Despite efforts to ensure gender equality in the workplace, women continue to earn less than men and have fewer opportunities to advance their careers as compared to their male counterparts.
According to CNN Money, only 14.2 percent of the top five leadership positions in companies in the S&P 500 are held by women. Out of these 500 companies, there are only 24 female CEOs. In addition, women lag behind their male counterparts for landing critical positions that could make them potential leaders. While women are found in human resources and investor relations, they have yet to completely break the glass ceiling in the profit & loss jobs which could groom them for C-level positions. This is not just the case in the US, but other countries as well. Only 3.1 percent of women hold board seats at major companies in Japan. US stands at 19.2 percent, UK at 22.8 percent and Australia at 13percent.
It is important to promote diversity and gender equality in business. Despite the perception that women are the weaker sex, studies have shown women have proven time and time again that they can successfully handle corporate pressure. Businesses should not think of gender equality as something that is only beneficial for women. The company as a whole reaps the rewards. When the playing field is leveled, all candidates must perform at their best to stay competitive in the workplace. By promoting fair and equal employment to all, businesses can enjoy improved productivity and growth, better performance, a better mix of talent and expertise and a good reputation within the industry.
When businesses think about diversity and equality, they should think in terms of performance. Research shows that companies that lead in gender, racial and ethnic diversity have better financial returns as compared to those who don’t. In fact, diversity can pretty much prove to be a competitive advantage for companies and can enable them to tap greater market share over time. This does not mean that by becoming diverse, business will automatically generate more profits but what it does show is that diverse leadership and diverse teams provide better results. This is mainly due to greater employee satisfaction, lower turnover, improved customer orientation and improved decision making.
Findings show that companies that are in the top quartile for racial and financial diversity are 35 percent more likely to have financial returns above the industry medians. Similarly, companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above the industry medians. In comparison, companies in the bottom quartile for gender, racial and ethnic diversity are less likely to achieve above average financial returns. Findings of the report suggest a linear relationship between diversity and better financial performance. It is important to note that the findings clearly show improvement in performance due to gender and ethnic diversity and yet, there are no companies in the top quartile on both these dimensions.
A diversified workforce should be viewed as an asset by corporate leaders. Diversity between employees can be leveraged for improved performance leading to better returns. According to the 2015 Global Gender Gap report, more women now enroll in higher education in 97 countries of the world as compared to men. Women make up the majority of the skilled workforce in nearly 68 countries but unfortunately, enjoy leadership positions in only four countries. These figures clearly show that businesses are not capitalizing on the skills and abilities of these women. Despite the fact that there is a higher population of educated women in the developed nations than men, companies are not offering these women the right opportunities to prosper and grow.
Rapid globalization has turned the business world into one big marketplace. That means dealing and working with people from all kinds of backgrounds. Advancements in technology have made communication between different countries extremely easy. All this translates into one thing: we live in a diverse world and we operate in a diverse market. Diversity is thus, a driving force for business growth.
The Center for Talent Innovation has developed a diversity dividend which basically quantifies the benefits that can be derived from diversity. This includes a diverse workforce and an inclusive leadership. The CTI report suggests that diversity has the potential to unlock innovation and to drive growth. Businesses that are able to embrace diversity generate greater dividends – in terms of performance, growth, employee satisfaction and company reputation.
Overall, businesses today operate in an environment where barriers of race, gender and ethnicity are slowly vanishing. Employers who still refuse to welcome diversity are losing out on a workforce which could be more talented, more experienced and more skillful. Women are the leading example of a big segment that is not being effectively utilized by most corporations. Similarly, discriminating on the basis of skin color or their religion is not only unethical but also an ineffective business strategy.