Happy International Women’s Day and Women’s History Month! It’s an excellent day to celebrate women and their achievements. This is also the perfect opportunity to talk about why gender diversity is good for business. A new HBR study “When Gender Diversity Makes Firms More Productive” powerfully demonstrates how gender equity is tied to business productivity and growth. Here are a few key insights from the research:
Companies that prioritize gender diversity are more productive
The study looked at 1,069 leading firms across 24 industries in 35 countries and found that regardless of industry, firms that prioritize gender equity are more productive than companies that don’t. From the study: “Gender diversity relates to more productive companies as measured by market value and revenue, only in contexts where gender diversity is normatively accepted … meaning a widespread cultural belief that gender diversity is important.”
That “only” is critical because it highlights a self-fulfilling cycle: industries, companies, and whole countries that prioritize gender diversity take it seriously and view it as a normal part of doing business will benefit from it. Those that don’t prioritize gender diversity or simply go through the motions, don’t.
Diversity attracts top talent
Gender diversity is important to job seekers, particularly top female candidates. Recent surveys show that 67% of employees in the US and Western Europe prefer diverse work environments and 61% of women look at the gender diversity of a company’s leadership team when deciding where to work. Smart, talented people go to companies and organizations that foster diversity. As the study’s authors note: “The most talented individuals go to places that do better with diversity, and this may be what is driving diverse firms in certain contexts to outperform their peers.”
Investors favor diverse companies
The study points to research that shows that gender diversity signals to investors that a company or organization is well-run and competent. Additionally, investors favor businesses that follow best practices such as diverse hiring. Some research has even shown a jump in stock prices after companies win an award related to diversity initiatives. Again, it’s important to note these findings include investors that are in a context where accepting gender diversity is the norm.
As the study’s authors note, in the past, there has been conflicting research about the positive impact of gender diversity. This latest research looks beyond a single industry or culture and concludes that for almost all companies, the investment in gender diversity is a good one. “The global business community is becoming more supportive of women and of women’s importance in the economy. This leads to a positive feedback loop – firms that support gender diversity will capture these benefits earlier, leading them to outlast their competitors.”
What great news to celebrate this month! Be sure to check out these Seattle events celebrating International Women’s Day and women’s achievements!
International Women’s Day Event at TUNE KITCHEN presented by the TUNE House Scholars
The Female Founders Alliance 2019 Champion Awards – April 4, 2019.
