With growing emphasis on gender equity in the workplace, research has shown that diverse workplaces are more profitable. As we celebrated International Women’s Day earlier last week, Rozl Bautista, People Relations Leader, Asia for the global science company, 3M, shares her thoughts in this timely piece on how gender equity impacts the bottom line in business.
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The business case for gender equity
The case for gender equity in the workplace goes beyond ethics and vanity metrics. It is a business one, and the numbers say it all.
A 2019 McKinsey study found that females in top leadership can increase company profits and share performance by as much as 50%.[1] Development Dimensions International also reported that organizations with above-average diversity were eight times more likely to be in the top 10% of financial performers.[2]
In Southeast Asia, 75% of employees who rated their organizations the most diverse felt their organizations were outperforming competitors, nearly twice that of employees who rated their organizations the least diverse.[3]
Fellow Malaysians also agreed that a 10% increase in women at both board and senior management level would bring a 1.6% increase in Return on Equity.[4]
What’s the link?
To get leadership on board, it’s important to understand how diversity directly benefits corporations.
Here’s how.
Diversity benefits customers
Companies thrive on creating diverse solutions for customers. Different perspectives help better meet the needs of diverse customers, therefore, driving growth. In Southeast Asia, diversity is strongly linked to innovation. Companies with five or more dimensions of diversity attributed 46% of revenue from new products, 10% more than those with only one dimension. [5]
Diversity benefits employees
Diversity driven by formal workplace policies and informal company culture helps employees feel welcomed and engaged. This impacts all employees across the board – current, new, and potential.
New employees feel supported and included, helping them adapt much quicker. It also reduces employee absenteeism and increases employee loyalty. As much as 53% of employees in Asia believe that greater diversity and inclusion would help employers better retain talent.[6]
In a region where more than 70% of senior executives report securing top talent a challenge[7], ensuring workplace diversity is no longer an option but a necessity.
Diversity also matters to the new generation of workers. According to Deloitte, 58% of millennials from diverse organizations agreed that their companies were good at attracting and retaining talent, compared to 41% who said the same from non-diverse organizations.[8] Additionally, 69% of employees from diverse organizations said they would stay beyond five years, more than double those from non-diverse ones. [9]
Driving gender equity amidst COVID-19
The pandemic has undone much progress in gender equity as women across the globe are disproportionately impacted. The International Labour Organization reported that employment for women in Asia Pacific dropped by 4.6%, more than the 4% drop for men.[10] In Malaysia, the number of employed females fell by 2.5% in Q2 2020, five times compared to male employees.[11]
It’s time for corporations to step up – from changing practices to promoting more female workforce participation. True gender equality goes beyond flexible working hours. Here are some ways corporations can continue to advance the issue in the new normal.
First, kickstart initiatives that directly champion female leadership. By providing platforms for guidance and mentorship, they help develop leaders at all levels to accelerate the inclusion and advancement of women. 3M’s Women’s Leadership Forum (WLF) is one such example. It now has over 5,000 employees in its 65 chapters worldwide, including Malaysia.
Second, redesign the recruitment and interview processes to ensure a fair playing field for all. According to global recruitment consultant Hays, the top three ways organizations in Asia proactively seek diverse candidates include employee referrals; utilizing data to choose channels that produce most diversity; and working with specialist recruitment agencies to engage applicants from underrepresented groups.[12] With a cumulative goal across all diversity categories to double the pipeline of diverse talent in management globally from 32.6% to 65.2%, 3M is working on removing all individual discretion and bias from interview processes, and investing in a new interview management system focused on skills-based hiring.
Third, introduce employee training to address unconscious biases. This can help employees identify and understand potential biases and the tools to change them. There are still some ways to go in Asia. While 72% of employees here agree that unconscious bias training is beneficial, only 49% of employers are providing it.[13] To strengthen our inclusive culture, we are incorporating unconscious bias training at all levels of our organization, starting in the United States.
Lastly, corporations can support gender equity-focused non-profits and empower employees to donate their time and skillsets to such causes. For example, 3M partnered with ASEAN Foundation, United Way Worldwide, and Community Chest of Korea for the ASEAN CARES program to help support COVID-19 relief programs in Malaysia and Thailand, by providing access to food and basic hygiene. Many of the beneficiaries included women-headed households, pregnant and lactating women, and other vulnerable individuals and communities.
Diversity brings undeniable benefits and in these challenging times, the need for corporations to strengthen diversity initiatives and policies is more urgent than ever.
Let’s work together to heed this call.
References:
[1] Diversity wins: How inclusion matters (McKinsey.com)
[2] DDI Global Leadership Forecast 2020
[3] The Diversity Dividend in Southeast Asia (BCG.com)
[4] Board Gender Diversity in ASEAN (IFC & EIU)
[5] The Diversity Dividend in Southeast Asia (BCG.com)
[6] The 2019/2020 Hays Asia Diversity & Inclusion Report
[7] Board Gender Diversity in ASEAN (IFC & EIU)
[8] 2018 Deloitte Millennial Survey
[9] 2018 Deloitte Millennial Survey
[10] https://www.bloomberg.com/news/articles/2020-12-16/pandemic-saps-81-million-jobs-in-asia-pacific-in-2020-ilo-says
[11] Labour Market Review, Malaysia, Q2 2020 (DOSM)
[12] The 2019/2020 Hays Asia Diversity & Inclusion Report
[13] The 2019/2020 Hays Asia Diversity & Inclusion Report
*This article was written by Rozl Bautista, an experienced Human Resources leader who has worked in country, regional, area and global roles in the US, China, Singapore and the Philippines. She is currently the Asia People Relations Leader for 3M based in Singapore.
***Disclaimer: The views expressed are those of the writer and do not necessarily reflect those of NHA – News Hub Asia.