Businesses with genuine gender diversity,
particularly at senior level, perform better, including seeing significant
profit increases, according to a new report from the Bureau for Employers’ Activities of the International Labour Organization (ILO).
The report, Women in Business and
Management: The business case for change , surveyed almost 13,000 enterprises in 70 countries. More than 57 per
cent of respondents agreed that gender diversity initiatives improved business
outcomes. Almost three-quarters of those companies that tracked gender
diversity in their management reported profit increases of between 5 and 20 per
cent, with the majority seeing increases of between 10 and 15 per cent.
Almost 57 per cent said it was easier to attract and retain talent. More than
54 per cent said they saw improvements in creativity, innovation and openness
and a similar proportion said effective gender inclusivity enhanced their
company’s reputation, while almost 37 per cent felt it enabled them to more
effectively gauge customer sentiment.
The report also found that, at national
level, an increase in female employment is positively associated with GDP
growth. The finding is based on an analysis of data from 186 countries for the
period 1991-2017.
“We expected to see a positive correlation between gender diversity and
business success, but these results are eye-opening,” said Deborah France-Massin,
Director of the ILO Bureau for Employers’ Activities. “When you consider the
efforts companies make in other areas to get just an extra two or three per
cent in profits, the significance is clear. Companies should look at gender
balance as a bottom line issue, not just a human resource issue.”
Gender balance in senior management is defined as 40-60 per cent of either
gender, the same as in the general workforce. The report says that the
beneficial effects of gender diversity begin to accrue when women hold 30 per
cent of senior management and leadership positions. However, almost 60 per cent
of enterprises do not meet this target, meaning they struggle to reap the
rewards. In addition, in almost half of companies surveyed, women account for less
than one in three of their entry-level management recruits – meaning that the
pipeline to senior management may not deliver the talent needed.
Almost three-quarters of the enterprises surveyed had equal opportunity or
diversity and inclusion policies, however, the report says more specific
actions are needed to ensure that women are visible and promoted to strategic
areas of business.
Some key factors preventing women reaching
decision-making positions were identified. Enterprise cultures that require “anytime,
anywhere” availability disproportionately affect women, relative to their
household and family responsibilities, while policies that support inclusivity
and work-life balance (for both men and women), such as flexible working hours
and paternity leave, need to be improved.
Another factor is the “leaky pipeline”, the tendency for the proportion of
women to decline as the management grade rises. The “glass wall” describes the
incidence of women managers in roles such as HR, finance and administration
that are considered less strategic and less likely to lead to chief executive
and boardroom positions. Fewer than a third of enterprises surveyed had
achieved the critical mass of one third of women board members. Around one in
eight reported they still had all-male boardrooms. More than 78 per cent of
enterprises who responded had male CEO’s, and those with female CEO’s were more
likely to be small enterprises.
“The business case for getting more women into management is compelling,” said
France-Massin. “In an era of skill shortages, women represent a formidable
talent pool that companies aren’t making enough of. Smart companies who want to
be successful in the global economy should make genuine gender diversity a key
ingredient of their business strategy. Representative business organizations
and employer and business membership organizations must take a lead, promoting
both effective policies and genuine implementation.”