what market logic would predict.

Another study found that this practice of client ownership also screws mothers who, if they go on parental leave, risk “losing” the clients they need for career advancement and the same outsized bonuses enjoyed by their male peers. As one male financial broker pointed out, if the banks “owned” the clients, it would be better for clients, who would always be taken care of, and better for individual bankers of either sex who occasionally needed to be away from their desk to care for family, recuperate from illness, or simply have a rest – a.k.a. being human.

Gender targets won’t help new mothers working in finance stay competitive. Generic anti-bias training won’t bring about better wages for the female-dominated aged-care workforce. (That achievement belongs to the Health Services Union and the Fair Work Commission.) Women’s leadership programs won’t stop the boys’ club from looking for outsiders to scapegoat.

But we shouldn’t abandon diversity efforts. Instead, we need to look carefully at our organisations through a lens that illuminates, rather than obscures, how inequalities come about.

Cordelia Fine is the author of Patriarchy Inc., which is published this month, and a professor at the University of Melbourne.