Businesses with genuine gender diversity, particularly at senior level, perform better and see significant profit increases, according to a new report from the Bureau for Employers’ Activities of the ILO. The report says that gender diversity effects beneficially when women hold 30% of senior management and leadership positions, although almost 60% of enterprises do not meet this target.
The report, entitled ‘Women in Business and Management: The business case for change‘, surveyed almost 13,000 enterprises in 70 countries, finding 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.
- More than 57% 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 5-20%, with the majority seeing increases of between 10-15%.
- Almost 57% said it was easier to attract and retain talent.
- More than 54% 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% felt it enabled them to more effectively gauge customer sentiment.
- Almost 75% of the enterprises surveyed have equal opportunity or diversity and inclusion policies, but more specific actions are needed so that women gain the experiences that prepare them to be promoted to strategic areas of business. While some countries have narrowed the gender pay gap, it remains significant overall. According to the ILO 2018 weighted global estimates, the gender pay gap globally is 22% when using median monthly wages.
Companies should look at gender balance as a bottom line issue, not just a human resource issue,
…says Deborah France-Massin, Director of the ILO Bureau for Employers’ Activities.
The effect of female employment on GDP
Women are catching up with men in terms of labour market opportunities, and public policies continue to be shaped to facilitate their effective participation. A growing number of studies have demonstrated the positive link between women’s participation in the labour market and GDP growth. For example:
- The Organisation for Economic Co-operation and Development (OECD) (2015) estimates that a 50% reduction in the gender gap in labour force participation across the OECD economies would lead to an additional gain in GDP of about 6%, with a further 6% gain if complete convergence occurred.
- PwC (2018) estimates that if OECD countries increased their female labour market participation rate to the same level as Sweden (80%), this would boost GDP by over US$6 trillion.
- The World Economic Forum (2017) predicts that if the global gender gap in labour market participation is closed by 25% by 2025, an additional US$5.3 trillion would be added to GDP globally.
Women in leadership
Women in leadership positions specifically remains a hot issue across all business sectors, and maritime included. Of 6,500 engine officers at sea currently, only 1% are estimated to be female.
Gender balance in senior management is defined as 40-60 % 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 % of senior management and leadership positions. However, almost 60 % 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.
In an era of skill shortages, women represent a formidable talent pool that companies aren’t making enough of.
…continues Ms. France-Massin.
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 % of enterprises who responded had male CEO’s, and those with female CEO’s were more likely to be small enterprises.
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.
Under its Sustainable Development Goal 5 on gender equality and empowerment of women and girls, the United Nations aims, among others, to ‘ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life.’
The last months have been an interesting year for women in shipping. IMO has recently shed its efforts to raise awareness on the issue, with the decision to set ‘Empowerment of women in the maritime sector’ as the theme of World Maritime day for this year, while it has supported several trainings for women in port management, over the recent months.
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