Too many men or women can hamstring your company
Evenly matched male-female ratio can lead to bigger profits
you’re at work, take a look around the office. If not, think about your co-workers.
If men or women greatly outnumber the opposite sex, the odds may be against your collective success.
At least that’s the finding of Sodexo, a global company that provides services for companies such housekeeping, reception services and equipment management, which surveyed 52,000 of its managers worldwide.
When the number of men and women managers is evenly matched, Sodexo found the team has a better chance of generating stronger profits, according to a new study from the company. When the ratio of male and female managers hovered between 40% to 60%, the team was 23% more likely to have seen an increase in gross profit over the previous three years as compared to teams dominated by one gender.
“It was important for us to say what is that sweet spot for Sodexo,’’ said Rohini Anand, Sodexo’s senior vice president and global chief diversity officer, noting that while many studies show a link between diversity and performance, few outline the ratio that can bring about the best results.
While other factors may also contribute to the stronger results, the research shows that gender balance “is one of those factors,” Anand says.
The desire to stay at Sodexo and seek greater professional opIf portunities also rose by 4% on the gender-balanced teams, as compared to the 1% morale boost experienced by other groups.
Knowing what gender mix can bring about stronger results, Sodexo’s CEO, Michel Landel has set a goal for women to occupy 40% of the company’s top 1,400 positions by 2025.
Currently, women are in 30% of those jobs.
Anand says that it’s important for advocates to “not just speak from intuition, but from facts,” when addressing the need for diversity.
There have been other reports showing stronger financial performance at companies that have more gender diversity on their boards or in senior management positions.
MSCI, which provides research for institutional investors, found that as of Sept. 9, 2015, companies in the MSCI World Index with women as key decision makers had an annual 10.1% return on equity as compared to 7.4% at companies without a significant number of women in leadership.
While the company could not determine a direct connection between more women in top roles, and the stronger results, the report noted that businesses with less diverse boards had more controversies around how they were run than was typical.
A study released in 2015 by management consulting firm McKinsey & Company found businesses that ranked in the top 25% when it came to gender diversity on their boards or in top management were 15% more likely to post financial returns higher than the national median for their industries.
“In principle, it makes good sense,’’ says Lotte Bailyn, professor of management emerita at MIT’s Sloan School of Management, noting that when numbers are fairly equal, team members can benefit from the advantage of diverse outlooks.