For companies looking to boost profits, the answer may be to hire more women in executive roles.
In a recent survey of 366 public companies across a range of industries in Canada, Latin America, the United Kingdom and the United States., the consulting firm of McKinsey & Co. found that those with a balanced number of men and women in leadership were more profitable than companies without gender equity.
Specifically, companies in the top quartile for gender diversity were 15% more likely to have financial returns above their national industry medians.
McKinsey found that businesses with an equal number of male and female leaders are more skilled at recruiting and keeping top talent, which reduces the expense of losing high-level executives.
The diversity and differing viewpoints also help companies with customer relations and business decisions.
The survey underscores growing sentiment that gender equity is more than politically correct. It’s good business.
However, achieving it can be easier said than done. While companies are trying to increase the number of women in executive roles, research has shown many are struggling to because they don’t have policies to prevent qualified women from falling off the corporate ladder.
Still, the case for having more women leaders is strong.
While most major companies include gender diversity initiatives, many of the programs aren’t effective. McKinsey found that nearly two-thirds of employers who participated in the survey had upwards of 20 gender-related efforts, yet women had less than 25% of top-level positions in 92% of those companies.
Other research by McKinsey done in 2012 found that though women represented 37% of the overall workforce, they only held 22% of middle management positions, 14% of senior management positions, 9% of executive positions and 2% of CEO positions.
The imbalance reflects the persistent post-war workplace environment with structured hours and a requirement to be at the office and available to work at all hours.
The Internet made it easier for people to work from anywhere, but earning the top jobs often requires having a presence in-person and some after-hour commitments.
Factor in expectations that mothers do most of the domestic duties, and it can be difficult to take the traditional path.
A good solution for employers is to hire, train and promote talented women so companies have a pipeline of qualified female candidates ready and eager to step into senior positions.
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