Why Gender Matters when Doing Business in Germany

Matthew MacLachlan

9 Apr 2013

According to statistics provided by the European Commission, the percentage of women in leadership positions is only 13% in the 30 companies listed on the German stock index. The fact that the majority of university graduates are female emphasises that a lack of capable women is not the problem. Recent debates about the introduction of a gender quota to tackle the under-representation of women highlight the complexity of the issue and make evident which problems business women in Germany are confronted with.

One of the most prominent opponents of a fixed gender quota is the German minister of family affairs, senior citizens, women and youth, Kristina Schröder, who believes that a fixed quota won’t solve the problem. In an interview given to the German news magazine Der Spiegel she argues for a flexible quota that companies set themselves and talks about a set of other measures to promote the number of women in high-rank positions.

Schröder, most prominently known for being the first minister to have a child and take maternity leave during her term of office, states the importance of adapting working conditions and changing laws to enable the combination of work life and family life. According to the minister, the main reason for women’s under-representation in leadership positions is the fact that senior managers are expected to spend up to 80 hours a week at work. Offering part-time positions as well as more flexible work schedules are two means of countering this problem. This is, however, not the only reason that holds women back. In a survey by the McKinsey Global Institute, lack of support from senior managers and missing role models are mentioned as other reasons.

One example of a change of law that improved women’s situation in work life in Germany is the so-called Elterngeld (parents’ money) that was introduced in 2007. It offers a financial incentive to take a break from work and have a child as up to 67% of the previous salary will be paid during the child’s first year of life. If the second parent also decides to take a break from work another two months will be covered by this payment. The introduction of Elterngeld has not only increased the number of high earners that have children but also the number of fathers that take time off from work to look after their offspring. Yet, as the average salary of a woman in Germany is about 22% lower than that of a man, it is in many cases still the cheaper and thus more likely option for the woman to stay at home with the child.

There are, however, not only financial reasons to take into account when thinking of having a child. When doing business in Germany it is important to know that many Germans hold prejudices against working mothers. The fact that the German government is currently debating the introduction of a child-care subsidy for parents who look after their children at home instead of finding a place in a crèche for them mirrors the convictions that many people hold in regards to childcare.

Increasing the number of women in leadership positions is not only a matter of fairness but is highly important in financial terms. The survey by the McKinsey Global Institute shows that an increase of the number of women in leadership positions has a positive impact on the financial performance of companies. This shows that it is crucial for Germany to support the promotion of women in order to fulfil their economic potential.

Doing business in Germany requires an awareness of the challenges female employees in the country are facing as these can have an impact on the business performance of the company as a whole. Promoting the advancement of female employees and giving them the chance to combine family and work life is essential as it ensures the company’s profitability. Intercultural training courses on German social and business culture can help anyone to understand the dynamics at play both for women and men in the workplace and at home. This understanding will help anyone doing business there to better anticipate any sensitivities and areas of opportunity to get more effective results.

 



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