Why Promoting Women is a Smart Business Strategy

New data from the Australian Bureau of Statistics (ABS) highlights the gender wage gap in Australia remains stubbornly high at 13.3% - an unfortunate reflection of the challenges facing women today. As a female leader at TQSolutions I have been very lucky to be well supported through my career - so here's why others should promote women too.

Women are a goldmine of untapped resources.  Globally, women are responsible for only 37% of GDP despite the fact that they account for more than 50% of the population. Many countries are well below the average, for example in India women account for only 17% of GDP. Consider the war for talent over if we can achieve gender parity in the workplace!

There has never been a better time than now:  Millennials represent the most highly educated female cohort in history and most companies in the Western World will have some sort of diversity agenda, but how many companies are actually doing more than just talk about equality?

While we have seen some progress over the last 10 years, progress is slow.  Women are still grossly under-represented at all levels, and at this rate, according to the World Economic Forum, gender parity won’t be achieved until 2186.  Here in Australia, only 5% of ASX 200 companies have a female CEO, senior female managers earn on average $93,000 less than men doing the same job and 95% of CEOs, 91% of CFO’s and 87% of Group Executive teams are men.  So, we are far from on top of the diversity issue!

Smart CEOs get that women contribute to the bottom line

Short-term profit objectives can often mean the diversity strategy gets de-prioritised, but smart CEO’s know that the two work in unison. The best CEO’s are always talking about diversity because it is a key strategic imperative and they genuinely believe in it. They inspire their leadership team to engage in the transformation process.  They are constantly measuring success with quantifiable data, embed it into the culture and hold everyone accountable to it through the entire employee lifecycle. They seek out talented women and empower managers to support women to look for creative career paths to support their growth.

There is an immense amount of data proving that it is in everyone’s interest for women to succeed. Multiple independent studies have unequivocally shown that companies that have more women within their leadership ranks have higher financial returns than more homogeneous companies.  The McKinsey Global Institute has been leading the way on gender parity research over the last 10 years, and even back in 2017 they  found that $12 trillion (more than 25%) could be added to global GDP by 2025 by simply “narrowing” the gender gap.

A study out of Norway also found that: “if you invested consistently in only companies with a female CEO/Chair, then you would have done better than the market”.  Other independent studies by financial institutions like Morgan Stanley and Credit Suisse have found the same thing - gender diversity improves investment performance.

Additional employee benefits

Not only are more diverse companies more profitable, but employee turnover is lower, productivity is improved, productivity loss from poor hiring is improved, it improves team cohesiveness, it leads to higher quality work outputs, better decision-making abilities, innovation and problem solving, and is a good talent attraction strategy because most candidates look at diversity in the workplace as a key consideration in whether to join a company.

Helping women to overcome imposter syndrome

It is a fact that many women lack self-belief and suffer from “Imposter Syndrome” when it comes to their career.  Women statistically are just as ambitious as men, but they are less confident. This means women tend not to apply for a job unless they tick all of the requirements. Men will apply regardless. Women may not ask for a promotion, because they fear being told no or think they might fail.  But, when it comes to the corporate culture and the woman’s individual mind-set, it turns out that the corporate culture has the biggest impact on a woman’s confidence level, which highlights just how important an inclusive company culture is to the success of all women.

Recognising female potential

Managers need to make sure the right internal candidates are applying for jobs.  A number of companies have investigated their internal promotions process because disproportionately more men are being promoted at every level causing a gender gap that worsens the higher they go.  What has been found is that men will still apply for a new role internally even if they only have 80% of the skills, whereas women will not apply if they feel they are missing 20% of the skills. To mitigate this issue, managers now ask suitable women why they have not applied and actively encourage them to do so.

How to promote women

Managers need to make sure they are giving credit where credit is due even if a woman is humble. They need to recognise a woman’s performance, her ideas, and make her achievements visible.  We should all stop assuming we know what a woman wants from her career – for example, don’t assume because she is a mother she won’t want a promotion that requires regular travel.  Give her the option and ask. We all need to champion women to leadership, support them to find a mentor and advocate, and start getting creative in how to develop them further, because everyone will benefit.

My final and most important tip for how you as an individual can help to achieve gender parity are to talk to your children about equality and raise them to respect human rights, whilst challenging your own unconscious biases and committing to change.

Find out more from one of our TQ people today.