We are still a long way from achieving equality in the workforce. Census Bureau data from 2018 found that women make, on average, 82 cents on the dollar compared to men. This impact is even more pronounced for women of color, with Hispanic and Latino women making 54 cents on the dollar, on average. Gender bias, both conscious and unconscious, continues to exist in hiring, and 42 percent of women report they have faced gender discrimination in the workplace. Clearly, the message that a diverse workforce and gender diversity pay for themselves (manifold) has not sunk in.
None of this is news. Roughly 40 percent of candidates recognize women are at a disadvantage when it comes to hiring compared to men. It plays out—men are twice as likely to be hired than women in certain industries, and women are 25 to 46 percent more likely to get a job through blind hiring processes.
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All of this has become even more pronounced in the last year, with the impacts of COVID-19 and ensuing life changes disproportionately impacting women and making them more vulnerable to the economic effects.
Conscientious companies should look at this data and immediately recognize the need to do their part in righting these wrongs by focusing on gender diversity in hiring. Those who do may find they benefit not only ethically, but financially as a result.
Gender Diversity Increases the Bottom Line
We already know that roughly three-quarters of job seekers care about a potential employer’s commitment to diversity. Workplace diversity improves company morale and increases employee loyalty. Best of all, numerous studies have found that diverse work teams produce better financial results.
This data extends to gender diversity. A 2004 catalyst study found that companies with the highest representation of women in their leadership teams experienced greater financial success and higher returns for shareholders. This was true across multiple industries.
A 2015 McKinsey & Company report found that the top quarter of companies for gender diversity were 15 percent more likely to earn above their industry standard compared to similar companies with less diversity. Conversely, those companies in the bottom quarter for gender diversity were statistically less likely to achieve financial success.
Companies that prioritize gender equality in their hiring practices and workforce also earn 41 percent higher revenue than those that don’t.
More recently, McKinsey & Company found that companies with diverse leadership teams were 21 percent more likely than their counterparts to outperform profitability. They were also 27 percent more likely to create and deliver value.
All of this extends beyond individual companies, as well. It’s reported that an increase in gender diversity globally could increase gross domestic product (GDP) by $28 trillion.
Prioritizing Gender Diversity For the Good of Your Company
Given all this, it makes no sense at all that just 5.8 percent of Fortune 500 CEOs were women in 2019. Or that men are 30 percent more likely to be promoted to managerial roles than women. Why aren’t more companies recognizing the ROI of gender diversity and prioritizing it for the financial and ethical good of their workforce?
It all comes down to unconscious (and sometimes conscious) biases getting in the way of creating diverse work teams.
We tend not to notice these injustices until they are pointed out to us. This may be especially true of men in hiring positions. Research has found that about half of all men believe women are equally represented in the workforce, even when only 10 percent of senior leaders in a company are women.
Most people don’t mean to be this obtuse. It just happens based on how we are conditioned and what we grow used to.
That’s where intentionally diverse hiring practices come into play. Practices like employing software that preempts unconscious biases and produces unbiased ranked lists of top candidates for every opening. Lists that look at your current employment pool, your active candidates, and passive candidates in your area.
Management teams also have to make their own commitments, though. The commitment to interview as many women as men. To be on the lookout for women in the current workforce who may be good candidates for promoting up. And most of all, to fill leadership teams with just as many women as men.
Equality isn’t going to happen overnight, but recognizing the need to strive toward that goal is the first step to reaching it. Companies that make that commitment are going a long way toward creating more cohesive work groups, and toward improving their overall ROI on each and every hire.