Gender Balance at BAE Systems

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Gender Balance at BAE Systems

  1. 1. Strategic HRM Gender Balance Jason CatesContentsContents Page 1Preface 2Executive Summary 3Context Current Laws and Guidelines 4 Macro-Economic Environment 5Major Issues Broad Industrial Issues 6 Corporate Breakthroughs 7 Conclusions 9Recommendations Davies Report 10 Company Specific 10Formalities Harvard Referencing 11Word Count/Word Limit: 2758/3000 1
  2. 2. Strategic HRM Gender Balance Jason CatesPrefaceBAE Systems is a multinational aerospace and defence firm with its headquarters located in Londonand its main share listing on the London Stock Exchange FTSE 100 index. The company had 93,500employees worldwide in 2011 with the bulk of these being employed in the UK and US.(BAE,2012f)(BAE 2012g) BAE’s current operations include the assembly of a range of military projects. These includethe Queen Elizabeth class aircraft carriers and the Astuteclass submarinesfor the UK government.BAE is also involved in the development and assemble of the Eurofighter Typhoon and F-35Lightning II jet fighters which are sold to varies markets including the US and Saudi Arabia. (BBC,2006) (Global Security, 2006) Sales in 2011 stood at £19,154m (€23,211m) with net profit for the year standing at £1,260M(€1,526m). This sawa 14% fall in company sales in 2011, but due to significant cost savings beingmade, net profit increased by 27% in the same year. (BAE, 2012g) BAE’s current board of director is made up of twelve members consisting of its ChairmanDick Olver, three executive directors and eight non-executive directors. Three of these positions arecurrently held by women with Paula Reynolds being the most recently appointed in 2011 as a non-executive director.(BAE, 2012g)“We continue to evaluate our governance arrangements against our own experiences and changes in best practice.” Dick Olver, Chairman(BAE, 2012g) 2
  3. 3. Strategic HRM Gender Balance Jason CatesExecutive SummaryCurrent Laws and GuidelinesBAE’s current European operations are mainly focused in the UK and Sweden. The governments inboth countries are currently against imposing quotas concerning the enforcement of gender balance oncompany boards. However, if current targets are not met, quotas may be imposed at a later date. TheEuropean commission has also suggested using quotas if the current situation is not improved.Current Performance BAE Systems currently meets the recommendations of the Davies report. This includes aquarter of BAE’s board of directors being women. However, this currently fallsshort of the EU’s 2015and 2020 targetsof 30 and 40 per cent respectively. 9% of BAE’s new recruits in the last year have been female; this is compared to the industrialaverage of 2%. In terms of graduate recruitment, BAE is currently in line with the rest of the industrywith women making up 12% of new recruits.Macro-Economic Environment Austerity programmes in many of our key markets as well as the withdrawal of allied troopsfrom Iraq has seen company revenues fall in recent years. This has caused us to make a number ofredundancies over the last year as well as reduce the number of new engineers we recruit. This willsee progress slow over the next few years in regards to employing more women into the company.Recommendations Increase female representation on the board of directors in line with current EU targets. (30% by 2015 and 40% by 2020) Increase female graduate recruitment to 16% of total by 2015. Appropriate disclosure of information regarding pay differences between men and women and action being taken to address such differences. Continue and strengthen our participation in training programmes promoting female participation and leadership within the industry. 3
  4. 4. Strategic HRM Gender Balance Jason CatesContextThis report will focus on the changing enthuses on gender balance within the European corporateenvironment. It will thenconsider how this may affect BAE’s future recruitment and HR policy.Recommendations will then be madeon how to address these considerations.Current Laws and Guidelines Our main markets outside the UK and US are Saudi Arabia, India and Australia. However,BAE also has operations in Sweden upon the acquisition of a number of subsidiariesthere. Therefore,as this report is focusing on BAE’s European operations, it will mainly be focusing on BAE’soperations in both Sweden and the UK. (BAE, 2012a) The respective authorities in both countries are currently against imposing quotas in regardsto the number of women companies should appoint to their boards. However, actual performanceconcerning this issue is at a stark contrast when comparing the UK’s performance with that ofSweden. Sweden is currently one of the world’s top performerswith a quarter of itsboard membershipbeing women. This is compared to the UK’s 15% female membership. (Sweden, 2012) The basis of this is the cultural belief in Sweden that sharing power equally regardless ofgendermakes a society more democratic and just. This has been put into practice through the use of “awell-developed welfare system” allowing both genders to balance their family lives with theirworking lives. It is also emphasised within the countries education system with women being awardedtwo-thirds of Sweden’s undergraduate degrees. This has helped Swedish companies achieve this25%figure in regards female board membership. As such, the need forquotas is not as prominent inSweden as it may be for other countries in which we operate. (Sweden, 2012) In terms of the UK, Business Secretary Vince Cable has stated he is against imposing quotasand that the UK was “making the voluntary approach work”. This includes having a target of 25% tobe achieved by 2015 in regards to the proportion of board membership being women. This is 4
  5. 5. Strategic HRM Gender Balance Jason Catescompared to the current figure of 15% being achieved by FTSE 100 companies. BAE currently meetsthis target with a quarter of its board being female.(City AM, 2012)(BAE, 2012b)(BBC, 2011a) Although this policy of targets over quotas is currently being followed in both Sweden andthe UK, there is a possibility that this might change in the near future. Future changes concerningthese policies may likely come from the European Commission which will override the current viewsheld by both,the Swedish and British governments. This is an issue we’ll have to be considerwhendetermining future HR policy. (BBC, 2012a) It is the view of Viviane Reding, the EU’s Justice Commissioner, that even though she wouldrather not use quotas, current national policies have so far “not brought about satisfactory results".Assuch, the commission is open to imposing such quotas if current increases in gender balances are notaccelerated. This includes aiming for EU wide targets of 30% by 2015 and 40% by 2020. (BBC,2012b)(City AM, 2012)This is an issue we’ll have to consider regarding future appointments to the board. This is due to BAEbeing5% short of Reding’s 2015 target.As such, we must ensure appropriate action is taken at theearliest opportunity in preparation of potential quotas being implemented. This will better place theorganisation in the longer time regarding this issue. (City AM, 2012)Macro-Economic Environment Governmental austerity programmes and the withdrawal of allied troops from Iraq have seenthe defence budgets of many of our key markets scaled back. This has had a negative impact oncompany performance with revenues falling by 14% in 2011. This has meant that cost savings havehad to be made including scaling back recruitment and the implementation 2942redundancies. Thishas included a number of women being made redundant as well as a reduction in the number of newwomen being recruited into the organisation. This scaling back of the workforce will likely slowprogress being made in regard improving the gender balance within the company workforce. Again,this is an issue that will have to be appropriately considered and planned for in order to ensure theissue remains at the forefront of BAE’s HR policy. (BBC, 2011b)(BBC, 2012c)(BAE, 2012c) 5
  6. 6. Strategic HRM Gender Balance Jason CatesMajor IssuesIndustrial IssuesFirst Woman AwardsThe “first woman awards” supported by the Institution of Mechanical Engineers has established the“First Woman in Engineering and Manufacturing” award. The aim of the award is to recognise andpromote the role of women in the traditionally male dominated industries. This is due to the UKcurrently lagging behind in regards to the proportion of its engineers being women.(Currently8%compared to Portugal’s 40%) The awards were founded in 2004 byReal Business and the CBI with aprevious winner beingRosalind Murray, a submarine designerhere at BAE. (PE, 2012)Further Education and Development Semta in partnership with EAL, the engineering industries qualifications body, havedeveloped a new qualification aimed at aiding female career progression in traditionally maledominated industries. This includes the UK engineering industry and is jointly funded by employers,Semta and the UKCES employer investment fund. This involves making £400 available toeachwomanto help develop the skills needed to fulfil senior management positions such as effectivecommunication skills. It is said to have benefitted 350 women so far including 100 here at BAEsystems. (ET, 2012)(PandCT, 2012) “It really has made a difference to my confidence as now I feel more comfortable in applying for more managerial roles, to get the best out of my potential." Stephanie Otoole, Senior Materials Planner at BAE Systems(ET, 2012) The UK government in conjunction with engineering employers has also developed the“Skills 2020” strategy. The aim of this strategy is to develop and fill the skills gap currently faced inthe UK engineering industry. This is particularly aimed at women who are continuously encouragedand monitored during their “career skills development”.It is hoped this will help support more womenin gaining leadership roles in companies such as our own. (Opportunity Now, 2012) 6
  7. 7. Strategic HRM Gender Balance Jason CatesCorporate BreakthroughsLeaders share their secrets We have recently held host to several senior female personnel from the militaryincludingMalinda Dunn, a“retired US Army Brigadier”. This event allowed women in our organisation tonetwork and share stories about balancing their private and professional lives. It has also given themthe opportunity to discuss “the need for greater diversity” and the effect this will have on BAE’sfuture performance. (BAE, 2012d)Mentoring in action BAE has also implemented a new mentoring scheme to help guide and support new potentialleaders within the organisation. This includes the implementation of “speed-mentoring”. This allowsemployees including women to network and raise issues with multiple managers in an informalenvironment. This allows employees to build networks that will last for the rest of their careers. Weare also training line managers to help support and motivate female employees to reach their fullpotential within the organisation. It is hoped that this will increase the number of female trainees onBAE’s leadership programme to 20% of total participants. (BAE, 2012d)(Equal Opportunities, 2011)Women’s network We have also established a women’s network within our munitions division as well asacompanywide “Women’s Forum”. These give women the opportunity to share experiences and arebased around building self-confidence and sharing insights into achieving future success. Ourmunitions network was founded with the help ofInternational Women of Excellence and is based on asimilar network established atIBM. It is hoped this will give our female employees increasingopportunities for career progression here at BAE Systems. (BAE, 2012d) “The Global Women’s Forum was especially useful because it addressed the aversion many women feel towards self-promotion in the workplace” BAE Employee(ET, 2012) 7
  8. 8. Strategic HRM Gender Balance Jason CatesWork-life balance BAE also allows for more flexibility concerning employee working arrangements. Thisallows for more diversity within our workforce providing employees with outside commitments theflexibility to join our workforce. This also “improves organisational efficiency” providing BAE with amore flexible workforce. This reduces the need for future redundancies in times of falling customerdemand and industrial uncertainty. (BAE, 2012d)Recognition of female employees In June 2010, BAE’s commercial director Michelle Rushbrooke won the “first woman award”in the manufacturing categoryas discussed earlier in the report. Our corporate responsibility directorDr Deborah Allen was also a finalist in the award category. Helen Barratt, a construction capabilitymanager here at BAE, won the award in 2009. This was awarded based on the role she played in thedevelopment and delivery of the Astute class nuclear submarine for the UK government. Helen, likemany of the women we’re trying to promote at BAE, worked her way up the organisation over time.She first joined BAE in 1985 as an administration assistant and joined the construction environment in1997. She was promoted to her current position in 2009 overseeing “submarine constructioncapabilities” here at BAE. (Where to Work, 2009)(Where to Work, 2010) BAE recently appointed 17 year old Micha Knight as the 1st woman since the 1980s to berecruited as an apprentice wielder at the Barrow shipyards. She was previously turned down for aposition as an electrician at the shipyards. However, after attending college and gaining an NVQ inwielding, BAE then decided to give her an apprenticeship at the shipyards and is currentlyprogressing beyond anyone’s expectations. (BAE, 2012e)Implementation of “Skills 2020” We at BAE see the “Skills 2020” strategy as a way of breaking the perception that theengineering profession is a male only industry. This is being done by us going into schools andtalking with the potential engineers of the future, both male and female. So far, initial responses have 8
  9. 9. Strategic HRM Gender Balance Jason Catesshown “90%” of young people have had a positive shift in their perception of the engineering industrydue to these workshops. This has helped BAE increase its annual female employee intake to 9% oftotal and 12% in terms of graduate recruitment. This is compared to the industrial average of 2% oftotal recruitment and 8-16%in terms of graduate recruitment. This sees 19% of BAE’s globalworkforce and 17% of BAE’s Executive Committee being female. Even though this is a rise in femalerecruitment, we still far to go in terms of having a gender balanced workforce. (Equal Opportunities,2011) (BAE, 2012g)Santander awards In 2011, BAE won the "Inspiring the Workforce of the Future"award which is sponsored bythe Spanish bank Santander. This was awarded based on our work in inspiring female careeraspiration within the engineering industry. This work is shown in our above average recruitment ofwomen into our workforcewhen compared to the rest of our industry. This proves that BAE is a rolemodel for the rest of the industry and is leading the way in having a gender balanced workforce.(Equal Opportunities, 2011)Conclusions In conclusion, BAE as stated above has proven itself as a role model for the industry.Nonetheless, improvements still need to be made which will all be outlined in the recommendationsthat follow. These recommendations willconsider the expectations of local governments as well as theEuropean Commission. However, these recommendations will also be realistically achievable andappropriate to BAE. This is to ensure the effectiveness of the board is upheld.As forcing newvacancies into the board simply to comply with diversity targets may compromise board efficiencyand corporate effectiveness It is hoped that these recommendations will see BAE retain its position as a role model withinthe industry. These will keep us ahead of the situation if and when future quotas are imposed ensuringcorporate effectiveness and long term stability is maintained. 9
  10. 10. Strategic HRM Gender Balance Jason CatesRecommendationsDavies Report(BBC, 2011a) This report endorsesthe recommendations of the Davies report as a bare minimum for futureperformance regarding gender balance here at BAE Systems. These recommendations are as follows; Clear objectives concerning the proportion of women we intend to have on our board by 2015 This should match or exceed our current proportion of 25% Annual disclosure of information regarding female representation on our board of directors, as well as in our senior executive roles and BAE as a whole. An open recruitment process and “meaningful disclosure” of information regarding how we intend to increase diversity within our organisation. This includes the need for equal gender representative within BAE Systems in all stages of the decision making process.Company Specific(City AM, 2012)(Equal Opportunities, 2011) However, due tothe significant progress BAE has made in recent years, we envisage BAE aimingfor more ambitious targets concerning gender balance. This will see us exceeding the aboverecommendations and come more into line with the expectations of the European Commission.Our company specific recommendations are as follows; Increase female representation on the board of directors in line with current EU targets. (30% by 2015 and 40% by 2020) Increase female graduate recruitment to 16% of total by 2015. This will see us at the higher end of the industrial average in regards to female graduate recruitment. Appropriate disclosure of information regarding pay differences between men and women and action being taken to address such differences. Continue and strengthen our participation in training programmes promoting female participation and leadership within the industry. This includes taking full advantage of government and social funding made available for such training. 10
  11. 11. Strategic HRM Gender Balance Jason CatesHarvard ReferencingBAE (2012a) About US. Available at: http://www.baesystems.com/AboutUs/[Accessed: 2nd April2012]BAE (2012b)Our Board of Directors. Available at: http://www.baesystems.com/our-company-rus/our-people/board-of-directors?_afrLoop=23695764538000&_afrWindowMode=0&_afrWindowId=null#%40%3F_afrWindowId%3Dnull%26_afrLoop%3D23695764538000%26_afrWindowMode%3D0%26_adf.ctrl-state%3Dfm0w969n7_4[Accessed: 2nd April 2012]BAE (2012c) Strategic Review: BAE Systems at a Glance. Available at:http://ara2011.baesystems.com/strategic_review/index.html[Accessed: 2nd April 2012]BAE (2012d) Diversity and Inclusion: Developing an inclusive workplace. Available at:http://www.baesystems.com/our-company-rus/corporate-responsibility/working-responsibly/investing-in-our-people/diversity-and-inclusion/developing-an-inclusive-workplace;baeSessionId=1KL4P2yYhknKVmyy0Mt9ncx49GHWJdvR9JGv0g5jZyzv8hXgP1tg!1084437069?_afrLoop=72648614112000&_afrWindowMode=0&_afrWindowId=null#%40%3F_afrWindowId%3Dnull%26_afrLoop%3D72648614112000%26_afrWindowMode%3D0%26_adf.ctrl-state%3D188e7xvu5o_4[Accessed: 2nd April 2012]BAE (2012e) Micha bears the torch for women engineers. Available at:http://www.astuteclass.com/2012/01/micha-bears-the-torch-for-women-engineers-2/[Accessed: 2ndApril 2012]BAE (2012f) Company Info. Available at:http://www.baesystems.com/CompanyInfo/index.htm[Accessed: 2nd April 2012]BAE (2012g) BAE Annual Report 2011. Available at: http://bae-systems-investor-relations-v2.production.investis.com/~/media/Files/B/BAE-Systems-Investor-Relations-V2/PDFs/results-and-reports/reports/2012/ar-2011.pdf[Accessed: 2nd April 2012]BBC (2006) Saudi Arabia buys 72 Eurofighters. Available at:http://news.bbc.co.uk/1/hi/business/5262120.stm[Accessed: 2nd April 2012]BBC (2011a) Davies report calls for more women in boardroom. Available at:http://www.bbc.co.uk/news/12560121[Accessed: 2nd April 2012]BBC (2011b) BAE Systems to announce nearly 3,000 job cuts. Available at:http://www.bbc.co.uk/news/business-15063827[Accessed: 2nd April 2012] 11
  12. 12. Strategic HRM Gender Balance Jason CatesBBC (2012a) David Cameron wont rule out women in boardrooms quotas.Availableat:http://www.bbc.co.uk/news/uk-politics-16958852[Accessed: 2nd April 2012]BBC (2012b) EU considers laws to put women into top jobs. Availableat:http://www.bbc.co.uk/news/world-europe-17257676 [Accessed: 2nd April 2012]BBC (2012c) BAE Systemss annual sales fall by 14%. Availableat:http://www.bbc.co.uk/news/business-17054577[Accessed: 2nd April 2012]City AM (2012) Cable: quotas for women on boards not needed in UK. Available at:http://www.cityam.com/latest-news/cable-quotas-women-boards-not-needed-uk[Accessed: 2nd April2012]Equal Opportunities (2011) BAE Systems: challenging gender stereotypes. Available at:http://www.eortrial.co.uk/default.aspx?id=1153854[Accessed: 2nd April 2012]Electrical Times (2012) New EAL qualification supports female industry workers. Available at:http://www.electricaltimes.co.uk/news/article.asp?articleid=6114[Accessed: 2nd April 2012]Global Security (2006) F-35 Joint Strike Fighter (JSF) BAE Systems. Available at:http://www.globalsecurity.org/military/systems/aircraft/f-35-bae.htm[Accessed: 2nd April 2012]Opportunity Now (2012) The Santander Award - BAE Systems. Available at:http://www.bitcdiversity.org.uk/awards/on_awards_2011/on_awards_case_studies_2011/santander/bae_systems.html[Accessed: 2nd April 2012]Professional Engineering (2012) IMechE accelerates drive to get more women into engineering.Available at: http://profeng.com/news/imeche-accelerates-drive-to-get-more-women-into-engineering[Accessed: 2nd April 2012]Process and Control Today (2011) Semta supports women in science, engineering and manufacturingindustries in the North West with launch of new programme. Available at:http://www.pandct.com/media/shownews.asp?ID=31340[Accessed: 2nd April 2012]Sweden (2012) Gender equality: The Swedish approach to fairness. Available at:http://www.sweden.se/eng/Home/Society/Equality/Facts/Gender-equality-in-Sweden/[Accessed: 2ndApril 2012]Where to Work (2009) BAE Systems wins prestigious womens award. Available at:http://www.wherewomenwanttowork.com/news/news.asp?id=1370&articleid=934[Accessed: 2ndApril 2012]Where to Work (2010) BAE Systems wins prestigious women’s award. Available at:http://www.wheretowork.com/news/news.asp?id=1370&articleid=1095[Accessed: 2nd April 2012] 12

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