A solid diversity and inclusion strategy is beneficial for any company. It creates the potential to acquire new talent with new perspectives, origins, and experiences and increase its capacity to produce - and innovate.
Ensuring equal representation of women in the workplace can have positive effects across your entire organisation. When more women work, economies grow. For example, increasing the female employment rates in OECD countries to match that of Sweden could boost GDP by over USD6 trillion, according to Women in Work Index 2021 by PWC.
How are organisations that don't realise the importance of women in the workplace missing out? Besides doubling the talent pool, more women may also improve the company's performance. Here are 5 benefits of gender diversity in the workplace:
1 - A more innovative workforce
Diversity - from gender diversity to age, culture and race - is one enhancer to foster creativity and innovation. Having an inclusive team means integrating different world views that search for the best and most innovative solutions. “Diversity jolts us into cognitive action in ways that homogeneity simply does not”, said Columbia Business School Professor Katherine Phillips in “How Diversity Makes Us Smarter”.
Men and women will inevitably have different experiences and backgrounds, which shape their approach to business. Challenging each other and collaborating with people who think differently can breed creativity and promote innovative ideas that push organizations forward.
2 - Women excel at the soft skills needed for business leadership
Women's brains are hardwired to focus more on the emotional nature of things and nurturing emotional space. As so, they typically excel in emotional intelligence when compared to their male peers.
After seven years of rigorous research based on a landmark study by Fred Kiel of more than 100 CEOs and over 8000 of their employees' observations, leaders of strong character achieved up to five times the ROA for their organisations, as did leaders of weak character.
Women's leadership style can strengthen the employee work ethic, critical thinking skills, and collaboration, as reported in an article exploring the "hidden advantage of women in leadership" in Inc. Through greater emotional intelligence, both men and women can boost their organisations' performance, accomplishing their internal and external stakeholders' goals.
3 - Women represent substantial economic power and offer important consumer insight
Women have a third of the world's wealth under their control and have become a sizable economic force. They are increasing their wealth faster than before—adding $5 trillion to the wealth pool globally every year—and outpacing the growth of the wealth market overall, according to a 2020 study by Boston Consulting Group.
Despite this fact, only 11% of creative directors are women. With the female consumer's power in mind, it's evident that women are best placed to tap into that opportunity and bring valuable consumer insight to the table. Recognizing that the women's segment is not a marketing opening but a massive business opportunity is essential as women will personalize their approach to meet individual clients' specific needs and priorities, regardless of gender.
4 - Women increase business profitability
Gender diverse business units have higher average revenue than less mixed business units, presenting higher sales and profits than male-dominated teams. According to a 2019 study conducted by the Wall Street Journal, the 20 most diverse companies had an average annual stock return of 10% over five years, versus 4.2% for the 20 least diverse companies.
This data also reflects on women in high positions. Fortune 500 companies with the highest representation of women on boards financially outperform companies with the lowest number of women on board. The 2020 Progress Report by MSCI shows that this representation has a relationship to corporate financial performance - more women on boards reflect on higher productivity.
5 - Improved recruitment and reputation
More than ever, strong policies on diversity and inclusion are prioritized by people entering the workforce. As reported by PWC research, female millennial seeks out employers with a strong record on diversity, with 86% saying employer policy on diversity and workforce inclusion is important when deciding whether or not to work for an employer.
Being an inclusive employer will also demonstrate your positive values as a company that paves the way for fair and equal opportunities, enhancing your reputation in the recruitment marketplace. You cannot recruit a diverse workforce without having a healthy culture that attracts talent.
The choices companies make today could shape the workplace on gender equality for decades to come. There’s not a one-size-fits-all approach because companies can use several different recruitment strategies to balance the diversity of their workforce. Still, the investment made in building a more flexible and empathetic workplace will nurture a culture in which women have equal opportunities to achieve their potential over the long term.