Nestlé: People Analytics and Gender Equity
Nestlé has started an interesting and powerful analytic approach to achieve gender equity.
The article “How Nestlé uses People Analytics to Measure Gender Pay Gap and Equity” explains the company’s effort to leverage data and analytics to measure gender pay gap and equity. The company initiated the project after the CEO made statements at the United Nations and the International Labor Organizations that they are taking diversity and inclusion really seriously. The team led by Jordan Pettman, Global Head of People Analytics at Nestlé, has developed a model using R to understand pay and made it accessible to everyone by building a front end that enables someone that isn’t familiar with analytics. Pettman is very confident about the approach and thinks that “it’s a really powerful demonstration of the fact that approaching these problems in an analytical way enables non-analytics people to really have genuine impact, both on the business, given that this is a real business initiative, but on people”.
In my opinion, this is a great initiative for several reasons.
- Visualize the gender inequality issue
One of the biggest issues in solving gender inequality at workplace is people’s ignorance or push back saying that there is no such inequality. Even when many women are saying that they are not treated equally, some people just don’t listen or even say that it is women’s fault because women are not working as hard as men. The beauty of having data here is that data can support the argument that women are not treated equally. With data, the argument becomes a “fact”.
- Enables companies to think about what to measure
Having people analytics in this space is also effective in forcing companies to think about how they should measure their progress in terms of gender equality. It is so prevalent in many companies that they only say what they have done (e.g., unconscious bias trainings) but do not track the specific metric they are trying to improve on.
- Clarifies the goal
When companies have to think about the metrics, it also forces them to clarify their goal in terms of gender equality. Are we trying to increase the number of female managers? Or are we trying to achieve equal pay? Being very specific on the goal is key to make a difference.
- Keep people accountable
When there is a clear goal and clear metrics, it makes people accountable. Many companies have been talking about gender equality for such a long time but haven’t made much progress because no one is seriously responsible for it. These metrics should not be just for HR but for senior executives and managers across businesses.
Any considerations?
YES. There are many considerations we have to be aware of when using analytics to achieve gender equality. Firstly, data itself can be biased. For example, when we use evaluation data, the evaluation data itself can be biased because of the informal process or unconscious biases etc. We need to be very careful about these embedded biases. Secondly, if the data are biased, building a model out of such data will further accelerate the biases. Having a biased model is dangerous as it may encourage some of the behaviors companies are trying to get rid of. Third, before conducting any of these analytical activities, it is critical that senior management, not just CHRO but CEO, must be 100% supportive of the initiative. Otherwise, the analysis would be run just for the sake of analysis and the implication would never be implemented to have an actual impact.
Thanks for sharing, this is really insightful! I think the idea of using it for this kind of measurement and visualization helps avoid the risks that often come with using people analytics for modelling etc., and illustrate how much can be done just by making the data available to people in tangible, easily understood ways.
Also totally agree on the point of visualization and transparency to help combat this issue. Giving people the data not only helps the issue be understood, but also empowers people to have challenging conversations about salary without relying on anecdotal or private evidence.
This is a great initiative indeed. Totally agree that visualizing the effect and showing the non-analytics people the current situation is definitely a good starting point. Data-backed arguments are stronger and carries greater weight in conversations, at the same time, visualization helps people see the clearing picture as well as the magnitude of the situation. It also caters to the human nature that prefers pictures over texts, which is why infographic posts perform so much better in conveying information than plain text.
Though I wonder, for initiatives like these, is it possible for the efforts to be bottom-up rather than top-down? What would it take to have employees raise the issues and result in measurable action with tangible impacts, instead of waiting for the c-level executive to start a company-wide initiative?
Thanks Korn for an interesting question. I personally feel that this have to be a top-down initiative. First, when the top executives do not support this type of “not-revenue-generating” project, it tends to fail because people become less accountable. Also, since this type of project will basically visualize the discrimination in the company, if the top executives are not engaged fully, they would just try to protect themselves and the company by not agreeing on the outcome.
Having said that, I also think that people could do this bottom-up. In this case, the first thing they should do is to get buy-in and full support from the senior managers or executives. Also when they roll this out, the narrative and positioning of the project would matter a lot. Instead of putting this as “helping discriminated groups”, they should put it in a way that it sounds beneficial for everyone (e.g., “improving the company’s culture”).
I really enjoyed reading this, Kanako – it’s important, insightful, and timely. There’s two things that came to mind.
First, I tend to notice typical responses on this topic in the context of the United States as “this is a thing of the past and it doesn’t happen anymore.” Sure, we’re making progress in addressing this issue but we’re not even close. For instance, there are women dominant companies in certain industries that do not get paid as much as men in the same industry. Case in point: Megan Rapinoe and the U.S. Women’s National team. To make this short, in my opinion, this is a systemic issue that needs collective action from every executive.
Which leads to my second point, in that aligning culture with strategy, it can play a large role in addressing this issue. Traditionally, businesses have forgotten the importance of culture and put strategy first (naturally, right?). Well, that’s just not the case. Look at Starbucks for example – their focus has always been on atmosphere and culture, and not about their coffee. If you start with culture, you will be surprised how well it aligns with strategy. And that’s the line of thinking that needs to be trickled down to the bottom. It must start from the top – they have the authority to make changes.
Great article! I think (to the points above) this is an issue very hard to prove graphically as it involves nuance and isn’t necessarily apples to apples. Alfred brining up Megan Rapinoe is super appropriate to prove that measuring men versus women cannot be considered in a vacuum (ie men’s soccer team revenue versus women’s soccer team revenue) because the initial investment in the men’s soccer team is so much greater. Anyway, love that Nestle is using R in this way, and hopefully over time, the findings will prove more and more useful!
Great point, Kanako! Something I experienced in a previous company was their counting of female workers as a whole company versus identifying where in the organization chart their roles were. The company claimed to have a significant female participation but I was only 1 of 2 women in the entire executive management team and most of the women were in the more available assistant level positions. This lead to most internships or junior hires for the higher paying roles going to mostly men without any true effect to the tracked gender balance. By being more transparent about what their metrics actually measured would have helped uncover (although it wasn’t a secret to management) the gender imbalance, pay gap and opportunity gap that existed.
Great article!
I think this is a important initiative especially in this era. As people are commenting mostly on the positive sides, let me address the concerns of this point: we need to make sure that the gap is due to inequality, but not competency. For example, if they are taking an survey, it needs to stand on the basis that all woman employee are honestly answering the survey (i.e. not blaming on gender equality the consequences of their lack of performance). But the difficult point is, if the culture itself is men-oriented, you could kind of make an argument that the lack of performance is due to culture…