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Logical Phallusies

It’s Not a Joke!

Did you hear the one about patriarchy and the oppression of women and minorities?

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Ooops … sorry, it’s not a joke …

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It’s reality!

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Amazing Stats

Benefits of Diversity: Business Case for Toppling the Patriarchy

One of the biggest misconceptions about gender equality in the economy is that it benefits only women.

The economic truth is: Everyone benefits from gender equality.

These stats on the economic benefits of diversity and inclusion tell us that equality in the workforce isn’t just the right thing to do, it’s the profitable thing to do.

How does gender equality impact GDP (the economy)?

If women played an identical role in labor markets to men, the annual global GDP would be increased by 2025 by 26% or $28 trillion.  (McKinsey Global Institute)

This impact is roughly equivalent to the size of the combined Chinese and US economies today.

An alternative “best in region” scenario, in which all countries match the progress toward gender parity of the fastest-improving country in their region, would by 2025 add as much as $12 trillion in annual GDP, equivalent in size to the current GDP of Germany, Japan, and the United Kingdom combined.

The economic benefits of gender equality are particularly high in rapidly aging societies, where boosting women’s labor force participation offsets the impact of a shrinking workforce. (McKinsey Global Institute)

Educated women raise educated children. Thus, current investment in them also produces an automatic investment in the future economy and workforce. For every 1% increase in girls educated, a country’s GDP increases by 0.3%. (The World Bank)

How diversity impacts company performance

Diverse leadership teams outperform non-diverse leadership teams because they widen the perspective of the organization. This leads to better decision making.

Diversity of opinion leads to better insights, fewer blind-spots, more experimentation, greater knowledge sharing, higher levels of innovation, and a more holistic approach, generating higher corporate achievement. (Multiple research studies)

This one change alone has the potential by 2028 to add $8 trillion or 38% of the $21 trillion US economy. (Accenture)

There is a strong link between a firm’s financial performance and how it handles diversity: 

Firms with 3 or more women in senior management score better on all dimensions of effectiveness and efficiency.  (McKinsey & Company)

Companies managed by women report more motivated workers and higher productivity than those managed by men. Individuals with female managers were 6% more engaged than those with male leaders. (Gallup)

Increased gender diversity improves profitability by 21%. It also provided a 27% likelihood of outperforming on longer-term value creation as measured by improved margins.  (McKinsey & Company)

Increasing ethnic and racial diversity improves that measure to 35% more likely to outperform financially.

Companies exhibiting above-average financial performance have a greater proportion of women in senior operating roles than do their fourth-quartile peers: 10% versus 1% of total executives.  (McKinsey & Company)

For firms ranking in the top quartile of executive-board diversity, ROEs were 53% higher, on average, than they were for those in the bottom quartile.

EBIT margins at the most diverse companies were 14% higher, on average, than those of the least diverse companies.

For every 10% increase in gender diversity, EBIT rose by 3.5%.

Corporations with at least 10% women on their Boards have 2.5 % to 5% higher ROE; firms where women are at least 30% of C-suite have 15% higher profitability. (Nasscom)

Companies with the most women on their Boards outperformed those with the least on return on sales by 16% and return on invested capital by 26%. (Catalyst)

Data from more than 800 business units from the retail and hospitality industry showed that gender-diverse business units in retail had 14% higher average comparable revenue than less diverse business units, while those in hospitality showed 19% higher average quarterly net profit than less-diverse business units. (Gallup)

There are also many qualitative findings that support the benefits of a diversity-friendly workforce:

Productivity: Firms with improved gender equality, providing more child care, experience significant productivity increases. (University of Greenwich Study)

Talent pools: Greater gender equality allows a firm to attract and retain top talent. Hiring the best people lays the foundation for a stronger and more stable business. (Multiple research studies)

Employee churn and engagement: Leveling the playing field makes the whole workforce, not just the women, happier: it reduces stress, improves the quality of life, reduces turnover, and increases employee engagement. (Global Women)

Diversity and consumers

Women are powerful consumers for firms that effectively communicate with them. (ie. Not portraying ridiculous stereotypes).

Women are responsible for 70% to 80% of consumer purchases.  Involving them in product development and marketing results in better targeting of this critical demographic. (Multiple research studies)

Ethics also impacts purchasing decisions.

Ethics and social responsibility are fast becoming a key issue for consumers.  53% of consumers will react adversely when disappointed by a brand’s stance on a social issue, and 25% will refuse to go back to the brand. (Accenture)

Conclusion

Diversity isn’t just a buzzword for companies, and it’s not purely an altruistic endeavor.

Diversity has a tangible impact on the performance of companies and results in a stronger and more robust economy.