Why is gender equality essential for business growth?
In my previous blog, I focused on the history of International Women’s Day. International Women’s Day is a global, annual holiday celebrating the achievements of women: social, economic, cultural and political, and will be on the 8th of March this year.
This blog will focus on the topic of gender equality from a business perspective. How is gender equality linked to business performance and growth? Why should companies strive to make their workforce and workplace gender diverse and inclusive?
The United Nations has set gender equality in its top five 17 Sustainable Development Goals (SDGs) for 2030. The World Economic Forum's (WEF) Global Gender Gap Report 2022 reflects the progress that has been made. The global gender gap was closed by 68.1% in 2022, reducing the time it is estimated to reach full parity from 136 (as estimated in 2021) to 132 in 2022. Regarding workplace equality, this is estimated to take another 151 years, that is to say it will be achieved in 2173. An argument could be made that the focus should be on maintaining the current work since we will eventually reach gender equality in business instead of trying to encourage more progress. However, let us consider a finding in the Women Count 2022 report which showed that each FTSE 350 company is losing out on an average of £900 million in pre-tax profit due to the gender imbalance in executive committee roles, it is clear that more action should be taken. The longer we take to close the gender gap, the more money and business companies lose.
Another survey by the International Labour Organization in 2018 reveals that companies with an inclusive business culture and policies regarding inclusivity were predicted to achieve the following:
A higher profitability and productivity by 63%
A better ability to attract and retain talent by 60%
Greater creativity by 59%
An enhanced company reputation by 58%
A magnified ability to engage consumer interest and demand by 38%
Concerning senior levels, companies with gender-balanced boards are more likely to have elevated business results by nearly 20%.
These reports show that despite the advantages of gender equality has not changed and is still essential for business results and growth.
Become the leading gender inclusive industry
In a previous blog, I discussed how the banking industry was a historically male-dominated industry and was behind other industries in its advancements for gender disparity at senior levels. The telecommunications and technology industries are also in a similar position. In the telecommunications industry, a report published that four of the companies they surveyed did not have a single woman director and only one had more than 40% of women directors. In the technology industry, 42% of women have considered quitting to join other industries due to the barriers they face.
The telecommunications and technology industries are prevalent and greatly influential in our lives as we face digital transformation in our daily lives. Their technical capabilities were greatly demonstrated during the pandemic when businesses turned to online, off-site, hybrid work. The industry must now address the big issue of ensuring that the industry’s people reflect the diversity of their global markets. Not only will this allow further progress and growth, it will also ensure that companies can retain their talents, especially with Millennials and Generation Z who are known as being the job-hopping generations.
Retaining talent
The 2022 Women in the Workplace report from McKinsey, in partnership with LeanIn.Org revealed that women leaders are leaving their companies at the highest rates in years, and at a higher rate than men leaders. Voluntary attrition of women leaders in 2021 was at 10.5%, compared to the previous year when it was under 8%. This percentage is put into perspective in the report: “for every woman at the director level who gets promoted to the next level, two women directors are choosing to leave their company”. This also suggests that young women are and will do the same. The issue is no longer solely about attracting talent. Talent must be retained in order to make significant and sustainable growth.
But why are women choosing to leave their companies? A key reason is that they are seeking a different working environment and culture. Women seek companies that are more flexible and more committed to DEI and the well-being of their employees. 40% of women leaders reported that their work associated with DEI wasn’t acknowledged in their performance reviews. This means that women leaders must do more work to receive the same performance review as a male counterpart. This accounts for the figure that 43% of women leaders feel burned out compared to only 31% of men leaders. This also makes it more difficult for women leaders to advance. Naturally, they would be attracted to a workplace where their work is recognised and appreciated.
Another key feature is the option of working remotely is important to women. This is not just about flexibility but the choice provides them with a higher level of psychological assurance and safety. Flexibility is also key in encouraging women to re-enter business after career breaks. The prospect of returning to an industry can be challenging especially after a break. Therefore, maximum support should be offered to them so that they can make a smooth return and advance towards senior leadership positions.
It is likely that companies that fail to take action will struggle to recruit, but more importantly, retain the next generation of talented women leaders. This highlights why diversity and inclusion come as a pair. It is only when we have both that workplaces become attractive to prospective employees and that businesses can progress.
