08
Mar

There is no business case for a homogenous workforce

In our previous blog, we looked at gender diversity on boards in light of the impending legislation on increased gender balance. This blog explores the benefits of gender diversity throughout an organisation and how to achieve it.

Women continue to be underrepresented in corporate leadership positions in Europe. The recently published Gender Diversity Index 2021 shows that a shockingly low 7% of companies in Europe are led by women and corporate leadership remains heavily male-dominated: of the 668 companies reviewed, women constitute 30% of general leadership functions and 19% of executive level of company decision-makers [2].

Gender diversity – what’s really in it for business?

Diverse workforces bring many benefits to companies, including increased profitability, creativity, stronger governance and better problem-solving. A recent study by the Boston Consulting Group shows that diverse management teams can achieve 19% higher revenues [3]. Without a workforce that reflects wider society, companies voluntarily neglect their competitive advantages and stagnate their growth. There is simply no business case for a homogenous workforce.

Gender balance enables sustainable development

Women’s representation in decision-making roles across sectors can increase action on addressing today’s greatest global challenges. Creating sustainable solutions and growth requires a diverse workforce with a diverse skillset[4]. A 2021 study found that, since the Paris Agreement, companies with greater gender diversity reduced their CO2 emissions by around 5% more than firms with more male managers[5]. When women are empowered, everybody benefits, including the planet.

Companies must take urgent action

We need to ensure an equal pipeline of future female corporate leaders. This starts with ensuring companies drive gender equality within their organisations. Companies must urgently:

1. Drive C-suite commitment and action on gender diversity

Top performing companies have their CEOs and executive teams put gender diversity at the top of every agenda, showing unwavering commitment and action.

2. Take deliberate and intentional gender diversity action

Targeted action via in-depth analysis of barriers coupled with visible and consistent commitment throughout the organisation can help raise awareness and help break stigma.

3. Encourage gender diversity transparency and reporting

Public disclosure of data helps monitor progress, identify barriers and increase representation.

4. Create an enabling environment via talent management and smart recruiting

Mentoring, training programmes, networking opportunities and flexible working arrangements and work-life practices are key for retaining female talent and leaders. Companies must also develop their future female leaders through targeted outreach to those yet to enter the workforce.

5. Collaborate to break down systemic barriers

No company can solve this alone. Business must work across their industries, as well as with governments, NGOs, educational institutions and others to break down the systemic barriers to gender diversity.

6. Develop and embed a gender diversity strategy

A clear focus on gender diversity and embedding it throughout the organisation helps companies keep trusted and talented employees while attracting the next generation of employees and female leadership.

Leaders across business, finance, and the public sector need to raise the bar and increase accountability. Leaders and stakeholders need to not just continue to walk the talk, they need to run it.

Read the Gender Diversity Index 2021 here.

 

[2] Gender Equality Index 2021:
https://europeanwomenonboards.eu/wp-content/uploads/2022/01/2021-Gender-Diversity-Index.pdf
[3] WEFORUM 2019: https://www.weforum.org/agenda/2019/04/business-case-for-diversity-in-the-workplace/
[4] OECD 2020: https://www.oecd.org/corporate/OECD-G20-EMPOWER-Women-Leadership.pdf
[5] Does gender diversity in the workplace mitigate climate change? https://www.bis.org/publ/work977.pdf