JILPT Research Eye
Industry and Female Managers

October 20, 2015
(Originally published on July 13, 2015 in Japanese)

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Tamotsu NAGATA

Research Director, Department of Human Resources Management


In Japan, promoting active participation of women has been flagged up as an important national policy. At the end of 2005, the government announced a Cabinet Decision on the “Second Basic Plan for Gender Equality”, which set the target of expanding women’s participation in every field so that women would occupy at least 30% of leadership positions by 2020, and promoting efforts in every sector to this end[Note 1]. Again, the “Third Basic Plan for Gender Equality”, announced at the end of 2010, set the target of increasing the proportion of women in positions equivalent to or higher than section manager in private companies to approximately 10% by 2015.

Although it is not clearly stated what specific statistic the proportion of women in managerial positions is based upon, basically documents of the Labour Policy Council are assumed to take the number of persons in section manager and department manager in companies with 100 employees or more, as reported in the Ministry of Health, Labour and Welfare’s “Basic Survey on Wage Structure”. Since this proportion in 2014 was 8.3%, the government’s target is to increase this by 1.7 points in statistics for 2015. The ratio had risen by 0.8 points from 7.5% in 2013 to 8.3% in 2014, and if it were to continue rising at this level or higher through 2015, it can be expected to exceed 9%.

In small businesses, managerial positions are usually filled by company executives alone. But as the company size increases, these positions are considered necessary in order to assist the executives and share the work of managing the general employees, whatever the industry. Moreover, there may be unique ways of performing and managing specific work processes according to the industry. And therefore, the ratio of managerial positions to all employees (hereinafter “managerial ratio”) is also thought to depend on the company size and industry.

Fig. 1 shows the ratio of females among employees on open-ended contract, by company size, as well as the managerial ratio, the managerial ratio within female employees, and the ratio of women in managerial positions, according to the Ministry of Health, Labour and Welfare’s “Basic Survey on Wage Structure”. The Basic Survey shows aggregated data on managerial positions in companies with 100 employees or more.

Fig. 1 Share of women in employees and managerial positions by company size (%)
Figure1

As the table shows, the managerial ratio rises as the company size increases. But the opposite is true of the ratio of female employees, which falls as the company size increases. Meanwhile, the managerial ratio of women and the ratio of women in managerial positions are highest in the medium-sized company of 500-999 employees. Companies with 1,000 employees or more are characterized in that there are fewer females among employees on open-ended contract, and although their ratio of managerial positions is higher, the ratio of women in managerial positions is lower[Note 2].Therefore, since company size may influence the appointment of women in some way, let us now look more closely at the situation in companies with 100-999 employees, rather than just the total of companies with 100 employees or more.

Fig. 2 shows the situation of active participation of women in different industries, as found in the same survey. Here, it should be noted that mining, stone quarrying and gravel quarrying industries are included in the industry totals, but are not listed as they employ very few women in managerial positions and the figures are harder to interpret.

Fig. 2 Situation of women and managerial positions by industry
Figure2

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In the industry total, the ratio of women in managerial positions has reached 9.8% in companies with 100-999 employees, thus achieving the target of “approximately 10%”. The industry with the highest ratio is “Medical, health care and welfare” with 47.2%; in other words, the male-female ratio among department and section managers is around 1:1. Other industries scoring above average (and the goal of 10%) are “Accommodations and food services”, “Personal services and amusement services”, and “Education, learning support”. In that case, would the overall ratio of women in managerial positions rise if more women took up employment in these industries?

Looking at the managerial ratios in the 3rd column from the right of the table, variation is still seen in the managerial ratio by industry (the ratio of department managers + section managers among employees on open-ended contract) even when the different company sizes are compared. The lowest ratio is in “Medical, health care and welfare”, which has the highest ratio of women in managerial positions, while conversely the highest is in “Construction”, which has the lowest ratio of women in managerial positions. Since the construction industry offers large number of managerial positions, it would have greater number of women in absolute terms in managerial positions even if there were only one to every 40 male employees. As a result, the ratio of women in managerial positions among employees on open-ended contract is 4.1% in “Construction” compared to 3.5% in “Medical, health care and welfare”, showing that the construction industry hires more women in managerial positions. Meanwhile, women are most likely to rise to managerial positions in “Information and communication” and “Scientific research, professional and technical services”, while they are less prone to do so in “Manufacturing” and “Transport and postal activities”.

Fig. 3 is a scatter plot showing the distribution of managerial and female ratios[Note 3]. The high female ratio in “Medical, health care and welfare”, where the managerial ratio is low (i.e. both men and women have greater difficulty in rising to managerial positions) may slightly reduce the ratio of women in managerial positions as a whole, but in other industries, no relationship can be found between the managerial ratio and the female ratio.

In other words, the low ratio of women in managerial positions may not be necessarily attributed to the fact that many women work in industries where the managerial ratio is low. However, if steps could be taken to increase hiring of women in industries where the managerial ratio is high and to promote their establishment there, that could be expected to raise the ratio of women in managerial positions as a whole. Specifically, supporting employment management that makes it easier for woman to work in priority industries such as “Construction”, “Academic research, professional and technical services” and “Compound services” – industries where the ratio of women in managerial positions is not high – could be an efficient way of raising the ratio of women in managerial positions within these industries and in Japan as a whole. Conversely, having even more women employed in “Medical, health care and welfare”, just because the ratio of women in managerial positions there is high, might not have such a significant effect of raising the ratio of women in managerial positions as a whole.

Fig. 3 Relationship between female ratio and managerial ratio
Figure3

Under Japanese-style employment practices, whereby elevation to managerial positions is based on internal promotion, a certain length of service is required in order to achieve this elevation. If a person joins a company on graduating from university and is promoted to section manager in about the 18th year, the “suitable age for management” would be from about the age of 40. In companies with 100 employees or more, the age groups with the highest ratio of female department or section managers, expressed in 5-year blocks, are 45-49 (23.1%), followed by 50-54 (21.9%), 55-59 (20.3%) and 40-44 (15.8%). In other words, more than 80% of female managers are concentrated in the 20 years from ages 40-59, which will therefore be referred to as “the suitable age for management” below.

Fig. 4 is a scatter plot showing the ratio of employees at the suitable age for management and the managerial ratio (male-female total) in companies with 100-999 employees, categorized by industry. It shows that there is no connection between the two; the ratio of managerial positions varies from industry to industry based on business-related characteristics, even if the company size is fixed to a certain extent[Note 4].

Fig. 4 Relationship between age composition and managerial ratio
Figure4

Industries with high ratios of women among employees at the suitable age for management in companies with 100-999 employees are “Medical, health care and welfare”, “Education, learning support”, and “Personal services and amusement services”. These are the same industries where the ratio of women in managerial positions is high. Industries where the ratio of women among employees at the suitable age is low are “Construction”, “Transport and postal activities”, and “Electricity, gas, heat supply and water”, again concurring with the ratio of women in managerial positions there. In other words, the higher the ratio of women among employees at the suitable age for management, the higher the ratio of women in managerial positions. Fig. 5 shows this in the form of a scatter plot[Note 5].

To increase the ratio of women in managerial positions in each industry, it will be important to raise the ratio of women among employees at the suitable age for management by taking steps for continued employment, promoting the conversion of non-regular to regular employees, and hiring mid-career female workers capable of being promoted to managerial positions[Note 6].

Fig. 5 Relationship between the ratio of female employees at the suitable age for management and the ratio of women in managerial positions
Figure5

In the “Survey on the Careers and Work-Life Balance Support of Male and Female Regular Employees” conducted by JILPT in 2012, the attitudes of women employees who do not seek managerial positions were also analyzed. For women, the typical reason for not seeking managerial positions was that “It would be harder to balance work with family life”, while for many of male employees it was that “There are few or no advantages”. Both men and women also stated that “There would be more responsibility” in more or less equal measure[Note 7].

Focusing particularly on wages (one of the “advantages”), the wages (regular monthly salary) of section managers and chief clerks at the suitable age for promotion to section manager were compared. If the analysis were to include all relevant ages up to 59, i.e. those identified above as the suitable age for management, there would be more department managers and fewer chief clerks, thus unable to see clearly the effect of “promotion” to managerial positions. Therefore, focus was placed on ages 40-49 as the suitable age for promotion to section manager. If this analysis reveals a large difference in pay for people in that age group when promoted to section manager compared to when remaining at the level of chief clerk, there should be significant advantages in rising to managerial positions.

Fig. 6 presents three wage change multiples for the 40-49 age group in different industries. The first multiple [ 1 ] shows the wage difference on rising from female chief clerk to female section manager, the second [ 2 ] the wage difference between female section manager and male section manager, and the third [ 3 ] the difference between the rate of increase for females rising to section manager, compared to that for males.

In companies with 100-999 employees, the industry total shows a wage multiple of 1.15 for section managers compared to chief clerks, or a rise of 15.3%. By industry, section managers’ wages are generally higher than those of chief clerks, with the exception of “Services (not elsewhere classified)” and “Real estate and goods rental and leasing”, but there is hardly any difference between the two in “Compound services” and “Information and communications”. The rate of increase is higher in industries with lower ratios of women, notably “Electricity, gas, heat supply and water” and “Transport and postal activities”, “construction” industry.

Comparing the wages of section managers by gender, the industry total shows that the wages of female section managers are 0.89 times those of men, or in other words about 10% lower. By industry, wages of female section managers are higher in “Transport and postal activities” and “Information and communications”, while there is little difference by gender in “Electricity, gas, heat supply and water” and “Scientific research, professional and technical services”. Wages of female section managers are lower than those of male section managers in “Medical, health care and welfare”, “Services (not elsewhere classified)” and “Construction” in that order; in “Medical, health care and welfare” they do not even reach 70% of the level for males. Thus, while the gender balance of managerial positions in “Medical, health care and welfare” is almost 1:1, a significant gap is found in the respective wage levels[Note 8].

The industry total shows hardly any gender difference in wage rises when a chief clerk is promoted to section manager. Therefore, the reason why more men state that “There are few or no advantages” may have nothing to do with wages. By industry, the rise in wages for women on promotion to section manager is higher than that for men in “Electricity, gas, heat supply and water”, “Transport and postal activities” and “Manufacturing”, while conversely the rise is lower than that for men in “Medical, health care and welfare”, “Services (not elsewhere classified)” and “Real estate and goods rental and leasing”, among others.

Fig. 6  Wages of section managers and chief clerks (Multiple)
Figure6

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The advantage of being promoted to a managerial position may not only be financial (wages). There might also be an element of motivation in being given responsibility for an organization. And furthermore, as overtime allowances replaced by managerial allowances is based upon an official stance that managers can manage their own time, this would suggest that it should also be easier to balance work with home responsibilities (although, in reality, it must be difficult). However, in order to encourage a worker to be promoted to a manager, it is quite natural that an appropriate high wage should be offered compared to a chief clerk. This should be discussed between labor and management as an issue of wage determination.

To promote active participation of women, attempts should be made to support the balance between work and family life so that more women can aim for managerial positions, while at the same time, working styles and treatment should be improved so that managerial positions present attractive duties and status. This will surely lead to greater motivation and job satisfaction among employees in general, regardless of gender, as well as having a positive impact on companies’ business management.

Note 1.“All fields of society” is taken simply to mean “not only the national government but also local authorities, private companies, and various groups and organizations”. There is some variance in ratios of women in managerial positions, depending on the industry, business scale and region, as well as between individual companies. However, rather than perceiving this as a problem, it might be more constructive to see it as a clue to discovering how women’s active participation in general can be promoted more effectively.

Note 2. The specific reason for this is not known, although various explanations have been proposed – for example, that large corporations are more numerous in industries not favored by female job applicants, or that women more readily leave jobs in large corporations based on the “Douglas-Arisawa’s law”, because they are more likely to find high-earning spouses through connections arising from working for such companies.

Note 3. The correlation coefficient is -0.355, but if we exclude the exceptionally high ratio of women in “Medical, health care and welfare”, the interpretation could be that there is no correlation between the two.

Note 4. In Fig. 4, the correlation coefficient for the ratio of employees at the suitable age for management and the managerial ratio is -0.106.

Note 5. The correlation coefficient is 0.970.

Note 6. According to Fig. 1-6-2 in JILPT Research Series No.132 “Results of Survey on Hiring, Assignment, Promotion and Positive Action” (2014)(Jpanese only), women hired in mid-career are promoted after fewer years of service than men.

Note 7. JILPT Research Series No.119 “Results of Survey on the Careers and Work-Life Balance Support of Male and Female Regular Employees (2)–– Analysis” (2014)(Japanese only) Chapter 4 Workplace Factors that Raise Women’s Motivation to Work (PDF: 1.1MB, in Japanese) Fig. 4-4-5

Note 8. Though based on conjecture, it is conceivable that there are more male section managers in medical and health care, and more female ones in welfare.


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