Gender diversity in the workspace: why it matters and how to get there?
The underrepresentation of women in leadership positions has surfaced in recent years as “top of mind” across all industries, so what are some of the things to consider when it comes to attracting, retaining and developing female talent within the upper echelons of a company? Heidrick & Struggles explains.
Gender diversity today
Female participation in the workforce, particularly in upper echelons, has improved significantly in the last decade within the GCC region as well as the wider Middle East and globally. According to Harvard International Review, 32% of family-owned companies in the Gulf region, a key sector of the Gulf’s economy, have women on their boards. Despite such strides, gender diversity in the workplace, particularly within the higher ranks of an organization, still remains very much ‘work in progress’.
According to data from the GCC Board Directors Institute (BDI), less than 1% of executive-committee and board positions in the GCC are held by women. Nonetheless, there is a clear wave of change and, increasingly, an awareness that gender diversity is “the right thing to do”. Despite the understanding of the moral imperative for gender diversity, the business relevance that gender diversity can bring to an organization, however, does not yet enjoy the same widespread recognition.
The underrepresentation of women in leadership positions has surfaced in recent years as something that is top of mind across all industries. This is particularly the case in industries, such as chemicals, that are traditionally considered “male” and, as a reflection of this, have historically seen men dominating the higher ranks. Not surprisingly, therefore, the below graph shows that as a field “Industrial” had the lowest proportion of new board seats, by industry, filled by women.
Figure 1: Proportion of new board seats, by industry, filled by women (2017)
Source: Heidrick & Struggles
“The underrepresentation of women in leadership positions has surfaced as something that is top of mind across all industries.”
In line with this, according to oilandgas.com here in the Middle East, the gender disparity is seen to be most severe in fields such as offshore and marine, refining, and petrochemicals. In these spaces, women hold only 15% of entry-level technical and field roles, a sluggish percentage when compared to the 50% of entry level business and support roles taken on by female graduates. Interestingly, however, research shows that within the GCC, there is a significantly higher percentage of female representation in the university graduate pool.
Furthermore, an increasingly large number of female students are taking on STEM subjects (Science, Technology, Engineering, and Mathematics) in further education. What is important, therefore, is that organizations are creating the environment and the opportunities for these women to pursue careers, specifically those within these male dominated spaces.
Times are changing, particularly here in the region, youth are progressively making up a larger percentage of the workforce. As millennials encroach, a new wave of professionals will slowly dominate, those who were raised with gender diversity as a norm, rather than an aspirational goal. With that in mind, research has shown that gender diversity within younger companies and newer fields has come more naturally: take “Technology” for example in the above graph.
But what about those traditional fields, and the “giant” organizations that built the foundations on which the GCC flourishes? They too, are making strides to work towards gender diversity, but in order for these strides to be sustainable and worthwhile, two things are necessary; firstly, a genuine understanding of the business value that gender diversity provides to an organisation and secondly, a firm commitment to making it happen.
The business case for gender diversity
Hedrick & Struggles’s widespread research supports that gender diversity propels organizations to better business results. Benefits of gender diversity include enhanced decision making, better governance, and of course, improved financial performance. As the world continues to change dramatically and markets, particularly here in the region, continue to shift drastically, organizations must be able to navigate environments where survival depends on the ability to properly anticipate disruption. With this in mind, gender diversity, which brings diversity of thought, a range of perspectives, experiences and skills is a strong differentiator for organizations in today’s business climate.
In line with this, much research has strongly supported the existence of a positive correlation between gender diversity on boards and the ability to produce great financial results and overall, increase shareholder value. Increasingly, the business community is becoming more and more aware of this trend and, as such, the rate at which women are being included within these upper echelons has increased from 18% in 2009 to almost 30% in 2017.
According to the World Bank Group, several studies have held that gender diversity in the boardroom leads to more efficiently and effectively run organizations, a reduced exposure to risks of corruption and fraud and, importantly, improved profit margins and return on equity. In fact, Deloitte Middle East also found that companies with female representation on their boards outperformed those lacking board gender diversity by 36%.
“Benefits of gender diversity include enhanced decision making, better governance, and improved financial performance.
Companies with female representation on their boards outperformed those lacking board gender diversity by 36%.”
In addition to enriching a company’s perspective, having women in high ranking roles also simply serves as a representation for half of the population of the world we live in and, importantly, therefore, half of the population of consumers that companies serve. With that in mind, it is also important to acknowledge that the impact of having high ranking female executives and gender diversity within the boardroom extends far beyond the financial performance of an organization. This positively impacts an organization’s culture, sending a message of equality, accessibility and a commitment to development throughout the organization and beyond that, to the community at large.
Committing to gender diversity
With the business imperative for gender diversity more clear, what remains of the upmost importance is the commitment of the organization and the wider business sphere within the region to creating an environment that facilitates the attraction, retention and development of females within the upper echelons. Such an environment comes only from the full commitment of multiple key stakeholders and, on a wider scale, a balance of commitment from both the private sector as well as national governments to promoting gender diversity at the top.
For example, and particularly within the region, in order to ensure that women enter the workplace and, importantly, stay until they reach high ranking positions, it is imperative that the cultural changes required to encourage this are considered. Globally applicable issues around female attrition such as women dropping out of the workforce during their child-bearing years is another reason behind why female numbers in the region dwindle from entry level as they move upwards in the organization. As the pool of qualified women becomes increasingly scarce as we move up the ranks, more of the senior management positions go to men. In spaces which are traditionally male dominated, this phenomenon is even more acute.
To avoid such a circumstance and work towards eliminating this disparity, proactive measurements, initiatives and governmental programs that encourage female participation through quotas, incentives, penalties and other legislative action is necessary. Such approaches have been imposed in several Western nations and have had a positive impact not only on the females in question, but the organizations as well as the national economy at large.
Beyond governments, the organization itself can also play a large role in the attraction, retention and development of senior female workforce participation. Having the courage and the patience to examine their talent management and attraction strategies, forcing search firms to rise to the challenge of diversity, and making a more conscious effort to engage with the education sector to ensure females are properly represented in the necessary fields are examples of approaches. Given their relevance and dominance in the GCC, companies within the energy sector are particularly well positioned to act as pioneers in this space.
By continuing to springboard off the strides made within gender diversity to date, by holding all key stakeholders in the process accountable and responsible for improving diversity in the talent pipeline for upper echelons, a sustainable approach to building and maintaining a diverse, effective and productive talent pool can be achieved. Given the irrefutable evidence of the value of diversity to a business, the reward is well worth the investment.
“Particularly within the region, to ensure that women enter the workplace and stay until they reach high ranking positions, it is imperative that the cultural changes required to encourage this are considered.”