GM is using nudge theory to help retain the women it hires

Women wanted.
Women wanted.
Image: Reuters/Rebecca Cook
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For years, General Motors invited women to join its employee resources group, GM Women, when they joined the company. Now the automaker is trying a new strategy: It’s enrolling them automatically, and requiring the women to opt out if they don’t want to belong.

The change, which was introduced at the beginning of the year, is intended to help reach new hires who may feel lost in the vast corporation.

“It makes it a lot easier for us to help a person to get acclimated,” said Tamberlin Golden, the incoming president of GM Women, and the plant manager for the company’s transmission factory in Warren, Michigan.

Women enrolled in the employee group have access to a mentorship program and a network to help them navigate what is still a largely masculine world of car making. Only 26% of GM’s approximately 100,000 US employees are women. While all women at the company are eligible to join GM Women, which currently has about 2,500 members, hourly factory workers can only participate in its events while off the clock, not during their work shifts.

Ultimately, the goal of the program is to increase the retention of women, and help create more opportunities for them to advance to GM’s executive ranks. Mary Barra, GM’s first female CEO, has emphasized the importance of retaining women for GM.

Requiring women to opt out, rather than opt in, is an application of “nudge theory,” the idea that policy goals can achieved without mandating behavior, but by making slight changes in how options are presented, to nudge people in the right direction.

The theory was made prominent by economist Richard Thaler and law professor Cass Sunstein in their 2008 book, Nudge: Improving Decisions about Health, Wealth, and Happiness, and has been embraced by governments and other policy makers. It’s most successful application is probably laws allowing employers to automatically enroll US employees in 401(k) retirement savings plans, and require them to opt out, dramatically increasing the number of employees enrolled in the plans. Thaler won the Nobel Prize for economics last year, in recognition of his insights into behavior, and advancing the idea that people don’t always act in their best interest. Sometime they need a little bit of help.

Golden said the change at GM wasn’t made with knowledge of the research—but in application, the new policy is very similar to the changes in 401(k) enlistment. Just as new employees—buried under a blizzard of paperwork—may neglect to enroll in a savings account, they also weren’t signing up for the women’s group.

For a  number of GM’s women, Golden said, “it’s on their list of things to do, and it gets pushed to the back burner.”

Now, she said “I guarantee, we’re going to have more women.”

This story is part of How We’ll Win, a project exploring the fight for gender equality at work. Read more stories here.