Gender diversity is an answer to many of the problems currently facing organisations. Much of the debate on this topic centres on gender diversity as a problem to be fixed, but recently there has been increased discussion on the merits of gender diversity and what it can do for your business. It is vital that companies look at women in the workforce not as a gender issue, but as a business one.
What is the business case for gender diversity? There are compelling reasons for having a more gender diverse organisation.
The world’s population is shrinking, and the talent pool along with it. McKinsey & Co. have predicted that employers in advanced economies will face a shortfall of 16-18 million college educated workers by 2020. Nowhere is this problem more pronounced than in STEM (Science, Technology, Engineering and Maths). Women occupy only 7% of the STEM positions in Europe and only a quarter of the positions in Ireland. Talent is the new precious resource – companies cannot afford to leave anyone by the sidelines.
Millennials will make up the majority of the workforce by 2025. We are already seeing the world of work adapt to suit this generation’s values and concerns. Offering a diverse organisation is one way to appeal to the millennial mindset. Diversity can be inspiring, for both millennials and organisations. People from diverse backgrounds challenge each other, and from this comes the most valuable ideas. Millennials recognise this and are much more likely to work for an organisation like this. Given they will be 75% of the workforce in ten years, this cannot be ignored.
According to recent report, Fortune 500 companies with the highest representation of women board directors are significantly more successful financially, than those with a low representation of women board directors. According to Facebook COO Sheryl Sandberg, ‘the social world is led by women’. As brands live and die by the power of social media it makes more sense that companies incorporate more women in the decision making process. Globally, women control more than $20 trillion in annual consumer spending. In Ireland, they account for over 85% of all purchasing decisions.
Companies are losing their best people because they are not able to keep them engaged. Worldwide work engagement is now under 15%, according to Gallup. Having more female friendly policies will keep top female talent more engaged. According to a study of women in engineering careers, women are less likely to leave their work if supported in their career development. This perceived support even negates the effects of a poor manager or a difficult microclimate. As well as increasing motivation and innovation on the job, tackling gender diversity will help retain and attract staff.
Credit Suisse found that companies where women made up more than 10% of top operational jobs had a 27% higher return on equity and a 42% higher ratio of dividend pay outs, compared to companies with less than 5% in such positions. It makes sense, therefore, to talk about women in work not so much as a diversity issue but as a business imperative. Gender diversity is not a problem, it’s a solution!