The Importance of Gender Diversity in Business

The business case for gender equality is stronger than ever, but many companies are struggling to ensure women are fairly represented in top management. The data from 50 of the world’s biggest banks, insurers, asset managers and professional services firms showed that despite being the majority of junior staff, only a quarter (26%) of senior roles were occupied by women. In the S&P 500 Finance and Insurance, women occupy just 29% of executive and senior level positions despite making up 57% of the total industry workforce, and just 7% of CEOs. These alarming statistics further underscore the commercial imperative for gender diversity and equality within the workforce. 

Globally, the evidence mounts that gender diversity in critical decision-making positions has a positive impact on a company’s financial performance - yet women continue to be underrepresented in senior roles, and they are more likely to be passed over for promotion. 

One key finding in McKinsey & Company’s annual ‘Women in the Workplace’ report revealed that while 90% of CEOs reported they prioritized gender diversity because it “leads to better business results”, less than half (42%) of their employees agreed. To better understand how this difference emerged, we surveyed our audience on why employees are less aware of the business case for gender diversity and how it can, in fact, improve financial performance and overall commercial success.  

Key survey findings 

The most important takeaway from our survey is that few organizations present a business case for gender diversity to their employees and, when they do, they do not support it with evidence, thus reducing their potential buy-in. Our survey revealed several important other insights, too: 

• 75.9% of respondents believe that gender diversity improves financial performance. Women were more likely to agree (83%) compared to men (71%). 
• Only a quarter of respondents had received gender diversity training from their organization. Of those, 79% said the training did not include the business case for gender diversity. 
• A significant portion of respondents felt that leadership does not promote or provide evidence for the business case for gender diversity. Additionally, gender diversity is often championed by HR as a 'people-related' issue rather than a 'business-related' one. 

Why are employees less aware of the business imperative for gender diversity in the workplace? 

We asked our respondents why employees might disagree or be unaware of the business case for gender diversity. The majority of those we surveyed agreed that employees may disagree or be unaware of the business case because leadership does not promote or overtly highlight it (63.5%), with almost half agreeing (46.6%) and a fifth strongly agreeing (19%). Furthermore, the majority of those we surveyed agreed that employees may disagree or be unaware of the business case because leadership does not provide evidence to support the argument (69%); with two fifths (43.1%) agreeing and a quarter (25.9%) strongly agreeing.  

As one respondent commented, “People would like to see evidence and details on the studies done. You cannot turn your head away once something is presented factually and methods of fact collection are made transparent”. Finally, the majority of those surveyed (70.7%) thought that employees may disagree or be unaware of the business case because gender diversity is championed by Human Resources primarily as a ‘people-related’ issue, rather than a ‘business-related’ issue; with two fifths (44.9%) agreeing and a quarter (25.9%) strongly agreeing. 

Does gender diversity improve commercial success? 

Most of our respondents believe that gender diversity improves the financial bottom line (75.9%). Women are more enthusiastic, with 83% agreeing compared to 71% of men. When we asked if they had received formal training, communication, or attended seminars highlighting their organization’s approach to gender diversity, only a quarter said that they had (25.7%). Of those who felt their organization did communicate their approach to gender diversity, the majority said that they had not been presented a business case (78.6%). 

Recommendations for improving gender diversity and equality at work 

Based on our findings, we recommend the following steps to improve gender diversity in the workplace: 

• Formal training: Incorporate gender diversity training into your onboarding and induction processes. Regularly communicate the importance of gender diversity, and ensure it is championed by the executive board. 
• Present the business case: Include the business case for gender diversity in formal training sessions. Providing evidence and clear benefits can help secure employee buy-in. 
• Expand the talent pool: Sponsor and mentor women during their secondary education and encourage the study of STEM subjects. Advertise career opportunities with your firm prior to graduate recruitment, too. 
• Create a leadership pipeline: Actively identify and nurture talent from diverse backgrounds. Highlight success stories and role models to inspire the next generation. 
• Measure impact regularly: Track the impact of improved gender diversity on key metrics such as employee engagement, retention, and financial performance.