Reasons to Employ Women in your Workforce: it increases revenues, profits and investor returns

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Why make the efforts to hire women when there are enough men? Why take on the financial liabilities of providing maternity benefits or period leaves or safe transportation back home, 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, Leader 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.

Well one reason is that women have unique traits that can help every organisation – women are known to be more creative, better multi-taskers, better problem-solvers, more collaborative and empathetic, and much more.

The second is that women are responsible for more than 70% of consumption decisions globally – and therefore it is highly likely that a large part of your business’s target audience is women. Hence, it is only befitting to have more team members who can understand your consumer-base better.

Thirdly, women are an untapped talent pool that is known to be more loyal and has a lower attrition rate.

It is for these reasons that employing more women, and building diverse and inclusive workplaces has several benefits for an organisation:

Benefits of Diversity and Inclusion – The Business Case of Hiring Women:

Diverse companies are more innovative

Diverse teams are more productive

    • Gender-diverse teams perform better than single-gender teams for several reasons. Men and women have different viewpoints, ideas, and market insights, which enables better problem-solving, ultimately leading to superior performance at the business unit level. A gender-diverse workforce provides easier access to resources, such as various sources of credit, multiple sources of information, and wider industry knowledge. 

    •  Research suggests 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.

Diverse companies are more resilient

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 

Diversity Increase in revenues

    • Several studies surrounding diversity in the workplace have found that for every 1% increase in gender diversity, company revenue increases by 3%. 

    • One Massachusetts Institute of Technology study found that an even gender split increased a company’s revenue by 41%

    • 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% 

Increase in profitability

    • Having women at the C-Suite level significantly increases net margins – “A profitable firm at which 30 percent of leaders are women could expect to add more than 1 percentage point to its net margin compared with an otherwise similar firm with no female leaders,” the report notes. “So for a firm starting with a net profit margin of 6.4 percent, a 1 percentage point increase in net margin represents a 15 percent boost to profitability.”

Diversity Increase in investor returns

    • A Catalyst study found that companies with more women on their boards performed better when it came to sales, equity, and invested capital.

    • 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 companies, 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 

    • 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 

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. 

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