Gender Diversity Is Good for Business
- February 23, 2017
- Brian Keefer
I confess. I am a man. And although the call for gender equality or gender equity is often assumed to be a women’s issue, I recognize that gender diversity is a priority for everybody. And it’s not just because I happen to be married to a woman or the father of one. Gender diversity—or the lack of—impacts all of us in many ways.
Since money often gets people’s attention, let’s start with the corporate world, where there is growing evidence of the benefits of gender diversity. A global McKinsey analysis shows that gender-diverse companies are 15 percent more likely to financially outperform the industry median. When you start to look at data about companies with women in leadership positions, the results are even more startling. A 10-year analysis of 300 U.S. start-ups by venture capitalist firm First Round found that those companies with at least one female founder performed 63 percent better than those with all-male founding teams. In addition, a study at Lehigh University, which looked at 90,000 companies in 35 countries, found a clear link between market performance and the number of women on corporate boards (and even more distinctly seen in companies with women at all levels of leadership).
While many industries have improved overall gender diversity, the greatest success has been at the entry level. According to a 2016 McKinsey report on women in the workplace, the percentage of women in advanced roles drops as you look up the career ladder. For example, in healthcare and pharmaceuticals, you see 68 percent of entry-level roles held by women, but by the time you reach the VP level, the percentage drops to 36. And only 24 percent of C-suite level roles are held by women. You see similar numbers in other industries. In banking and financial services, the numbers go from 57 percent at the entry level to 21 percent at the top level. Overall, 40 percent of today’s global workforce are made up of women, yet just 5 percent of global CEO positions are held by women.
So if making gender diversity a business priority can lead to financial benefits, what must business leaders do to realize their companies’ full potential? Start by holding up a mirror and asking hard questions about where your company would rank for gender diversity.
- Look at your hiring strategy. Are you attracting and onboarding as many women as you should? But don’t hire just to fill quotas. Be sure you’re hiring the best candidates, including women.
- Examine your culture. Does it enable women and men to form trusting relationships and motivate them to perform at their highest potential?
- Evaluate how you’re promoting and developing people. Are women being given the same opportunities as men?
- Review your policies. Do you have policies that put anyone at a disadvantage?
- Set diversity and inclusion goals, and hold managers and leaders accountable.
There’s no magic potion that will automatically establish gender diversity in the corporate world. However, gender diversity is about equity—being fair to women and men—and equality—treating everyone the same. Seeking gender diversity isn’t about tipping scales. It’s about fairness to everybody—women and men.
And it’s about improving your bottom line.