Credit: David Goehring/Flickr

Japan is paying companies to promote women - but none are taking the money

Subsidies to try to improve the gender balance at the top of business aren't working in the land of the rising sun.

by Adam Gale
Last Updated: 16 Oct 2015

The absence of women from decision-making roles remains a sore point for any society that professes gender equality. Everyone seems to agree that the ratio of male to female executives ought to be more balanced than it is, but that’s still not translated into sufficient action so far.

In Britain, solutions have ranged from mandatory gender pay reporting (the name and shame approach) to setting board room quotas (the do what we say approach). Yet, while British businesses have packed their boardrooms with women NEDs to meet the 25% informal-unless-you-don’t-do-it female director target set by the Davies Review, the proportion among executive directors remains woefully low.

There are only six female FTSE 100 bosses, after all, and as of last year only around 9% of British executives were women.

The Japanese government found a different solution to their own, much more pronounced problem (the pay gap there is a whopping 30%, twice what it is here) – subsidies (the bribery approach). In April last year, the country’s health ministry said it would pay small and medium-sized businesses for appointing women to for training them for senior roles.

The ministry expected applications from about 500 firms. As of this week, it had received precisely none. This is somewhat less surprising once you learn that the budget for the entire programme was a towering ¥120m (£660,000), with individual awards being worth up to £1,650.

As bribes go, that’s fairly pathetic, but times are hard in Japan - perhaps that’s all they could spare. Is that the only reason the plan didn’t work though? (In a fit of refreshing candour, a Japanese health ministry spokesperson did admit it was also ‘not a good programme’ due to the stringency of its eligibility requirements, but we’ll look past that for now.)

The problem with any scheme designed to improve the gender pay or leadership gaps rapidly is that careers take years to develop, not months. It’s all about managing expectations and the ‘pipeline’, as management consultants like to say.

For many years and for various reasons (most of them stupid), women have been less likely to get promotions, meaning fewer now have the necessary experience for the most senior jobs. A few thousand pounds or an appeal to fairness won’t change that when it comes to weighing up recruitment options.

This isn’t to say that top-down schemes like this can’t work. Indeed, they could help get more women into the pipeline, but that won’t translate into anything meaningful at the top level for several years. Regardless of the merits or otherwise (and this is clearly still a matter of great debate) of a quota or indeed subsidy scheme to get things moving, it can’t be expected to change things overnight.

For the time being, Japan is pressing on, making the subsidy easier to get and doubling the pay-out for certain firms (lucky them). Whether it will work remains to be seen, but somehow it seems unlikely to catch on over here - unless George Osborne has a sudden change of heart over that whole austerity thing. Better not hold your breath, eh.

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