What Are The Benefits Of Gender Equality in the Workplace?
Despite the numerous problems that businesses face, one of the beauties of ESG is that addressing one issue can snowball into solving another. Even with the additional and sometimes overwhelming problems, addressing one issue can make it easier to resolve another. You start to see this in some of the most common problems businesses are faced with in regard to ESG.
While there is a looming threat of climate change, companies are also in positions where they need to address a gender-balanced workplace. This is openly enshrined as one of United Nation's Sustainable Development Goals (SDGs). As of 2020, despite women taking up 39% of the workforce, there is a 31.4% gender gap in various positions across the board globally. Combined with the pandemic causing many women to leave more female-oriented jobs, such as hospitality, companies find themselves in a position where they need to diversify throughout their businesses.
Both of these problems - climate change and the gender gap - are disconnected but also intertwined for a few reasons, and more companies can find that having a gender-balanced workplace could in fact be the key. The reason for that comes down to the various benefits that having a gender-balanced workplace and promoting diversity brings.
It Improves Economic Sustainability
Probably the most compelling reason is that gender balance improves the financial performance and long term viability of a company. Companies in the upper 25 percentile for gender diversity also enjoy a 21% higher likelihood of having higher profits than the rest. The higher profitability makes sense when you consider that adding women to typically male-oriented jobs and vice versa brings about several general benefits.
You also get new perspectives and a stronger sense of collaboration and innovation. With ESG being popular amongst investors as well, making an effort to be gender balanced is seen as a brand improvement, bolstering its reputation. With more diversity, you even get better customer connections and better decision-making. Many companies see a boost in productivity as a result.
With regards to productivity, you can also see hints of it in the fact that when companies have over 30% of their executives who are women, they tend to outperform companies that have 10-30% women executives.
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It Improves Company Innovation
These general benefits feed into many parts of a company, and there are several ways that they could be leveraged. Beyond the general working environment and the daily grind, these can also affect company culture and how companies face and deal with problems. One of the ways companies address various issues is through innovation. Whether it’s through the use of a tool that’s already been made or something newly created, innovation takes place on a regular basis in businesses.
And gender diversity has a tendency to make that innovative process much easier to do. Going back to an earlier study, there was a distinct connection between leadership roles with diverse backgrounds and greater innovation. This is something you wouldn’t find normally if the environment wasn’t as diverse.
In other words, when you have a more diverse group, you’re given way more options to work with when tackling issues. This is especially crucial for larger issues like how the company can be more sustainable.
It Improves Collaboration
One of the distinct differences between women and men is that women are more adept than men at emotional functions. Not only can they have deeper empathy than men, but women have stronger skills biologically in reading non-verbal cues. In business situations, this means women are better at taking turns in conversations, which helps particularly well in collaboration efforts.
Whether it’s dealing with a small issue or a larger one, the more women in the room contributing, starting conversations, and offering and collecting feedback, the better your collaboration efforts will be.
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This Also Includes Diversity In Ethnicity And Race
Even with the focus being on women in top positions in general, having diversity with regard to ethnicity and race can also make a big difference. Companies are likely to see similar benefits to those mentioned above as well. That much is clear from the fact that businesses with more racial and ethnic diversity have a 35% performance advantage over those that are homogenous.
Diversity, equity and inclusion (DEI) is a recognised priority, extremely important as a driving force of both basic social sustainability, as well as an indicator of baseline economic development potential both in emerging and developed markets.
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More Diversity Means A Better Business
Businesses, at their core, are a collaborative hub of ideas, and when you’re hiring like-minded individuals, it tends to make businesses narrow. For sure, it feels better to hire someone that is similar to you in your thoughts and ideas, but businesses miss out on some greater perspectives and ideas when bringing in people who think a little differently.
Whether that’s coming from a different country, culture, industry, or background, having different perspectives and diversity in everything obvious and not so obvious has its perks. Opportunities and ideas would never be present if you simply focused on the narrow and gender diversity is one way to expand from that narrow view.
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In addition, closing the gender pay gap and creating equal opportunities is a true indicator of a transition to economic sustainability. In recent years, and the pandemic began, women have been disproportionately affected throughout the world, as the United Nations points out, by the loss of income security and the closely related issue of gendered division of family responsibilities.
Equal and open gender representation is an obvious first step towards greater social equity, and the benefits compound. Companies looking to improve their ESG scores must understand that this is something to be worked on now, not in the distant future. Equal opportunities and a culture of inclusion are the fundamentals that drive the ultimate benefits of ESG initiatives, including improved corporate governance, board diversity, attracting responsible investment, and the positive effects of inclusive and open management styles that recognise where the potential for environmental sustainability lies.
Without gender equality, the ball doesn't start rolling. This is the start point where companies can build positive impact for the future.
How are companies faring in the promotion of gender equal social policy? Track and compare progress via our Company ESG Profiles, with regularly updated ESG Ratings and reports.