Why make the efforts to hire women when there are enough men? Why take on the financial liabilities of providing maternity benefits or spend extra on provisions needed for building a workplace where women feel comfortable, when male employees can be hired at a lower costs?
Does it make business sense to hire women in roles that require high commitments travel or working for long hours? Is it prudent to invest money on training women to join the leadership pipeline when they may just quit to look after family ?
Why make all the effort to build gender diverse teams?
If you are the owner, Head or HR manager of a profit-oriented business, it is not unnatural for such questions to cross your mind. Given that workplaces are traditionally and naturally designed for men in terms of culture and processes, making the adjustments to include female employees may seem like a diversion from core business activities or not worth spending resources on.
So, here are some answers – there is ample evidence to show that hiring more women in the workforce is beneficial for businesses and employers:
- Several studies surrounding diversity in the workplace have found that for every 1% increase in gender diversity, company revenue increases by 3%. This is because having a more diverse group in an organisation leads to more opinions, backgrounds, experience and perspectives that can respond to a wider range of customer needs, which in turn leads to higher profitability.
- One Massachusetts Institute of Technology study found that an even gender split increased a company’s revenue by 41%
- A Catalyst study found that companies with more women on their boards performed better when it came to sales, equity, and invested capital.
- Research suggested that diverse and more inclusive workforces demonstrate 1.57x more collaboration among teams, 1.42x greater team commitment, 1.19x greater intent to stay with the company and 1.12x more discretionary effort.
- McKinsey research found that companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians.
- In a study of the Fortune 500, Catalyst reveals that companies in the highest percentile of women on their boards outperformed those in the lowest percentile by 53% higher return on equity, 42% higher return on sales, and 66% higher return on invested capital
- Thomson Reuters examined the performance of companies with more than 30% women on their board compared with those with less than 10% women on their board, and found that companies with greater numbers of women leaders fared better in periods of greater economic volatility
- According to McKinsey, companies across all sectors with the most women on their boards of directors significantly and consistently outperform those with no female representation – by 47% in terms of return on equity and by 55% in terms of operating results
- An extensive 19-year study of 215 Fortune 500 firms reveals that companies with the best record for promoting women outperformed industry revenue averages by 46 percent.
These are few numbers. There is a growing body of research that proves that women make great business sense – that businesses with gender diverse teams show significant benefits over male-dominated businesses. And drilling these numbers into the psyche of hiring managers and HR teams is a vital step towards making businesses women friendly.
Ellenomics 