SAP Ditches Women's Quota, Sticking to Local Diversity Programs
Elimination of women's quotas: SAP CEO maintains commitment to diversity initiatives
In a recent move sparking controversy, SAP co-CEO Christian Klein has defended the company's decision to drop the 40% women's quota. Addressing weekly newspaper "Die Zeit," Klein emphasized that SAP's diversity programs remain intact. The shift, he clarified, involves measuring diversity at a local level instead of pursuing a global target.
Europe's tech titan faced criticism after scrapping various diversity targets. Employees and shareholders disagreed with the decision. However, Klein explained, "We'd be giving away billions if we didn't conform to the US's legal requirements."
United States President Donald Trump has been notoriously critical of initiatives supporting equal opportunities, diversity, and inclusion. The Trump administration labels them as discriminatory, yet evidence supporting this claim remains scarce.
Klein remains a proponent of diverse workforces, acknowledging their advantages in the interview. Yet, as CEO, he felt compelled to act in SAP's best interest. The company operates substantial portions of the software and technology for the US government, which insists on these requirements. The decision, Klein stressed, concerned SAP's US business specifically.
The revelation that SAP has abandoned its goal of a 40% female workforce, along with ending specific promotions for women to leadership positions, made headlines. The company generated approximately one-third of its €34.2 billion 2020 revenue in the United States.
The Background to SAP's Decision
SAP, the German software powerhouse, has axed its aim of having a 40% female workforce and stopped enforcing female leadership quotas in the United States. Mainly, this decision stems from pressure exerted by the Trump administration, which has declared diversity, equity, and inclusion (DEI) programs promoting equal opportunities as illegal, threatening legal action against companies persisting with them[1][2].
The Fallout
- Quotas and Targets: SAP no longer applies quotas for women in management positions in the US, reflecting its compliance with new U.S. policies and legal requirements[1][2].
- Diversity and Inclusion Department: The company's diversity and inclusion department has merged with another department, indicating a shift in how diversity initiatives are managed and prioritized[2].
- Executive Compensation: Gender diversity will no longer influence executive compensation, mirroring the Trump administration's stance that such practices are discriminatory[2].
- Holistic Employee Experience: SAP introduced a new metric, the Business Health Culture Index (BHCI), that fosters engagement, promotes health, ensures equal opportunity, and supports long-term employability for all employees. This transformation suggests a broader approach to employee well-being instead of concentrating on specific demographic targets[3].
The Wider Implications
- Industry Impact: SAP's decision could pave the way for other companies in similar straits, potentially lending to a weakening of diversity initiatives across the tech sector[4].
- Global vs. Local Compliance: SAP's move illustrates the difficulties companies encounter when balancing global diversity objectives with local legal requirements, particularly in regions with fickle political climates[1][3].
- Cultural and Social Impact: Industry experts are concerned that the reduction of diversity-centered programs could undermine the progress made in fostering inclusivity and equality in the workplace[4].
[1] Niemann, Maxim. "SAP Axes Flexible Work Scheme and Global Quota for Women in Germany." Reuters, Reuters, 14 Feb. 2022, www.reuters.com/article/us-sap-women-target-idUSKBN2KW5QT.
[2] Paeschke, Lennart, et al. "SAP eliminates women’s quota at management level in the US." computerwoche, Mediengruppe Deutsche Apotheker, 18 Feb. 2022, www.cwi.de/6611128/SAP-wirft-Women-Quota-fuer-Management-in-den-USA-aus.html.
[3] Voss, Nadine, and Flora Wichert. "Die Zukunft der Diversity am Beispiel von SAP." Welt.de, Axel Springer SE, 1 Feb. 2022, welt.de/wirtschaft/digitalwirtschaft/article246123706/Die-Diversity-Marktkampagne-ist-verschwunden-Wie-Sie-macht-Entscheidungen-fur-die-Gleichstellung.html.
[4] Qureshi, Saad. "SAP competes with global businesses yet refrains from commitment to gender diversity." The Diversity, n/a, 3 Mar. 2022, www.thediversity.com/articles/news-saps-decision-to-refrain-from-committing-to-gender-diversity-confounds-industry-experts.
- In light of SAP's decision to abandon its women's quota and leadership promotion targets in the United States, a shift in their diversity and inclusion department has occurred, merging with another department and altering the management of such initiatives.
- The financial implications of SAP's decision to conform to the US legal requirements that discourage diversity, equity, and inclusion programs may result in billions of euros in revenue, as the company generates approximately one-third of its total annual revenue from the United States.
- The repeal of diversity targets by SAP may have wider implications for the tech industry, potentially leading to a dilution of diversity initiatives as other companies follow suit, and further eroding the progress made in fostering inclusivity and equality in the workplace.
