A Business Case For Women

Women in developed economies have made substantial gains in the workplace during recent decades. Nevertheless, it's still true that the higher up in a company you look, the lower the percentage of women.

But some companies have moved successfully to increase the hiring, retention and promotion of female executives. Their initiatives have included efforts to ensure that HR policies aren't inadvertently biased against women or part-time workers, to encourage mentoring and networking, to establish (and consistently monitor at a senior level) targets for diversity and to find ways of creating a better work-life balance.

Changes like these have a price, but there are business advantages to making them--above and beyond the branding benefit that might accrue to companies viewed as socially progressive.

Research in Europe and the U.S. suggests, for example, that companies with several senior-level women tend to perform better financially. Hiring and retaining women at all levels also enlarges a company's pool of talent at a time when shortages are appearing throughout industries.

Why Women Matter
Few women become executives. Across the EU, women account for only 11% of the membership of governing bodies such as boards of directors and supervisory boards, our research has found. In the U.S., fewer than a third of the leading 1,500 companies had even a single woman among their top executives in 2006, according to research from Columbia University and the University of Maryland. The numbers are even more discouraging elsewhere: In South Korea, for example, 74% of the companies surveyed in 2007 had no female senior executives. We believe that such underrepresentation is untenable in the longer term--and not only because it's unfair.

More Workers Needed
Many countries and regions face talent shortages at all levels, and those gaps will worsen. By 2040, Europe will have a shortfall of 24 million workers aged 15 to 65; raising the proportion of women in the workplace to that of men would cut the gap to 3 million. In the U.S., the upcoming retirement of the baby boomers will probably mean that companies are going to lose large numbers of senior-level employees in a short period of time; nearly one-fifth of the working-age population (16 and older) of the U.S. will be at least 65 by 2016.

Mismatches between training and employment can also cause shortages. In the U.K., male-dominated sectors with a dearth of workers include engineering, information technology and skilled trades--yet 70% of women with science, engineering or technology qualifications are not working in these fields.