According to the World Bank’s 2022 ‘Women, Business and Law’ report, just 12 countries in the world have the same legal rights for men and women. Just 12. As a country that’s boasted equal pay laws since 1970 and as a member of the OECD (Organisation for Economic Co-operation and Development), it’s surprising that the UK is not included in this list of 12 countries. Needless to say, it is not surprising in a positive way.
So why is gender equality in your workplace important? All of us would prefer to be judged on the basis of our talents over our appearance. But there is far more to the concept than this. Women account for over half the world’s working population; so choices made by business leaders on gender equality in their workplaces, however small, will undoubtedly contribute to parity consequences on a global scale.
We have taken a look at the economic, societal and legal reasons (as well as benefits!) that even the most traditional of business leaders can appreciate. Prioritising gender equality is so important, and we can all make changes in our workplace to improve. So, let’s take a closer look at the “why”…
Turns out, we have quite a lot to discuss! In this article – Part One – we’ll cover the following two topics:
- The Global Economic Impact
- For A Fairer Society
And in our next article – Part Two – we’ll follow on by covering these four topics:
- Better For Business
- Reputation & Innovation
- Tomorrow’s Top Talent
- A Human Right
The Global Economic Impact
As mentioned above, the UK is part of the OECD – a group that works with international governments, organisations and civilians, to increase prosperity, equality and opportunities on a global scale. The OECD has spent the last 60 years collecting and analysing data across multiple topics to help them on their quest. One such topic is workplace gender equality.
In a 2015 study, the OECD estimated that increasing workplace gender equality by 50% would result in a 6% rise in gross domestic product (GDP) by 2030, across OECD countries. That 6% rise could become a 12% rise in GDP, should efforts be made to increase gender equality by 100% in the workplace. To put this into perspective, our total national GDP in the UK rose by 7.4% in 2021. So an additional 12% GDP gained over 15 years, simply by providing better workplace gender equality, makes a huge amount of difference for very little effort. The study went on to report that, “there can be no robust growth economy without gender equality” and that “investment in women boosts economic development, competitiveness, job creation and GDP”. Quite a clear message for policy- and decision-makers, and yet, 7 years later how much have we genuinely prioritised this message?
Following these estimations of GDP growth, the McKinsey Global Institute created a methodology to calculate how individual countries could gain from prioritising workplace gender equality. On the basis of true gender equality – i.e. women making up the same percentage of the workforce as men, working equal hours and at an equal level – they found that a whopping $28 trillion USD could be added to the global GDP by 2025. Focusing more closely to home, that broke down to an additional $5.1 trillion USD increase for the UK & Western Europe alone.
Now it is worth considering that achieving 100% gender parity by 2025 is by no means a small feat; relying on multiple factors to fall into place globally, but also relying on individuals to make different lifestyle choices to allow for these factors to remain. This is something McKinsey also took into account, calculating a separate set of gains based on another scenario: if countries matched the gender equality standards of the fastest-improving country in their geographical region. This more realistic scenario found that a considerable $12 trillion USD could be added to the global GDP by 2025. Considering we are debating growth in the trillions of dollars, this is simply too great a benefit to the global economy, for you to ignore – or fail to prioritise equitably.
When considering your workplace, it’s important to be aware of the hurdles that are presently stopping these estimations from becoming a reality in the suggested time frames. Women are subject to unconscious bias from job advertisements, face barriers on re-entering the workforce after taking time to be primary carers, face harassment, discrimination and are often paid less than male colleagues for performing the same tasks. It is also worth being aware that more efforts will need to be made to reverse the adverse effects that our recent Covid-19 Pandemic had on the employment balance for women. You can find more information about how the gender pay gap and employment rates were affected in the UK from 2020-2021 in this analysis by the Office for National Statistics.
In doing your part, changes like offering flexible hours and benefits that are genuinely useful to those with secondary jobs – i.e. raising children and running households – are small but mighty steps towards providing gender equality in your workplace. And, as we’ve seen from all this data, it also directly benefits your local and global economies. Something of significance considering the recent news…
For A Fairer Society
An economy cannot perform to its potential unless it utilises the capabilities of all of its members. And as we all know, capabilities often aren’t exercised at their full potential without equal representation. By increasing the equitable opportunities afforded to women, we can increase the benefits felt by society as a whole. After all, when women are employed they invest up to 90% of their earnings back into their families – compared with up to 35% from male counterparts. Where women have greater control over money, due to being able to earn it themselves, more of it is being spent to benefit the next generation. Quite simply, providing the space for women to be employed and earn an equal wage, is creating a better and fairer society for all and generations to come.
In a study carried out by analysts from Harvard, MIT, Northwestern and the IMF, it was found that employing women into local councils in India directly resulted in a greater provision of water and sanitation for their communities. Further analysis showed that male counterparts, when given the same employment status and policy-making power, did not share the same levels of concern regarding community improvements as the women did.
Further international studies have found that, when given access to the same amounts of money, women are more likely to spend on food and education than their male counterparts. And studies by the Nobel Prize-winner Muhammad Yunus (pioneer of the concepts of Microcredt & Microfinance), found that women not only repay loans more often than men, but when women control household money, their families were more likely to benefit too.
Employing women, providing fair wages & equitable opportunities, has been shown to create fairer societies all over the world. We can also see undeniable trends in this research towards strengthening the next generation by benefitting children within a community; putting economies in the best possible position to continue growing.
Applying this to a workplace, if your female employees are not afforded the same representation, transparent equity and respect, your company cannot perform to its full potential. To quote the International Monetary Fund (IMF), “empowering women is smart economics” – and isn’t that what every business leader should be aiming to achieve?
Afterall, gender inequality, like any inequality, makes for a poorly functioning workplace. Those on the receiving end of prejudice, whether consciously given or not, are likely to have lower levels of well-being and a decline in motivation as a result. In turn, unhappy employees are more likely to fall ill, require sick leave or even leave a workplace indefinitely.
Companies with unhappy staff or low retention levels are simply not good models for success. And, in the long run, end up spending more on hiring costs due to increased attrition. The most successful businesses are those that can maintain a stable setup of empowered employees that are all equally supported and motivated. In a recent study by the London School of Economics, it was concluded that people living in societies with greater gender equality are, on average, more satisfied with their lives than people living in societies with less gender equality. Their research is fascinating, though not surprising: providing opportunities for women in the workplace is not correlated to, and does not mean, reducing opportunities for men. But the societal benefits, both inside and outside the workplace, are irrefutable.
Keep your eyes peeled for the second installment of this article Why Gender Equality In Your Workplace Is Important: Part Two, where we consider the benefits to your organisation’s reputation, ability to hire and employee rights.