Gender equality is not only fair, it is profitable. Despite this, gender equality is not happening, anywhere. In 2018, Only 24 of Fortune 500 CEO’s were women, which represented a 25% decrease from 2017. In fact, there are fewer women among the Fortune 500 Chief Executives than there are people named ”James”.
Even countries like Norway, an early adopter of social gender equality has a long way to go to achieve gender equality in business. Only 16% of CEO’s in Norwegian companies are women, and 10% of all management boards consist of women (SSB, 2017).
OK, so not all women are business leaders – so what?
Achieving gender diversity in a company demands a reinvention of internal policies and recruitment routines. Both activities can take time and, dauntingly, can cost money. While we know these are core reasons why companies stall any gender diversity efforts, let the following statistics be a testament to why you should not:
McKinsey & Company reported in 2015 that companies in the top quartile for gender diversity on executive teams were 15% more likely to experience above-average profitability than companies who found themselves in the fourth quartile. By 2017, this number had risen to 21%. These numbers bears testament to the impact gender diversity can have on profitability, and competitive edge.
While you un-pretzel your brain and check whether the sources I’ve provided are reliable, I can tell you this: it is time to stop merely discussing gender diversity as a “potential area of focus” but rather view it as “work that should have started yesterday”. If you require more evidence on why immediate action is now indispensable, here’s the downside of opting out:
If you combine the lack of cultural and ethnic diversity with lack of gender diversity, companies in the bottom quartile were 29% less likely to achieve above-average profitability. Yes, twenty-nine per cent.
By now we all agree that the potential upside is too great to not jump on the bandwagon, and all of us should be frightened by the potential downside. But where do we go from here?
Here are a few things you can do to improve your company’s gender diversity rating:
1. Job advertisements
Recent studies (including this one) exhibit that women and men react differently to words. Companies struggling to attract women should take a look at their word usage in job advertisements. There are several tools available online that can determine whether words utilised in your ads are more or less likely to attract female or male talent. After all, attracting the right kind of people, starts with the right recruitment processes. Making changes to your ads is one cost effective way to kick start your gender balance process.
2. Parental leave and flexible work schedules
While the number of working women is at an historical high, female representation declines after the birth of their second child. This greatly damages possibilities of achieving gender balance. Additionally, not wanting to leave work results in couples deciding against having more children. This opens a nasty can of worms for governments looking to ensure their national economy for generations to come. But on the bright side, there are ways to mitigate this. Companies (and governments) must allow men the same parental leave as women and ensure there are no social stigma of men choosing to stay home with their child. Allowing flexible work schedules and work-from-home-days for mothers and fathers are other measures that allow more women to build a career (and for families to have more children).
3. Equal pay and mentorship
Laws seeking to ensure men and women are paid equal salaries for work of equal value have been in place in many developed countries since the 1960s. Despite this, if the decrease in the pay gap continues at the current rate, it will take 217 years until women receive equal pay. Statistics highlight that the pay gap is much higher for women with children. Implementing policies and regulated measuring of the pay gap to ensure this does not happen in your company can increase the proportion of women who decide to seek leadership roles, also after starting a family. Offering mentorship programmes tailored to women who want to pursue managerial roles or have potential to become successful leaders can further aid this process.