Posted by Kirsten Newitt

Investing in women’s employment: good for business, good for development

Most people intuitively agree that equal opportunity for women and men in the workplace is good business practice, both as a matter of equity and efficiency. Unfortunately, there are a number of reasons why this belief doesn’t always play out in practice, including entrenched cultural ideas about gender roles at home and at work and persistent (direct and indirect) discrimination against women in the labour market. In many sectors, such as mining and construction, women are only a small minority of workers, and in almost all sectors – including those where women are in the majority – women are less likely than men to be in supervisor or management positions.

Why women’s employment matters for business

However, there is a growing body of evidence that suggests that paying much closer attention to women’s employment has quantifiable business benefits. Research studies aside, it is also common sense that efficiency and growth are negatively impacted when the potential of almost half the prospective workforce is not fully realised. Increasingly, regulators and policy makers are seeking to ensure that the development gains of women’s economic participation are maximised. This means empowering women workers to achieve their potential in the labour market by improving women’s access to quality jobs, including those in sectors that have historically employed a low proportion of women.

But regulation and government policy is only one part of the equation: getting employers on board is pivotal and making a strong business case can be an important tool in this process. When a business understands the financial and strategic benefits of investing in women’s employment, it is more likely to stay high on the company’s list of (ever competing) priorities. And our work suggests that the business rationale, while differing by geography and sector, is strong. For many businesses, women represent an untapped source of talent and productivity.

Ergon’s work with IFC

Ergon has been working closely with the International Finance Corporation (IFC) over the past 18 months through WINvest, the World Bank Group’s global partnership with the private sector on women’s employment, to explore the business case for investing in women-friendly policies and practices. The resulting report focuses on making the business case in emerging and developing markets, where the evidence base is not as strong as in high-income economies and labour markets tend to function in different ways.

Company case studies

One of the most important elements of the report is a series of in-depth company case studies, developed through site visits to companies in Brazil, Chile, Ukraine, Vietnam, Kenya and Thailand. All of the companies involved in the research were convinced that investing in women workers makes business sense. We found that:

–  Inclusive recruitment and training policies have helped companies to expand the pool of job candidates at all levels – from entry-level and unskilled positions through to senior management and the boardroom – and become an ‘employer of choice’. For many employers, the need to address skills shortages is a major driver. In Brazil, the construction company Odebrecht managed to increase its access to skilled tradespeople on a remote construction site by encouraging more women to participate in its training programme and in so doing, avoided spending tens of thousands of dollars each year on flying in workers from other parts of Brazil.

–  In Kenya, the tea and fresh produce supplier Finlays’ focus on improving access to training available to female and male employees at all levels of the organization has meant that the company is better able to make more efficient use of all of its workforce (women and men alike).

–  Programmes that improve work-life balance for parents or health outcomes for women can lead to potentially significant returns through improved staff retention and attendance. At Nalt Enterprise, a garment factory in Vietnam, staff turnover fell by one third after the company established a kindergarten for workers’ children.

–  Higher levels of gender diversity can drive up productivity and innovation, by introducing new ways of working, strengthening team dynamics and improving decision-making processes. In Chile, managers and workers from Anglo American said that an increase in the number of women truck drivers had had a clear positive impact on team performance, by introducing fresh perspectives and new ideas about the best way to get the job done.

–  Employing more women can enhance a company’s relations with the local community. This is a very serious consideration for large infrastructure and extractives projects, where the quality of engagement with the local community is vital to the success of a project. Companies like Rio Tinto, Anglo American and Odebrecht say that employing more women on their sites extends the economic benefits of a project more broadly amongst local communities and enhances wider information-sharing amongst the social networks of local men and women alike.

–  Hiring more women ensures that a company’s workforce is representative of its customer base and provides greater insights into consumer preferences: globally, women either make or influence up to 80 per cent of buying decisions. Companies such as Belcorp and PepsiCo are consciously drawing on the insights and experiences of the women in their workforces to better understand household buying patterns and what influences them.

Beware the limitations

However, whilst our research found numerous positive examples, a note of caution should be sounded on the limitations of the business case. Although the report outlines a range of techniques for measuring the costs and benefits associated with increased investment in women’s employment, these can be difficult to monetise, particularly where they accrue over a long period of time (e.g. changes in reputation or productivity). Moreover, the number of variables that affect workforce productivity or business performance mean that it is often difficult to attribute improvements to changes in women’s employment. Overall, this complexity often doesn’t translate into a clear-cut business case.. Also, where too much emphasis is placed on the business gains associated with equality, this can obscure the importance of rights-based arguments and removes the focus from employee needs (cf business needs) and systemic inequality.

However, provided that these limitations are clearly understood, we found that the business case can be an important lever for launching and sustaining change in companies’ approaches to women’s employment. Our research suggested that the business case is strongest where it is not presented in isolation, but rather used alongside social and ethical arguments for change. Most of the companies that we spoke to had launched policies to support women primarily because they thought it was the right thing to do, not because it made business sense. Importantly, this helped to sustain change by creating a greater sense of personal commitment and determination amongst managers. Whilst monitoring the effectiveness of measures was important to companies, they often didn’t feel the need to monetise the benefits in each case.

Mobilising change: bringing together the business case and the ‘how-to’

Finally, initiatives to support women’s employment can offer challenges as well as opportunities: initiatives to increase gender diversity and women-friendly policies must be supported by the right guidance, communication and leadership to ensure that the organisational impact on team dynamics is positive.  Just having an understanding of the business case is not enough, as companies need a clear view of the obstacles that women face in the workplace, both internal (e.g. unconscious bias on the part of recruiters) and external (e.g. cultural beliefs regarding gender roles), in order to successfully mobilise change.