More women in charge means bigger profits

Hiring, training and promoting talented women remains a challenge for employers

When Rohini Anand took over diversity programmes at the multinational catering company Sodexo in 2002, she had one goal: to prove that it pays for a company to have equal numbers of male and female managers.

Sodexo, which has 419,000 employees in 80 countries, says she has done just that. A companywide study last year found that units with equal numbers of men and women in management roles delivered more profits more consistently than those dominated by men.

“It has become embedded now. It’s not just me talking about it any more,” Ms Anand says with an “I told you so” satisfaction.

Evidence is growing that gender equity is not just politically correct window dressing, but good business.

Yet while companies are trying to increase the number of women in executive positions, many are struggling because of a failure to adapt workplace conditions in a way that ensures qualified women do not drop off the corporate ladder.

In a survey last year of 366 companies, the consultancy McKinsey found that those whose leadership roles were most balanced between men and women were more likely to report financial returns above their national industry median.

Companies with more balanced leadership do a better job recruiting and retaining talented workers, reducing the costs associated with replacing top executives, McKinsey found. They also have stronger customer relations because management better reflects the diversity of society, and they tend to make better business decisions because a wider array of viewpoints is considered.

Sandrine Devillard, who has been studying the issue for the consultancy for about 16 years, said companies were nonchalant about retaining top female talent when she started. Now they want to know what programmes work. Fast.

That’s because a woman’s prospects for promotion fall off at every step of the career ladder, according to a separate survey of 130 large companies conducted by McKinsey in 2012. While women made up 37 per cent of the total workforce, they comprised 22 per cent of middle managers, 14 per cent of senior managers and vice presidents, 9 per cent of executive committee members and 2 per cent of chief executives.

In France, Norway, Spain and most recently Germany, governments have sought to mandate progress by imposing quotas for women on boards.

Norway had the highest percentage of women on boards – 35 per cent – in western Europe and North America last year, according to data compiled by Catalyst, which researches gender equity. The US ranked ninth among the 16 countries listed at 19 per cent.

Board quotas alone won’t close the gender gap because they only address the final step in the career ladder, researchers say. The real challenge for employers is to hire, train and promote talented women so they have a pipeline of qualified female candidates when they need to fill senior roles.

“We’re on the cusp of a revolution,” says Cary Cooper, a professor at Lancaster University Management School in the UK. “If organisations don’t allow more flexibility, more autonomy, they’re just going to keep losing [women].”

The average workplace remains locked in a factory mentality with structured hours and a requirement to be at the office. The use of the internet has helped working remotely, but for top managerial jobs that might lead to the boardroom, physical presence in the office and attending work-related social events remain crucial. Add in broader social factors, such as expectations that mothers carry out domestic duty, and the pressures can become too much.

Take Emma Arkell. As a top divorce attorney at a large London law firm, her career seemed certain to soar – until the kids came along.

After watching female colleagues struggle to balance family responsibilities with work demands, Ms Arkell realised she couldn’t do both. Instead, she started her own company making a line of natural skincare products.

“I could do it from home,” she says of the business. “I had complete control of it.”

A recent study at Harvard Business School urged a rethink on why more women are not getting and keeping top jobs.

The study, released in December, found while men and women start out with similar career goals, women progress more slowly because of institutional hurdles and the demands of spouses.

* Associated Press

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