By Isabel Valle , Global Leadership Coach and Mentor, Global Room
According to the latest Catalyst Research, the share of women in senior roles globally is increasing. In 2019, 29% of senior management roles were held by women, the highest number ever on record. There is no lack of qualified women to fill these leadership positions.
And yet, despite the fact that nowadays women make up 50% of the workforce and have higher education levels than men, we are still a long way from overcoming the well-known obstacles faced by women in reaching leadership roles.
The problems we face today – from our local communities to the workplace, and the global stage – require diverse leaders who have a variety of skill sets. Women bring the additional skills needed, as well as a different perspective to drive effective solutions. So, what is the hold up?
Gender inequality is not only a pressing moral and social issue but also a critical economic challenge. If women do not achieve their full economic potential, the global economy will suffer.
The economic benefits of bringing more women into the labour force and into senior roles are greater than previously thought. A report published last year by the McKinsey Global Institute found that if every country could narrow its gender gap at the same historical rate as the fastest-improving nation, the world could add $12 trillion to its annual gross domestic product by 2025.
We must therefore create awareness of the business case for inclusion and diversity, so that companies can use it as a source of competitive advantage, and a key enabler of growth.
Here’s why having more women leaders is good for business – and your bottom line:
Women in leadership roles boost company performance. From increasing productivity and enhancing collaboration, to inspiring organizational dedication and decreasing employee burnout, the benefits of having women in the workplace are well documented.
Studies report that businesses with genuine gender diversity, particularly at senior level, perform better and see significant profit increases. An ILO report states that gender diversity affects beneficially when women hold at least 30% of leadership positions, even though more than 60% of businesses do not meet this target.
Companies with more female executives make more money. A Peterson Institute for International Economics survey found that having women at the C-Suite level significantly increases net margins.
Research by Catalyst also demonstrates that companies with higher female representation in top management outperform those that don’t by delivering 34% greater returns to shareholders.
According to McKinsey, gender-diverse executive teams are 21% more likely to experience above-average profitability. When you consider the efforts that companies make in other areas to get just an extra two or three per cent in profits, the significance is clear. Companies should look at gender balance as a bottom line issue, not just a human resource issue.
Companies with the highest percentage of women show the best performance and financial results. Unfortunately, many companies still don’t view gender diversity as a priority, because they don’t see how it could benefit their bottom line.
In an era of skill shortages, women represent a formidable talent pool that companies aren’t taking enough advantage of. Gender diversity makes it easier to attract and retain talent.
A strong female presence also benefits the workplace environment. According to the Peterson Institute, having female senior leaders creates less gender discrimination in recruitment, promotion and retention. That gives a company a better chance of hiring and keeping the most qualified people.
Speaking at a World Economic Forum event last year, Jack Ma, co-founder of Alibaba Group, said women are the secret of the business’s success. “If you want your company to be successful, if you want your company to operate with wisdom, with care, then women are the best part of the ‘secret sauce’ of our success.”
Arguably, one of the most important ingredients for creative thinking is diversity. We know that diverse teams produce more creative results than teams in which all members are from a similar background.
Creativity is one of the most important qualities of a modern business leader, which drives productivity and fosters success in a company. The role of creativity in leadership is vital to any organization’s survival in the ever-changing business and cultural climate that exists today, and women bring new answers.
Another reason gender parity is good for your company: Having more women in senior management may improve a company’s reputation and give it an edge in the talent wars.
Companies with good reputations have more diverse viewpoints among leaders. At those companies with strong reputations in their industry, you’ll find twice as many women leaders than at those with weaker reputations, according to recent research from communications firm Weber Shandwick.
A good reputation is more than a feel-good concept. It can inspire consumers to choose your product or services over that of a competitor. And it can help companies recruit quality employees. Consumers and employees alike increasingly care about the company behind the brand. They want to know a product is being made by a company that is going to be around for a while, and that it invests in its people.
The most admired companies, such as Apple – No. 1 on Fortune’s list – have twice as many women at the senior management level than less reputable companies. Across the board, Apple reports that 29 percent of its leadership roles are filled by women.
Women represent huge economic power and offer important consumer insight. It’s been estimated that women contribute in excess of $20 trillion in consumer spending every year, representing a bigger growth market than China and India combined. Women also account for 85% of consumer purchases.
Tomorrow’s clients and consumers are going to demand diverse teams and intelligent communication that matches the market potential and actual consumer base. Companies need to talk to women as women, and for that, they’re going to need female leaders who can relate to their products.
A clear link exists between diversity in corporate leadership and business performance. With the number of women in business leadership remaining frustratingly low everywhere, it is costing companies around the world big.
The business case for getting more women into management is compelling. Smart companies who want to be successful in the global economy should make genuine gender diversity a key ingredient of their business strategy.
The target is clear—to get more women into leadership roles. For companies to thrive, we must view gender diversity as a business case – an absolute necessity for development and progress at a global scale.
Gender diversity is simply a business imperative for growth and competitiveness, and soon all companies and corporate leaders will have to acknowledge and adapt to this fact in order to remain successful.
Having more women in leadership positions means more perspectives, a greater diversity of ideas, better morale and company culture, improved employee satisfaction and retention and higher profits. Simply put, pursuing gender equality at the leadership level is useful for individual businesses, for countries and their GDPs and the world at large.
We can’t unlock the full potential of women in the workplace until we see how far from equality we really are. That means it is up to all of us to raise awareness of the true status of women in leadership and celebrate each woman’s accomplishments. The world needs the talents, values, and contributions of women to be seen as just as important as those of men in order to create a world that provides economic opportunity to us all.
In my own experience, not just working in senior leadership roles but also having coached and mentored hundreds of female leaders globally, I have witnessed how empowering women can help them grow into confident and capable future leaders. Like men, women want leadership and participation in decision-making, and they have the expertise to be effective and successful in doing so. Every day I work with highly skilled, innovative, and powerful women who are ready to step up in boardrooms, companies and governments across the world. Let’s make sure those women get the chance to lead all of us toward a sustainable future.
Want to find out more about how to advance more women into leadership roles? Contact me to find out.
Isabel is an experienced Peak Performance Strategist with over 20 years of international work experience holding senior positions within the hospitality industry in countries around the world, as well as Executive and Leadership coaching, mentoring and training.
She specializes in high performance strategy, leadership development and building organizational culture to help leaders and their teams learn, grow and succeed.
Isabel is passionate about closing the gender gap and helping women reach more leadership roles by empowering them in business with the mindset, performance, skills and strategies that they need to get ahead.
More available on www.isabelvalle.com