Gender Diverse Companies Likely To Outperform Their Counterparts Now More Than Ever
As the world grapples with the COVID-19 crisis on the health front, what it brought with it is yet another unprecedented crisis – The Economic Crisis. While experts all around the world introspect over how this crisis can be dealt with, a recent report by McKinsey & Company featured the importance of gender diverse companies amidst this crisis. According to the report, most diverse companies are now more likely than ever to outperform their counterparts with skewed gender statistics, financially. The report considered both- gender and ethnic diversity on board. Here are some key highlights:
- 57 per cent companies from 70 countries note gender diversity initiatives affect them positively
- Simply Recruiting More Women Doesn’t Work.
- Companies Also Need To Give Them Proper Inclusion And Representation
- Companies with women in leadership are 25% more likely to see profitability
Companies With Greater Percentage Of Women Executives Outperform Those With Lesser Percentage Of Women Executives
One key finding of the report was that companies, where the percentage of women executive lies somewhere north to 30 percent, are more likely to outperform companies that have this statistic somewhere in between 10 to 30 percent. Moreover, the latter category is also capable of outperforming companies with no women executives at all.
For the global set of data that the company analyzed, the percentage of gender diversity in companies on an average rose just one point, from 14 in 2017, to 15 in 2019.
Though the prospects of increased gender diversity seem to be fruitful, the situation on the ground is still regretful. For the global set of data that the company analyzed, the percentage of gender diversity in companies on an average rose just one point, from 14 in 2017, to 15 in 2019.
To substantiate this report, we can also consider another report by the Bureau Of Employers’ Activities, International Labour Organization (ILO), which showed that businesses with gender diversity perform better, both in the terms of profit earning and overall performance. More than 57 per cent of the 13,000 companies from 70 countries across the world said that gender diversity initiatives affect the organizations positively.
Shalini Kamath, Founder and CEO, SK & Associates told SheThePeople, “While this is true that the percentage of women is low in leadership positions, however, there are enough qualified, experienced, senior women in corporate India to sit on the boards of the companies. Two things are essential – the boards have to make themselves attractive for women to find value in being part of them and the companies need to dig into the larger pool rather than chase the same few names. The companies need to make the shift from recognized names to skill-sets and value-add from board members.”
Companies, where the percentage of women executive lies somewhere north to 30 percent, are more likely to outperform companies that have this statistic somewhere in between 10 to 30 percent.
Simply Recruiting More Women Doesn’t Work. Companies Also Need To Give Them Proper Inclusion And Representation
The report stated that in the year 2019, companies in the lowest sections of the gender diversity table were 19 per cent more likely to underperform on profitability, as compared to their counterparts having a better representation of women. While this number stood at only nine per cent in 2015, the increased under-profitability perspective has highlighted the importance of gender diversity in organizations.
Sunita Wazir, a Mumbai based HR Professional with 23 years of Industry Experience told SheThePeople, “To me, it’s natural that the woman being the decision-maker and the top buyer in the industry by virtue of managing both careers and household budgets- should be equally present in the design stage of any product. And from this follows the entire chain – production, distribution and advertising to selling. To speak to a buyer, a successful organization needs the voice of women at every stage. No amount of social conditioning on best roles for men and women can take away from the fact that companies with a gender-balanced workforce will thrive!”
The report, which calls itself an indicative study, suggested the following measures to ensure the inclusion of women on board.
- Ensure the representation of diverse talent.
- Strengthen leadership accountability and capabilities for I&D.
- Enable equality of opportunity through fairness and transparency.
- Promote openness and tackle micro-aggressions.
- Foster belonging through unequivocal support for multivariate diversity