The impact of having women in the workplace to the global economy is well known. As Christopher Hitchens once noted, ’the empowerment of women is the only cure we know for poverty and deprivation.’ This is reinforced by the data, with the McKinsey Global Institute claiming that achieving global gender parity in economic activity could add $28 trillion to annual global GDP in 2025 - almost $3 trillion of that going solely to India’s GDP. Research conducted by the International Labour Organization also found economies with high female labour-force participation rates to be more resilient to economic shocks and less prone to slowdowns in economic growth.
It is, however, understandably rare that businesses consider the global economy when determining internal recruitment strategies. It’s important, though, that they recognize the business case for gender parity, which is extremely compelling.
The latest report from McKinsey found that women can contribute as much as 15% to a company’s outputs, simply by addressing skills shortages. Another study, ‘Building Diversity in Asia Pacific Boardrooms,’ which looked at the largest 100 publicly listed companies’ annual reports in 10 Asia Pacific economies: Australia, Mainland China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Singapore and South Korea. It found that firms with at least 10% of female board members - still a shockingly low bar - delivered a 14.9% return on equity, while those with less delivered just 12.6%. Further evidence, if needed, comes from a 2014 Gallup study, which showed gender-diverse business units in retail to have 14% higher average comparable revenue compared to less-diverse business units, and 19% higher average quarterly net profit in the hospitality industry.
Bringing women into the workforce addresses a number of obvious issues that companies are currently suffering from that impact revenue. Perhaps most obvious among these is the skills shortage, which is costing each business up to £50,000 a year in the UK alone. Women make up just a third of the UK’s tech industry, and there is obviously a huge untapped pool of talent there that could quite easily fill the vacancies. The lack of women is clearly not the result of an inherent lack of necessary skills too. A recent study into GitHub, the open-source sharing program, found that code written by women was approved at a higher rate (78.6%) than men (74.6%) when their gender was unknown. This implies that there is no natural difference in talent, simply that not enough women are being encouraged to enter the sector.
One of the issues preventing more women from getting into tech - and all industries - is unequal pay. This is demotivating for female members of the workforce, and also poses a substantial corporate risk. Complaints about pay and promotion are now publicized on websites like GlassDoor.com and social media, which can be hugely detrimental to those seen to engage in the practice - both in terms of sales and recruitment of women.
Women bring a lot to the workforce in terms of diversity of ideas, and qualities. It is well known that a diverse selection of ideas borne through different experiences will have a positive impact on decision making, and women bring a degree of empathy that men, without meaning to generalize, lack. In a recent survey by executive search firm the RSA, 62% of respondents said that they believed ‘women bring empathy and intuition to leadership’, while women were also rated far higher than men for intuition and possessing greater awareness of the motivations and concerns of other people.
A great example of how women in the workforce can benefit business is in Iceland, where they have played a driving role in the country’s rehabilitation after the financial crisis. Audur Capital, a fund which invests in green technology, was founded by Halla Tómasdóttir and Kristin Petursdóttir just before the crunch to set up a firm bringing female values into the mainly male spheres of private equity, wealth management and corporate advice. They emphasized five core feminine values, which Tómasdóttir told the Guardian are, ‘First, risk awareness: we will not invest in things we don't understand. Second, profit with principles - we like a wider definition so it is not just economic profit, but a positive social and environmental impact. Third, emotional capital. When we invest, we do an emotional due diligence - or check on the company - we look at the people, at whether the corporate culture is an asset or a liability. Fourth, straight talking. We believe the language of finance should be accessible, and not part of the alienating nature of banking culture. Fifth, independence. We would like to see women increasingly financially independent, because with that comes the greatest freedom to be who you want to be, but also unbiased advice.’ Audur was the only Icelandic financial company to emerge with its financially health after the collapse in 2008.
Tómasdóttir does not blame males in the boardroom though, she merely notes that women and men are different and have different perspectives on things, which helps shape better informed decisions and responses to crises.
There is already a great awareness of how beneficial diversity can be. A Forbes survey found that 85% of corporate diversity and talent leaders agreed ‘a diverse and inclusive workforce is crucial to encouraging different perspectives and ideas that drive innovation.’ However, the substantial disparity in pay and opportunities that is still well evidenced around the world shows that companies are doing little to rectify the situation. A recent study by PWC cited that 83% of women seek careers with businesses who demonstrate strong records of diversity and equality, and companies need to seen to be leading the way in encouraging women to join before they fall behind.