The business case for change


Why forward-looking businesses are prioritising gender diversity

If ever there was a compelling business case, gender diversity has it all. There is little wonder why forward-looking businesses are taking a bold stance, and gaining valuable advantage. The benefits of gender diversity have been well researched and documented. Here is a snapshot of why your business should be taking it seriously.

Talent acquisition and retention

Talent shortage is costly and impacts the majority of businesses. Research by Deloitte found that 83 percent of New Zealand organisations were experiencing talent shortages that were impacting business results. The skills in shortest supply were deemed to be critical thinking and problem solving, general management, and initiative and drive.[1]

Yet despite this shortage, we are both under-utilising and losing female talent. Women have outnumbered male graduates for over a decade, and make up around 60 percent of New Zealanders who hold a post-graduate or honours degree – yet only hold around 20 percent of senior roles.[2]

With talent shortages projected to become more severe in much of the developed and developing world, maximising access to female talent is a strategic imperative for business.

– World Economic Forum

Employment statistics also show that over a quarter of mothers (around 132,000) are not in the workforce. That is, they are neither employed – which would include those on parental leave – nor unemployed. Of those in the workforce, nearly half of mothers with children under 14, and close to a third of mothers with children aged 14 or over, work part-time (under 30 hours per week).[3]

There is much opportunity, therefore, to improve how we attract, utilise and retain talent in order to optimise performance. This goes right to the heart of gender diversity.

Prospective employees, male and female, are increasingly taking note of the gender diversity policies of prospective employers – and paying particular attention to the diversity of the leadership team, the prominence of positive role models, the transparency of the company’s diversity policy, and its diversity demographics and targets. Businesses that get this right are more likely to become a magnet for talent, and they are also more likely to enhance employee engagement, and reduce their employee turnover. [4][5]

Strength lies in differences, not in similarities

– Stephen R. Covey

Better Business Performance

Unsurprisingly, therefore, alongside enhanced talent acquisition and retention, gender diversity is also widely linked with broader business benefits.

A report published by the Ministry for Women highlighted the breadth of these benefits, stating there is evidence of:

  • improved organisational performance
  • improved financial performance
  • better insights into customer needs and critical markets
  • improved customer satisfaction
  • greater innovation, creativity, and productivity
  • improved oversight of audit and risk
  • better decision-making, and
  • increased competitive advantage.[6]

Research also shows that whilst there can be variation from study to study, the scale of the benefits can be significant.

Credit Suisse, for example, showed that businesses where women made up at least 15 percent of senior managers had more than 50 percent higher profitability than those where female representation was less than 10 percent.[7]

Economic Contribution

Gender diverse companies contribute significant gains to the local and global economy. According to McKinsey, “If women were to participate in the economy identically to men, they could add as much as $28 trillion or 26 percent to annual global GDP in 2025.” This estimate, published in 2016, “…is roughly the combined size of the economies of the US and China.”[8]

In 2011, Goldman Sachs estimated a boost of 10 percent to New Zealand’s GDP of closing the male and female employment rates. [9]

It is imperative, therefore, not only for business success, but also for economic prosperity, that gender equality becomes a priority – regardless of industry and business size.

The bar will continue to be raised

The social and ethical expectations on organisations will continue to grow. We are seeing greater coverage of the thought-leading actions of trail-blazers globally, as they take increasingly bolder steps towards equality. Similarly, we are also seeing a growing trend of organisations being singled out for their lack of action, or for their oversight of diversity and inclusion matters. It is likely these trends will continue to emerge as emotional tensions grow, and as society continues to expect an increasing level of commitment towards equality. If the business case for change has not convinced you, the ethical need to embrace diversity should. One thing is certain – the talent will not stand still.

It is beyond doubt that businesses must embrace diversity. And those who boldly strive for step-change will be rewarded.

Get in touch to share what your organisation is doing, or looking to do, to support diversity and inclusion. 

[1] Talent Edge New Zealand – 2013: Addressing Worrisome Gaps. Deloitte, March 2013

[2] Source: Statistics New Zealand

[3] Using latest available figures from Statistics New Zealand – as at the end of June 2014 (27.7 percent). Mother is defined as “having a dependent child living at home, who is under 17 years of age and who is not in full time employment (if aged 15 or over).”

[4] Winning the fight for female talent: how to gain the diversity edge through inclusive recruitment., March 2017. Retrieved 12 May 2017.

[5] Biro, M. 5 reasons why workplace flexibility is smart talent strategy., 18 August 2013.

[6] Realising the Opportunity: Addressing New Zealand’s leadership pipeline by attracting and retaining talented women. Ministry for Women, September 2013.

[7] CS Gender 3000: Women in Senior Management. Credit Suisse, September 2014.

[8] Madgavkar, A., Elingrud, K. & Krishnan, M. The economic benefits of gender parity. McKinsey & Company, 8 March 2016. Retrieved 8 May 2017.

[9] Closing the Gender Gap – Plenty of Potential Economic Upside. Goldman Sachs Research Report, 9 August 2011.

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