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Englewood Cliffs, N.J./JANUARY 02, 2018 –CEOs, take note: the year 2017 made gender a major issue in the workplace, and gender diversity now ranks with the Affordable Care Act and cyberattacks among the top challenges CEOs face in 2018. Here are three trends that show how the rules are changing:

1. Employers face new pressures to act on gender diversity. As activist investors push for board diversity and even pay equity, new pay equity laws bring severe consequences for non-compliance. Many organizations may need to reconfigure hiring practices to ensure, for example, that they don’t ask job candidates about salary history. At the same time, companies across industries have made dramatic new commitments that raise the bar for acceptable gender diversity efforts. Now that Intel, IBM and Pfizer have pledged to spend a combined $300 million on women-led businesses, for example, companies can no longer position themselves as gender diversity champions simply by acknowledging the business case and setting up some HR programs to help.

2. Frustrations caused by stalled progress and a tightening labor market are making the issue even more combustible. The numbers remain dismal: women hold just 20.2 percent of Fortune 500 board seats and at their current pace won’t reach parity for decades. Current gender diversity programming has not meaningfully changed the overall numbers, and in some cases has caused resentment and backlash, leaving both proponents and skeptics vexed. A tightening labor market adds to the pressures. As 10,000 baby boomers reach retirement age each day, employers no longer enjoy the luxury of an abundant talent pool. The number of U.S. job openings hit a record high in 2017, and the world faces an acute misuse of talent by not acting faster to tackle gender inequality, according to the World Economic Forum. As the available talent pool shrinks to a puddle, employers facing a long-term talent shortage can ill afford to alienate women and their supporters.

3. Employers who want recognition as gender diversity champions now need to meet new minimum standards. For example, to compete with industry leaders, companies generally should move toward 33 percent female board representation: McKinsey finds that women occupy at least 33 percent of board seats among the top 50 S&P 500 companies. Pay equity is another key issue. Employees increasingly expect companies to say that they pay men and women equally, and CEOs can expect calls for compensation transparency to increase in the months ahead. They also will face increased pressures for actions that require their own engagement, whether that means deep financial investments in moving toward parity, measurable targets for gender-balanced leadership, or new kinds of leadership-backed programming to close the gender gap.

For years, companies could champion gender diversity without making gender a serious issue within their organizations. In 2018, the marketplace demands much more, and companies that adapt have an incredible opportunity to position themselves as employers of choice.

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