MILAN — On the Sunday of Milan Fashion Week spring/summer 2024, executives from across the luxury industry took part in a discussion on ‘Gender Equity and the Next Generation of Talent in Luxury’ at the Bulgari Hotel in the heart of Milan. The group explored issues facing female-identifying representatives in the C-suite and the needs of sponsorship in the workplace.
The event was co-hosted by Imran Amed, founder and CEO of BoF and Laura Burdese, marketing and communication vice president of Roman high jewellery maison Bulgari. The LVMH-owned business seeks to champion female empowerment internally, with 62 percent of its global managerial positions held by women at Bulgari. The wider LVMH Group achieved a Gender Equality Index score of 91.8/100 in France in 2022 — a score based on an assessment of wage gaps, pay rise differences, promotion discrepancies, the percentage of employees given a pay rise on returning from maternity leave and the number of women in the top 10 highest-paying jobs.
The conversation was supported by insights from Gemma D’Auria, senior partner at McKinsey & Co., who shared insights and call-to-actions from the firm’s work on diversity, equity and inclusion (DE&I) in the industry. For one, its research demonstrates how gender equity is a business imperative — gender diverse companies are 36 percent more likely to outperform less diverse organisations. Improved DE&I has a positive impact on employee retention too — 47 percent of employees are more likely to stay with their company when they perceive it to be inclusive.
Despite “achieve gender equality and empower all women and girls” sitting at number five of the UN’s 17 Sustainable Development Goals, gender parity seems to be slipping further down many governments’ to-do lists in light of the permacrises of recent times, from the pandemic and war to the cost of living crisis. Still, Italy has created a Gender Equality Certification System, finalised in 2022 as a part of the Italian Recovery and Resilience Plan, which aims to ensure greater participation of women in the labour market, promote transparency and improve women’s working conditions. Gucci was the first Italian luxury house to receive this certification.
The next generation of talent is also entering the workforce with their own expectations of greater diversity and cultures that align with their progressive values — further driving the need for change within. McKinsey reports that younger generations are 3 to 5 times more likely to report that various DE&I factors have a major impact on their ability to work effectively, such as an inability to share one’s full self at work, or the creation of a hostile work environment.
Conducted under the Chatham House Rule and moderated by BoF’s commercial features editor Sophie Soar, BoF shares anonymised insights from luxury fashion and jewellery brands that attended, including Gucci, Tod’s, Marni, Versace, Anima, Tomorrow Ltd., Value Retail, OTB, Stella Jean, Meta and McKinsey.
Support underrepresented leaders to drive retention of junior employees
McKinsey & Co.’s DE&I call-to-action: Lead by example – demonstrate commitment to DE&I through a diverse top team that reflects your aspirations and the diversity of your customers and communities.
A disproportionately female workforce at entry-level peters out further up the corporate ladder. In the US and in Europe, almost two third of the incoming employees in apparel, fashion and luxury are women, according to McKinsey. However, women only represent 31 percent of executives in Europe, and 35 percent in the US. Out of all women executives, only 12 percent in Europe and 9 percent in the US have Profit and Loss responsibilities.
The “glass ceiling” — denoting the invisible barriers to progression and promotions at work for underrepresented groups — has given way to a “glass cliff”, referring to the performative appointments of female CEOs and executives set up to fail in already struggling businesses.
“The reality is that we also have to be much better at helping each other and supporting each other as opposed to competing because there’s such a window of opportunity for women to get forward — you end up competing or propagating a certain behaviour or culture,” said one attendee.
Male candidates still made up nearly 77 percent of all CEO appointments in the fashion and luxury industry in 2021, according to BoF and McKinsey’s State of Fashion 2023. This can have detrimental effects on younger generations looking to leadership for support, sponsorship and often, inspiration.
“If you don’t see females there, [in a senior role] that can make decisions, that are setting good examples, it’s impossible that they can even dream about that right in there,” said one attendee. “Sometimes we are promoted or we arrive at a certain position and we are not even sure if we deserve it.”
More than six in 10 Gen-Z are actively or passively looking for other jobs because they want better pay, work-life balance, or career and growth opportunities. Women, especially, are driving this, with almost 30 percent of Gen-Z women citing better advancement and growth opportunities as a reason to leave a job, compared with 22 percent of men.
Integrate KPIs and track metrics to form the basis of change
McKinsey & Co.’s DE&I call-to-action: Quantify and track – make concrete quantitative commitments, embedded alongside business KPIs, to build transparency and enable progress tracking.
With the drive towards increased transparency as employees and consumers alike demand more information on the brands they buy into, many companies today publicly share key metrics on their workforce — holding them accountable to external and internal parties.
“As soon as you set a KPI, the mindset starts to change. When you are forced with a KPI, [people] start to change their way of thinking, and then eventually it will become natural,” said one guest.
Setting KPIs and targets can be helpful in giving businesses momentum, direction and optimism — the idea of working towards a goal. One attendee shared their experience in building KPIs around diversity in leadership at an organisation, and educating those in the company required set KPIs, targets and an acknowledgement of where the gaps were internally.
“It took a huge amount of research by a focus group of people within the organisation, most of whom were female, across the topics of DE&I but specifically on gender equality. To be able to present those findings back to the wider group and say — ‘here are the facts, here’s where we are and here’s where we want to go.’ It was a penny-drop moment and people start to realise […] we should do something about it.”
As soon as you set a KPI, the mindset starts to change.
However, another guest shared: “There is only so much that can be quantified. The numbers don’t always tell the whole picture. But I do think facts help, like — how long would it take for us to get to gender parity?”
One attendee solicited caution on tracking and fulfilling metrics to improve diversity in organisations: “The dark side of KPIs is that, if 30 percent of your top team has to be women, [maybe] someone who is very capable actually gets into that position and they say it’s because she’s a woman [to fill the criteria]. It’s horrible.”
In 2022, Harvard Business Review shared insights from an Allies-In-Action study of over 1,100 men and women across companies that revealed a stark difference in perception of ally behaviour. Some 90 percent of men said they had personally given a woman credit for her contributions and ideas in a meeting during the previous year, while only 40 percent of women reported witnessing such male ally behaviour during that same period.
“I cannot tell you how few times I’ve seen a man stand up to it and say, [she’s here because] she’s fantastic,” added the attendee. “Of course I’m going to advocate for women, I’m going to pay it forward. […] But if the man says it, it’s incredibly powerful.”
Build an inclusive culture to ensure greater diversity is maintained
Spaces lacking diversity automatically propagate exclusivity, which can be a deterrent to underrepresented groups in business climbing the ladder.
There might be moments where, as one attendee experienced: “You’re doing well in your job. But I didn’t want to break through [the glass ceiling] to become a part of [an all-male environment].”
Inclusion is about understanding how employees feel, and whether they feel they have a seat at the table. “A lot of microaggressions still happen […] or women are not appreciated for the richness they bring to the organisation,” said one attendee.
“Diversity as the sheer representation is not the issue — inclusion is a very different matter, because inclusion is about how these things feel”, and such comments can be damaging, dismissive and ultimately exclusive.
One attendee discussed the rise of employee resource groups as a source of community and support, noting how the onus often falls on individuals outside of their full time jobs to build and grow that network support.
However, another guest argued: “Who is the organisation if it’s not the people? I think it is up to the organisation and therefore the people in the organisation to make that cultural change.”
Prioritise long-term recruitment and retention solutions
McKinsey & Co.’s DE&I call-to-action: Build capabilities – identify top talent within minority groups and design best-in-class leadership and capability building journeys to address drivers of inequity and level the playing field
There is a conflict with how swiftly the industry is changing and the desire for change, such that it is tempting for businesses to opt for solutions whose benefits have a short shelf life.
“Almost everyone is incentivised to make a quick move because we need to get stuff done tomorrow. And I see constantly that that is one of the biggest hindrances to recruiting differently and cultivating change,” said one attendee.
The discussion highlighted the value in taking the time to implement meaningful systems. For example, when recruiting decisions need to be made, it is important to weigh up the advantages of filling the vacancy as soon as possible versus using the time to invest in talent internally or changing the hiring process.
“There is inertia in the system. The potential for small victories encourages organisations to cheat in order to be seen as ‘more diverse’ when they actually become less diverse.” said one attendee.
The conversation also highlighted the need for better leadership training, as “[some] leaders are not equipped in leading a diverse team,” said one guest. “To be inclusive requires a totally different skill set [to those traditionally seen in the workplace]. There is very little done to equip those leaders to be effective in that new context.”
Seek to offer sponsorship rather than mentorship
McKinsey & Co.’s DE&I call-to-action: Be a sponsor and build a sponsor network within your organisation – sponsorship by senior leaders is key to supporting the careers of women and other minorities. Be bold and reward positive efforts.
Mentors and sponsors serve similar functions in nurturing talent in the workplace. But while a mentor provides guidance to a less-experienced individual, sponsors actively promote growth, provide access to opportunities at work and advocate for the career advancement of a less-experienced individual.
“The real question is, do you feel somebody has got your back and you can take a risk, rather than having somebody waiting for you to fail and tell you off,” said one attendee.
Women are generally over-mentored and under-sponsored. Over-mentored means everybody wants to give us advice.
The reality of gender inequity extends within sponsorship opportunities. Management consulting company Gallup research indicates 42 percent of women have a mentor vs 39 percent of men. However, when that came to sponsorship, it was 22 percent of women vs 25 percent of men.
“Women are generally over-mentored and under-sponsored. Over-mentored means everybody wants to give us advice,” said another attendee.
This situation is not unique to entry-level roles but extends into leadership positions. McKinsey research found that 22 percent of women report getting advice for career advancement vs 33 percent of men across all tenures, but at VP level, the gap widens markedly to 27 percent of women vs 45 percent of men).
Incentivise leaders to offer sponsorship
“If you want to change the company and you need to have everyone on board, then that sponsorship aspect becomes very important,” said one attendee.
They noted how some companies have begun to implement a social network analysis, which consists of a survey comprising two simple questions: Who would you go to for advice? And who actively provides opportunities for you? These allow you to identify where the “hubs of influence” in the company are.
These individuals have the potential to evolve company culture, so it becomes about “the opening up of certain goals and rewarding those sponsors.” If the company naturally has great role models working within it, offer leadership opportunities to those individuals and reward their behaviour.
Without incentivisation, it is possible that employees will not respond. If they are already working hard for the company and fulfilling their job description, they may have little mental or emotional capacity to extend their work to include the propagation of a positive company culture without various benefits.
“Don’t underestimate the impact that sponsors can have,” said one attendee, “and the men should do it, too. In fact, given how many more of you there are, it would make a bigger difference if the allies were more involved.”
The group discussion closed by addressing the need for both men and women to adopt these inclusive behaviours— achieving gender equality in the luxury workplace is in both company and employees’ interests, but demands that men wave the flag for women’s empowerment as much as their female counterparts.
This is a sponsored feature paid for by Bulgari as part of a BoF partnership.
