Cracking the corporate glass ceiling

Barbara Klose-Hecht says she used to hit her head against Germany's glass ceiling so often, she had a constant headache.

She was the first woman to become a manager at a large construction firm after German reunification in 1990. Although better educated and more qualified than some of her male colleagues, she says she was repeatedly passed over for promotion into the top ranks of the company. After a while, she decided to leave and set up her own consulting firm. She says hers is not a unique story.

"I know a lot of women who are self-employed now because of this fact. They want to be their own boss and not have that ceiling hanging over them," she said on the sidelines of a meeting of the Business and Professional Women Club Berlin, which she heads. "But this is not what we want in the long term, because it's not a solution."

So she and many other professional women welcomed last month's announcement of a female quota for managers at Europe's biggest telecommunications company, Deutsche Telekom.

The programme mandates that by the end of 2015 one-third of the company’s upper and middle-management positions are to be filled by women. Telekom’s personnel chief said despite incentives the company had in place, not enough women were moving up the corporate ladder, especially into top management.

Besides the social fairness aspect, Telekom said the quota responds to labour market developments – 60 percent of today's university graduates in Germany are female.

"And it is also an economic necessity because studies show that teams with greater diversity simply act more profitably and achieve better results," said Anna Wenders, a company spokesperson.

The policy will apply to the entire Deutsche Telekom group, including T-Mobile in the United States and elsewhere.

Lagging behind the rest of the world

German businesswomen find themselves facing hurdles to professional advancement that often appear higher than in many other European countries and North America. Until last week, only one German blue-chip DAX company, Siemens, had a woman on its executive board. Now software maker SAP has joined that very small club by appointing a female member to its top management.

All in all, women hold under eight percent of the seats in German corporate boardrooms, half the percentage held by women at Fortune 500 companies in the United States. Of Germany’s top 200 companies, only one, IKEA Germany, has a female CEO.

"Overall, there are a lot more of women in positions of responsibility as there were 10 or 15 years ago. But on the top floor, nothing or hardly anything has changed," said Katharina Pühl, a researcher in the gender studies department at Berlin's Free University. "Something's got to give."

When it comes to paycheques, German women are also getting the shortchanged. According to the country's Federal Statistics Office, women earned 23.2 percent less per hour than their males colleagues did in 2008. The European Union average rate is 18 percent and only Estonia, the Czech Republic, Austria and the Netherlands are doing worse when it comes to compensating women.

For top management, the situation is even bleaker. A study by the DIW economics institute found the pay gap even wider among senior positions in the private sector – 28 percent.

"Germany is a conservative country and gender stereotypes are still in many men's heads, which is part of the reason for the difficulties women have," said Elke Holst, a researcher at the DIW who studies women in the workplace.

According to her, many top executives live in an all-male "monoculture" and feel that promoting a woman is a risky undertaking. Many men see women as an unknown quantity when it comes to management and if they have a family, feel they may lack flexibility and commitment to the job.

In 2001, the German government sat down with business leaders and agreed on a voluntary program to help women move up the corporate hierarchy. It didn't work.

Opposition to quotas

But steps to increase gender parity, like quotas, have hit resistance from big corporate players like Lufthansa and Siemens, who say they won't follow Telekom's lead. The BDA employers' association has also criticised the quota idea, saying decrees from on high are not the way to solve the problem.

"Rather, we should focus on changing policies that push women into traditional roles. There are a lot practical problems Germany has to tackle that stand in the way of women moving up in their careers," said the BDA's Jana Schimke.

She encouraged reforming a tax system that often favours single-earner households, increasing childcare facilities and lengthening schools that currently let pupils out at noon, which all make it difficult for mothers to balance kids and career.

German Family Minister Kristina Schröder has said Berlin would take steps to promote women in management, although no law mandating quotas is under consideration right now.

Several of Germany's European neighbours, however, are moving in that direction. Norway already has a strict quota law, and France, the Netherlands and Spain are in the process of drafting similar legislation.

"Germany needs these kinds of laws," said Klose-Hecht of the women's business association. "Otherwise it will probably stay like it is right now for another thousand years."