March 7, 2023
DHAKA – Of late gender equity is no more just a populist idea. Rather, it is being considered as one of the critical strategic priorities for businesses.
A number of studies confirm a strong correlation between gender equity and organisational success. One such study conducted by McKinsey & Company, a global management consulting firm, and Lean In, a global community dedicated to helping foster leadership, advancement and inclusion for women in the workplace, shows that companies having more women in management earn 47 per cent higher rate of return on equity.
The same study also reveals that organisations having better gender diversity are likely to outperform their national industry average in terms of profitability. Diverse teams are more likely to make better decisions that yield better results.
One might argue that correlation isn’t necessarily the same as causation. However, there are enough evidence in those studies that indicate the strong link between gender diversity and financial performances.
Let’s try to elucidate how gender equity contributes to organisation’s success.
Globally, it is being noticed that there are more female graduates than the male. In Bangladesh, women are catching up fast and will soon outnumber the male in higher education. In the case of professional courses like laws and medicines, there are more female students.
To attract talents, companies must keep eyes on women. There is no better asset than the talented workforce for an organisation.
Gender diversity fosters innovation as by adding more women in the team, companies bring different perspectives and ideas on the table which lead to build a culture of creativity.
Diversity also enhances productivity. According to the World Bank, productivity per worker can increase by as much as 40 per cent when a company eliminates discrimination against female employees.
Corporate image plays an important role in the decision-making of the key stakeholders, like consumers and investors. Firms that are known for gender diversity enjoy better image.
A survey by Morgan Stanley found that 66 per cent of high-net-worth investors say they are more likely to invest in companies that promote gender diversity.
To incorporate gender diversity, companies have to focus on certain key things. First and foremost is the commitment from the senior management. They must set a target that must be one of the key performance indicators (KPI) for the entire organisation.
All relevant human resources policies have to be nondiscriminatory to ensure equal treatment and opportunities for female employees. Certain facilities like flexible working hours, work from home, enhanced maternity leave, and day care facilities for the kids have been proven very effective to retain and attract female talents.
Policy-makers and regulators also play a pivotal role in fostering gender diversity by enforcing appropriate policies and regulations. In many a case, there are more female employees in the informal sectors that are not truly governed by any regulation. As a result, women are deprived or not properly treated. Here comes the role of the regulators.
Adding more females in the workforce has far reaching impact. According to McKinsey, closing the gender gap in the workforce could add a staggering $28 trillion to the global GDP.
If women’s participation is fully equal to men’s, Bangladesh’s GDP gain by 2025 would be 28 per cent more, adding $94 billion to the economy, or $580 to our per capita GDP.
The author is chairman and managing director of BASF Bangladesh Limited. Views are personal.