The gender equality imperative in the workplace
Gender equality is paramount for increased inclusion as well as business profitability arising from their increased labor force participation. As a result, the role of women in the 21st century economy will be one of the main issues discussed during the III CEO Summit of the Americas, held on April 12 and 13 in Lima, Peru.
One of the most pressing challenges for Latin America and the Caribbean continues to be how to close the workforce gender gap. The gender gap is present in all areas from junior to management positions. According to the Global Gender Gap Report, Latin America and Caribbean is one of the worst positioned regions in the world regarding female economic participation and opportunity, even though it is at the top in terms of female educational attainment right behind North America and Western Europe.
However, we can close this gap and enjoy the benefits of gender equality if the private sector in the region takes a leadership role. Some recent initiatives are already pointing in that direction. For example, Chile, Argentina, Peru and Panama have launched Gender Parity Initiatives. These public-private alliances aim to reduce salary differences between men and women and increase female labor participation with more representation in the top management. In Chile, 108 companies were enrolled in the Promociona Chile program to train female workers and improve their access to top positions at their companies.
In a study that IDB Invest recently published with EDGE, a gender certification entity for businesses, we highlighted companies with more women in leadership positions. The research shows that, out of the 11,000 companies surveyed, those managing gender equality with a certification have 22% female directors on their Boards compared to 9% at companies which do not. The analyses show that the certified companies in Latin America and the Caribbean implement policies such as flexible work jointly with practices such as women leadership programs.
Why do we value gender equality in the private sector?
In January 2018, McKinsey published the conclusions of a survey on gender, ethnic and cultural diversity in the workplace that linked gender diversity to higher revenues and stronger economic margins. Another regional analysis by McKinsey, which covered 345 companies in Latin America, concluded that the companies with higher female representation yielded returns on investment and profit margins were 44% and 47% higher, respectively.
To address the lack of gender diversity, some sceptics assume that women should solve the inequality themselves fighting on their own to achieve it or acting the way men do. Others are worried about a zero-sum game in which men fear that if women have more opportunities, men will have fewer.
At IDB Invest we launched a survey in which we asked our personnel if they thought that gender equality was important to maintain competitiveness in the 21st century. Both men and women responded 83% in favor of gender equality. Moreover, this year we were granted the “Assess” level EDGE certification. This shows our public commitment to gender equality and an inclusive work culture by men and women. In our portfolio of clients, three companies have already received the EDGE Certification. Regional governments and private sector clients are with us in this effort to set goals and measure progress through other certification entities in the region such as the UNDP. This is just the beginning, and we need to commit to do more. IDB Invest along with regional companies can speed up this progress if we start socializing changes in the workplace.
For example, as part of our action plan at IDB Invest, we have created four cross-department teams to promote changes in recruitment, promotions, salary gap and flexible work across the organization. We also see opportunities for top managers to mentor women, invest in female talent development and hire diverse teams. Management teams can encourage men to use their paternity leave, promote effectiveness more than physical presence at the office, and commit to gender diversity at event panels. These are a few examples of how to highlight women’s professional work and show that, when women are empowered, men are too. Upon analyzing data on business profitability and the creation of economic value, both men and women have a lot to win. The time to act is now.
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This article was originally published on El País in Spanish