The slow march to gen­der par­ity

Financial Mirror (Cyprus) - - FRONT PAGE -

Chris­tine La­garde, the In­ter­na­tional Mon­e­tary Fund’s man­ag­ing di­rec­tor, re­cently warned that the world risks a new “medi­ocre nor­mal” of slower growth. She is not alone in her con­cern.

Eco­nomic pol­i­cy­mak­ers around the world are look­ing for ways to boost growth, with in­fra­struc­ture in­vest­ment top­ping most lists. But, as La­garde reg­u­larly re­minds her au­di­ences, another, of­ten-over­looked rem­edy is to in­crease the eco­nomic par­tic­i­pa­tion and ad­vance­ment of women.

Women ac­count for half of the global la­bor sup­ply and about 70% of the world’s con­sump­tion de­mand. Yet there re­mains a long way to go in re­al­is­ing their eco­nomic po­ten­tial, as the World Eco­nomic Fo­rum’s just-re­leased Global Gen­der Gap Re­port 2014 con­firms.

In many coun­tries, both de­vel­oped and de­vel­op­ing, men and women are at or near par­ity when it comes to ed­u­ca­tion and health, ac­cord­ing to the re­port, which cov­ers 142 coun­tries and 94% of the world’s pop­u­la­tion. But, as the at­tack on the heroic Pak­istani school­girl and Nobel Peace Prize lau­re­ate Malala Yousafzai demon­strated, girls and women are still blocked from ed­u­ca­tion in many places, some­times through vi­o­lence.

More­over, in terms of eco­nomic par­tic­i­pa­tion and op­por­tu­nity, women con­tinue to lag be­hind men by a con­sid­er­able 15-25% even in the most gen­der-equal so­ci­eties. Glob­ally, only about half of work­ing-age women are em­ployed, and they earn three-quarters as much as men, even when they have the same level of ed­u­ca­tion and are in the same oc­cu­pa­tion.

Mean­while, women are over-rep­re­sented in in­for­mal, tem­po­rary, and part-time jobs, most of which are low­pro­duc­tiv­ity po­si­tions with low pay, no ben­e­fits, and limited op­por­tu­ni­ties for ad­vance­ment. Based on the rate of progress over the last nine years, it will take another 81 years to close the world’s eco­nomic gen­der gap and un­lock the as­so­ci­ated eco­nomic ben­e­fits.

By one es­ti­mate, women hold about 24% of top man­age­ment po­si­tions glob­ally, with com­pa­ra­ble fig­ures across re­gions and de­vel­op­ment lev­els. A re­cent study by the Credit Suisse Re­search In­sti­tute (CSRI) of 3,000 com­pa­nies in di­verse sec­tors and coun­tries, how­ever, yields a more de­press­ing con­clu­sion: women oc­cupy only about 13% of top man­age­ment po­si­tions (CEOs and peo­ple who re­port di­rectly to them), on av­er­age, with even the high­est rate, in North Amer­ica, amount­ing to only 15%.

Women’s par­tic­i­pa­tion, more­over, is skewed to­ward po­si­tions in less in­flu­en­tial ar­eas like shared ser­vices, in which op­por­tu­ni­ties for pro­mo­tion to top po­si­tions are limited. And, though fe­male par­tic­i­pa­tion on company boards has in­creased in almost ev­ery coun­try and sec­tor over the last three years, with the largest gains oc­cur­ring in coun­tries that have in­tro­duced quo­tas, women hold only about 12.7% of board po­si­tions, on av­er­age.

The gen­der gap does not hurt only women; it hurts ev­ery­one. Healthy, ed­u­cated women are more likely to have health­ier and more ed­u­cated chil­dren, cre­at­ing a vir­tu­ous cir­cle of de­vel­op­ment. WEF data sug­gest a strong cor­re­la­tion be­tween a coun­try’s progress in clos­ing the gen­der gap – par­tic­u­larly in ed­u­ca­tion and the labour force – and its eco­nomic com­pet­i­tive­ness.

The business case for women in lead­er­ship is strong. Com­pa­nies with more women in top man­age­ment and board po­si­tions bet­ter re­flect the pro­files of their cus­tomers and em­ploy­ees, ben­e­fit from more di­verse views when solv­ing prob­lems, rank higher on in­di­ca­tors of or­gan­i­sa­tional co­op­er­a­tion and health, and re­port higher prof­itabil­ity and re­turns on eq­uity. Fur­ther­more, the CSRI study in­di­cates higher re­turns on eq­uity, higher val­u­a­tions, and higher pay­out ra­tios, with no dis­cernible dif­fer­ences in risk-tak­ing.

Re­al­is­ing the eco­nomic po­ten­tial of women re­quires changes in poli­cies, business prac­tices, and at­ti­tudes. De­vel­oped coun­tries should invest in af­ford­able child care, early child­hood ed­u­ca­tion, and parental leave; shift from fam­ily to in­di­vid­ual taxes; and pro­vide more gen­er­ous tax cred­its, ben­e­fits, and pro­tec­tions for low-wage and part-time work­ers. In de­vel­op­ing coun­tries, le­gal re­forms that give women equal rights in land own­er­ship, in­her­i­tance, and ac­cess to credit are es­sen­tial.

Busi­nesses can com­mit to gen­der par­ity by tak­ing sev­eral con­crete steps. They can set tar­gets for re­cruit­ment and re­ten­tion lev­els; ini­ti­ate af­fir­ma­tive searches to meet those tar­gets; in­tro­duce men­tor­ship pro­grammes and di­ver­sity train­ing to at­tract, re­tain, and pro­mote women; and es­tab­lish trans­par­ent salary bands to help track and re­duce gen­der pay gaps.

At the same time, hu­man-re­source prac­tices should take ac­count of un­con­scious bi­ases, risks of stereo­typ­ing, and doc­u­mented gen­der dif­fer­ences in be­hav­iour. For ex­am­ple, re­search finds that women tend to be less con­fi­dent and less likely to ne­go­ti­ate for pay raises and pro­mo­tions than equally qual­i­fied men. Com­pa­nies can also use their in­flu­ence with sup­pli­ers, dis­trib­u­tors, and part­ners to support women-owned busi­nesses and en­cour­age gen­der-neu­tral ad­ver­tis­ing. And com­pa­nies can change how jobs are struc­tured and re­mu­ner­ated to en­hance flex­i­bil­ity, thereby help­ing both men and women bal­ance work and fam­ily de­mands.

Gen­der gaps in eco­nomic par­tic­i­pa­tion and op­por­tu­nity for women vary sig­nif­i­cantly across re­gions. The WEF’s find­ings show that the Mid­dle East and North Africa suf­fer from the widest gen­der gap, with women reach­ing only 40% of par­ity in the work­place, on av­er­age, com­pared with nearly 80% in North Amer­ica. In­deed, the over­all gap has widened in Jor­dan and Tu­nisia.

Even so, there are pos­i­tive trends. Over the last nine years, Saudi Ara­bia has re­duced its eco­nomic gen­der gap, rel­a­tive to its start­ing point, more than any other coun­try.

La­garde chal­lenges pol­i­cy­mak­ers and business lead­ers alike to make changes that broaden eco­nomic par­tic­i­pa­tion and op­por­tu­nity for women. The eco­nomic gains from do­ing so are sig­nif­i­cant. In the words of Klaus Sch­wab, the WEF’s founder, “Only those economies which have full ac­cess to all their tal­ent will re­main com­pet­i­tive and will pros­per. But, even more im­por­tant, gen­der equal­ity is a mat­ter of jus­tice.”

It would be dif­fi­cult to iden­tify more com­pelling rea­sons to ac­cel­er­ate progress to­ward gen­der par­ity.

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