Four business reasons to promote gender equality and diversity
On International Women's Day, IOE highlights the business case for gender equality and diversity.
Christine Lagarde. Ana Patricia Botín. Mary Barra. Oprah Winfrey. Ho-Ching. These names are part of a growing circle of women reaching the highest echelons of business and economic power. They are proof that women’s role in society and their access to the same opportunities as men have evolved in the last decades.
But while important progress has been made, numerous studies confirm gender inequality remains a challenge at all levels of society from politics to the world of work. To change mindsets and combat structural or institutional bias, women and men across the globe are working together to advocate for gender equality and diversity. Social media has created greater awareness of the issue and given a voice to women who have too long suffered gender discrimination in silence.
As committed advocates of the United Nations Sustainable Development Goals, IOE is examining and promoting the business case for gender diversity in the workplace. We know that employing the full talent of the workforce is not only the right thing to do but also the smart thing to do. For this to happen, gender inequality must be tackled; systems, regulations, cultures and biases must be addressed. With this in mind, we are focused on supporting our members and their affiliated businesses to devise and implement targeted and effective policies that promote a diverse workforce.
So, when we are asked "what is the business case for gender equality?", here are our top four reasons for pursuing gender equality and diversity, backed up with data and evidence.
Economic case: Research shows that if women’s talents were harnessed fully in the workforce, there is potential to increase the GDP by USD 12 trillion (i.e. 11% of the Global GDP) – equivalent to China’s and the U.S.’ economies combined. A study by the International Monetary Fund highlights that increasing women’s labour force participation produces large gains in economic welfare that exceed 20% in South Asia, the Middle East and North Africa.
Increased productivity and competititiveness: Research from the International Labour Organization’s Bureau for Employer Activities shows that a diverse workforce can result in an increase in productivity and competitiveness. Gender diversity can increase profitability by 5-20%. It also enables enterprises to tap into a wider talent pool with different types of skills, which contributes to overall enterprise performance. Team composition has been identified as a key factor that influences team performance. In addition, according to the IMF study, women’s complementary skill sets to men raise productivity, boosting wages for everyone.
Innovation intensity: Gender equality can lead to ‘innovation intensity’ — companies which have women executives produce more patents, compared to companies which do not have any women executives at all. Furthermore, a diverse workforce enhances customers’ loyalty and brand strength. This is because individuals working in open, diverse and inclusive environments usually perform better as they can be their authentic self at the workplace, be creative and produce innovative ideas for the brand. The clients and shareholders themselves are also diverse. Diverse enterprises are also more representative of customers.
Ease of doing business: Enterprises with a diverse workforce attract like-minded companies to invest and do business together. This makes it easier to access new markets. According to Harvard Business Review, diverse management teams are 70% more likely to capture new markets.
IOE members and partner companies are committed to tackling gender discrimination as a priority in the workplace to affect long-term, sustainable change and to reap the benefits of gender diversity. Join IOE’s Gender Network and help us promote diversity and equality in the workplace.