Diversity Push Inflates Demand for Female Leaders

Efforts to boost gender diversity in leadership are triggering a talent bidding war, as companies chase a small pool of experienced women without expanding opportunities for female newcomers. Australian firms are aggressively competing for senior female executives to fulfil board quotas, but experts warn this could inflate salaries without fixing deeper workforce imbalances.

Right now, many companies are under pressure to meet gender equity targets, particularly as large government contracts could soon be tied to diversity milestones. While most organisations support diversity, equity and inclusion (DEI) programs, some leaders caution that rushing to appoint women at the top misses the point and overlooks the lack of women in entry-level roles or technical positions.

The reality is that qualified female leaders are in short supply and demand is driving up labour costs. Organisations are pulling from the same limited talent pool without growing it from the ground up. This mirrors trends in other equity-focused recruitment areas too. For instance, some sectors are also struggling to meet Indigenous hiring targets due to limited representation, which similarly ramps up competition and raises costs.

This shortage suggests a systemic issue in how women are recruited and retained across industries. Without more apprentices, graduates and early-career pathways for women, companies risk recycling the same talent rather than building real change. While DEI goals are well-intentioned, success seems to hinge on long-term investment in workforce development and not just boardroom representation.

Source: Australian Financial Review, ActionAid, ACCC