Businesses that actually have gender diversity, especially at the management level, perform better, including in the form of substantial growth in profits. This is stated in a new report prepared by the Bureau of the International Labor Organization (ILO) on activities for the benefit of employers.
The report, entitled “Women in Business and Management: The Business Case for Change”, was based on a survey of nearly 13,000 businesses in 70 countries. More than 57 percent of those surveyed confirmed that gender diversity improves business outcomes. Nearly three quarters of companies that monitored gender diversity in their governing bodies saw profit margins between 5 and 20 percent. For most of them, its growth was from 10 to 15 percent.
Nearly 57 percent of those surveyed said that gender diversity makes it easier to find and retain talent. More than 54 percent say it fosters creativity, innovation and transparency. A similar number say that attention to gender has strengthened their companies’ reputation, and almost 37 percent say that it helps them more accurately determine the mood of customers.
Evidence also suggests that, at the national level, increased female employment has a positive effect on GDP growth. The authors of the report came to this conclusion after analyzing data for 186 countries for the period from 1991 to 2017.
“We assumed that business success was directly related to gender diversity, but the results were a revelation to us,” said Deborah France-Massin, director of the ILO’s Office for Employers. “They are especially noticeable against the background of the efforts that companies are making in other areas to help out at least two to three percent of profits. Companies should consider ensuring gender balance as one of the fundamental tasks, and not just as a matter of personnel policy. “
It is believed that gender balance in senior management, as well as in the workforce as a whole, is evident at a percentage of 40 to 60 in either direction. The positive impact of gender diversity begins to grow with 30 percent of women in senior management and leadership positions, according to the report. However, almost 60 percent of enterprises do not meet this condition, which means that it is difficult for them to reap the benefits of gender diversity. In addition, in almost half of the companies surveyed, fewer than a third of candidates for entry-level management positions are women, which means that valuable talent may not be able to get onto the assembly line for top-level recruiting.
In almost three quarters of the businesses surveyed, measures are being taken to ensure equal opportunity, diversity and inclusion, but more concrete steps are required for women to play a more prominent role and be able to be promoted to strategic business areas, according to the report’s authors.
The report identified a number of important factors hindering the advancement of women to leadership positions. A corporate culture built on the principle of a willingness to work anytime, anywhere has a particularly strong impact on the position of women, given their home and family responsibilities. Existing measures to ensure that all workers are responsive and work-life balance (for both men and women) – such as flexible working hours and parental leave – need to be improved.
Another factor is the so-called “leaky pipeline”, as the decline in the proportion of women as they move up the career ladder is called. “Glass wall refers” to the increased presence of women in managerial positions in areas such as human resources, finance, administrative work: these areas are considered less important strategically and those who work with them are less likely to be promoted to the top management level or to the board of the company. In less than one third of the surveyed companies on the boards of directors, the proportion of women reaches the minimum required level of one third. And about every eighth board consists exclusively of men. More than 78 percent of the companies that provided data to the compilers of the report have a male CEO, and if it is a woman, then it is usually a small business.
“The economic rationale for attracting more women to management is clear,” says Frans-Massen. – In the era of a shortage of qualified personnel, women represent a huge talent pool, which business does not really use. For forward-thinking companies looking to succeed in the global economy, gender diversity should be viewed as an essential element of their business strategy. The leading role here should belong to representative entrepreneurial organizations, associations of businessmen and employers, which can take upon themselves both the development of effective measures in this direction, and their effective implementation. “
