WATER KNOWLEDGE NOTE Women in Utilities: A Driving Force for Workforce Modernization A Case Study of Three Utilities in the Danube Region An increasing number of private and public companies are realizing that narrowing workplace gaps in both pay and at all levels of responsibility between men and women is good for business and development. A 2017 McKinsey study of more than 1,000 companies around the world found that those who ranked in the top quartile for gender diversity on their executive teams were 21 percent more likely to experience “above average profitability” than companies in the bottom quartile.1 Diversity at the top of an organization can lead to better decision making and governance,2 and gender-inclusive companies—including utilities—can better reflect the needs of a diverse set of consumers.3 An OECD study on the public sector of 26 countries in the European Union found that workforce diversity can result in both economic and social gains, including improvements in efficiency, public service quality, policy effectiveness, and social mobility.4 In the Danube region, utilities often face a predominantly © SeventyFour/iStock male and sometimes aging workforce. However, gender gaps in tertiary education are closing, including programs in science, technology, engineering, and mathematics. None of the utilities had any women sitting on their For the water sector, creating an environment with equal governing boards. opportunities for men and women at all levels of respon- sibility should therefore be an integral part of every util- At the upper and top management levels, Brasov and ity’s modernization process. At the same time, European Prishtina showed low levels of female representation; Tirana Union member countries are adopting legislation to did better, with women representing almost a quarter of its ensure diversity and equal pay; for example, Directive upper management staff. Tirana also demonstrated a prom- 2014/EU/95 requires companies with over 500 employ- ising pipeline of future women leaders thanks to a mid- ees to report on diversity in their Board of Directors. dle management team made up of more than 50 percent women. Beginning in 2017, the Danube Water Program and the World Bank Global Water Security and Sanitation Part- In terms of career trajectory at the operational level, male nership collaborated with three pioneering utilities in the staff were more likely to be promoted than female staff at Danube region to take a closer look at gender equality in all three utilities, (see figure 2) and men were more likely their workplace: Brasov Regional Water Utility in Romania to be recruited to junior management positions. Men were (859 employees); the Prishtina Regional Water Utility in systematically more likely than women to be promoted at Kosovo (529 employees); and the Tirana Water Utility in all levels. In general, few career transitions occurred during Albania (1,181 employees). the assessment year, and in fact not a single promotion occurred at Prishtina and Tirana to middle, upper, and top These utilities participated in a comprehensive gender assess- management positions. ment survey using the Economic Dividends for Gender Equality (EDGE) methodology, which provides an inter­ Effectiveness of Policies and Practices national benchmark for gender equality and allows compa- While all three utilities demonstrate some degree of pro- nies to obtain a global certification (http://edge-cert.org).5 activeness when it comes to equal pay for equivalent work, there is still room for improvement in this area. In The assessment focused on four areas that determine particular, the assessment found that none of the three success in gender equality, including: companies had formulated a specific policy on the issue of “equal pay for equivalent work.” No gender pay gap assess- a gender balance at all levels of the organization; 1)  ment is routinely done by the utilities, although this measure 2) a solid framework of effective policies and practices to was introduced by Brasov for the first time as a result of the ensure equitable career flows for both women and men; employee perception survey’s findings. In addition, none of an inclusive culture as reflected in employees’ high ratings 3)  the three utilities had set targets or objectives for gender in terms of career development opportunities; and representation at any management level, and neither Brasov equal pay for equivalent work for men and women (only 4)  Water Company nor Prishtina Regional Water Company for Brasov). take gender into consideration in their success planning. The results show that while all utilities have their individual On the other hand, all three companies stated they have strengths and weaknesses, there is wide scope for improve- flexible promotion practices, do not require geographical ment toward optimal performance through human resource mobility, and allow for career breaks; these are all prac- practices that foster a more gender-inclusive workforce. tices that can support the retention and career transitions of women. Performance evaluation processes could be Main Findings improved in all utilities, including mechanisms to identify high performing staff and provide them with leadership The Talent Pipeline development training. While women staff at all three utilities held more than a quarter—sometimes even over half—of junior management Because non-discrimination with regards to professional positions, the utilities all missed the benchmark for retaining development is demanded by the law in Romania and women in top management positions, as per the EDGE inter- Albania, neither Brasov nor Tirana had formulated a spe- national standard for gender equality (see figures 1 and 2). cific policy in this respect. When it comes to mentoring and WATER GLOBAL PRACTICE 2 Figure 1. Breakdown of Staff Positions by Gender TALENT PIPELINE Gender composition Operational functions Brasov Water Junior Middle Upper Company 30% management management management Top management 25% 7% 20% 0% 93% 100% 75% 80% 70% 12% Prishtina Women Regional Water 26% 17% 0% 0% Men Company 74% 83% 100% 100% 88% 15% Tirana Water 48% 48% Utility 24% 17% 76% 83% 52% 52% 85% Source: World Bank-supported Edge Assessment 2018. Figure 2. Tracking Promotions by Gender CAREER TRANSITIONS Promotions Regarding promotions, men were systematically more likely to be promoted compared to women at all levels where promotions were made across all three utilities. At Brasov Water Company, men were more likely to be promoted from the first three levels of responsibility while at Prishtina Regional Water Company and Tirana Water Utility, promotions were only recorded from the operational level. Operational functions Junior management Middle management Upper management Top management Brasov Water Company Prishtina Regional Water Company Tirana Water Utility Women more likely than men to make this transition = New hire = Exit = Promotion = Stay in same position or lateral move Women and men equally likely to make this transition Men more likely than women to make this transition No transitions Source: World Bank-supported Edge Assessment 2018. WATER GLOBAL PRACTICE 3 sponsorship, however, none of the utilities reported formal figure 4). Additionally, only 31 percent of women employees mentoring programs for either men or women employees, at Brasov believe those equal opportunities continue when and access to career-advancing opportunities tend to be it comes time to promote (versus 50 percent of men). handed out on an ad hoc basis. Female respondents in all three utilities were less optimistic The survey found that while flexible working practices than men when it comes to being given fair opportunities for were mostly used informally, there were some good examples promotion. When it comes to being paid fairly for the work of such practices, especially when initiated by staff them- that they do compared to others in the utilities, employees selves (for example, the organization of weekend shifts were slightly more negative across the surveyed utilities. In all in Prishtina’s laboratory, a unit that employs a significant cases, the assessment revealed a notable gender gap in percep- number of women). This highlights a need for more formal tions, with men being more optimistic than women about and transparent policies in addition to supportive measures questions concerning equality in pay and opportunity. In allowing for flexible working patterns to fit the needs of dif- the case of Brasov, such negative perceptions led to the com- ferent employees at different times in their careers. Both pany carrying out a gender pay gap analysis. It turned out Brasov and Tirana, however, do offer childcare support, and that perceptions about equal pay for equivalent work were Brasov also offers paternity leave. A summary of effective actually unfounded, with the unexplained6 salary gap tilted human resources policies and practices as assessed by the 13 percent in favor of women, further reduced to 5 percent EDGE standard is included in figure 3. when bonuses were accounted for. This discrepancy between perception and reality highlights a need for clear, consistent, Employees’ Perceptions of an Inclusive Culture and transparent communication with employees. The analysis included employee perception surveys at all three utilities. Half or more of employees at all three utilities Perceptions of professional opportunities varied by age, with believe that women and men are given the same opportu- younger and older employees in all three utilities (under 28 nities when it comes to hiring, though men are notably and over 50) holding a more favorable view about their more positive about these opportunities than women (see promotion opportunities. Younger employees were gener- Figure 3. Measuring Human Resource Management Policies THE EFFECTIVENESS OF POLICIES AND PRACTICES Comparison across countries Comparing the e ectiveness of polieis and practices, the utilities meet the EDGE standard in none of the five areas of analysis. Brasov Water Company Prishtina Regional Water Tirana Water Utility Company Equal pay for equivalent Equal pay for equivalent Equal pay for equivalent 50% work 50% work 50% work Recruitment and Recruitment and Recruitment and 55% 33% 55% promotion promotion promotion Leadership development Leadership development Leadership development 30% training and mentoring 40% training and mentoring 60% training and mentoring Flexible working 38% Flexible working 19% Flexible working 44% Company culture 25% Company culture 17% Company culture 58% 65% 65% 65% Note: The dotted line at 65% indicates the minimum percentage to be reached in each area, in order to meet the EDGE Standard. The color of the horizontal bars indicates whether your score is below 65% (red bars) or above 65% (yellow bars). Source: World Bank-supported Edge Assessment 2018. WATER GLOBAL PRACTICE 4 Figure 4. Breakdown of How Staff Perceive Hiring Opportunities by Gender INCLUSIVE CULTURE I believe that women and men are given the same opportunities to be hired by this company More than 50% of men and women across all three utilities consider that women and men are given the same opportunities to be hired with the exception of women at Brasov Water Company where 49% of women answered positively. A notable gender gap in perceptions is to be noted across all three utilities with men being more optimistic than women on this question. Prishtina Regional Water Brasov Water Company Company Tirana Water Utility Agree + 49% 69% 87% Strongly agree 83% 68% 95% 21% 7% 9% Neutral 9% 4% 13% 31% 24% 4% Disagree 19% 8% 0% Women (189 respondents) Men (227 respondents) Women (42 respondents) Men (214 respondents) Women (241 respondents) Men (258 respondents) Source: World Bank-supported Edge Assessment 2018. ally more optimistic than their older counterparts when In addition, they have been sharing their experience with asked if women and men are given equal opportunities to other water utilities in the region through various knowl- be hired by their utility. In Brasov Water Company, for edge exchange events, which always lead to lively debate example, three quarters of younger employees surveyed and discussion. This is a topic of great relevance to utility agreed that both men and women are given equal opportu- staff and sector professionals. nities, while only half of those aged 39-48 shared that view. Finally, the Danube Water Program’s D-LeaP7 is planning There were differences in perceptions about opportuni- to launch a course for utility managers that will include ties for promotion, with those under 28 again being more a module on diversity and gender equality within human optimistic than older, mid-career employees. On the other resources management. This is reflecting a growing industry hand, younger people were less inclined to believe that awareness that managing human assets is equally important they are being paid fairly compared to others doing a simi- as managing physical assets. lar job in the utility. Satisfaction with perceived pay equity rose with age in all three utilities. In Tirana Water Utility, These developments mark an important transformation for example, 64 percent of younger employees thought in the region’s water and sanitation sector, from one their pay was fair, compared to 88 percent of employees where diversity considerations were not discussed to 59 and older. one where utilities are actively seeking a better under- standing of how they measure up, and how an inclu- Going forward sive and gender-balanced workforce can lead to better utility management. With the transformation of utili- The assessment concludes with several recommended actions, ties and a new, incoming workforce of younger men including three priorities identified by the utilities them- and women, there is real potential to enact substantive, selves in a peer-to-peer workshop (see table 2): lasting change. Such change, however, has to start with an in-depth understanding on gender dynamics in the Conducting yearly gender pay gap assessments; 1)  workforce, awareness raising of these issues within top Improving the transparency of the promotion process 2)  management, and a long-term focus on strengthening and promotion criteria; and gender inclusive human resources practices. These objec- implementing a systematic procedure to identify top 3)  tives much become an essential part of a utility’s vision talents. and business plans. WATER GLOBAL PRACTICE 5 Table 1. Gender Assessment Key Findings across Three Participating Utilities Source: World Bank-supported Edge Assessment 2018. WATER GLOBAL PRACTICE 6 Table 2. Selected Actions Going Forward, by Utility A. Tirana Water Utility B. Prishtina Regional Water Company C. Brasov Water Company Source: World Bank-supported Edge Assessment 2018. WATER GLOBAL PRACTICE 7 Notes 1. https://www.mckinsey.com/business-functions/organization In Brasov and Tirana the analysis also looked at the age profile 5.  /our-insights/delivering-through-diversity of utility staff. 2. https://hbr.org/2017/08/what-11-ceos-have-learned-about The unexplained gender pay gap means that pay differences are 6.  -championing-diversity not explained by factors such as age, years with the company, management role, level of responsibility, type of job function, but 3. https://iwa-network.org/publications/untapped-resource-gender are likely to be explained by gender. -diversity-water-workforce/ 7. https://www.d-leap.org. 4. https://www.oecd.org/gov/2015-oecd-recommendation-of-the -council-on-gender-equality-in-public-life-9789264252820-en.htm Connect with the Water Global Practice www.worldbank.org/water worldbankwater@worldbank.org   @worldbankwater blogs.worldbank.org/water © 2019 International Bank for Reconstruction and Development / The World Bank. 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