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Women as the next smart business strategy

by Candice Silverstone of Deloitte Consulting

Women may well be the dominant source of economic growth in the near future – and organizations that are able to capitalize on the roles women play as economic actors will most likely have a competitive advantage as the world pulls out of the global recession. Deloitte research suggests that investment in women is the next source of substantial economic growth, for firms and countries, with direct correlations between increases in women in the workforce and increases in National GDP. In fact, a positive and often double-digit difference was found in productivity between those organizations with more women as leaders compared to those with less.

Fully integrating women into both the workplace and the marketplace can yield a significant return—what is termed the Gender Dividend. Maybe because great value derives not only from women as leaders, but also from the diversity of thought that women can help provide, as well as the use of a talent pool which, in many instances goes underutilised. There is a steady benefit that is earned by making wise, balanced investments in developing women as workers and potential leaders as well as understanding women as consumers and their impact on the economy and the bottom line. Done right, the Gender Dividend should be reflected in creating a better strategic position in terms of the broader socio-political environment; an ability to compete successfully in a global market; significant cost reductions in unwanted turnover; building a Talent Brand among female Talent; increased sales, expanded markets, increased innovation and improved recruitment and retention of a key talent segment.

Reaping the Gender Dividend, however, requires going well beyond achieving the numbers, and even eliminating the explicit discrimination that laws and policies have taken aim at over the past decades. It requires a concerted, strategic focus on how to fully integrate women’s experiences, perspectives, and voices into the fabric of an organization; as history has shown, this will not happen on its own. Instead, senior leaders must elevate women’s advancement to a strategic objective tied to their overall plan for growth—and having a business case is critical to getting started.

The Harsh Reality

Our clients increasingly recognise that in order to achieve sustainable economic, organizational, and consumer market growth, they must capitalize on historically untapped markets, and are demanding strategies and solutions to do so. However, the idea that most corporations have become gender-balanced or women-friendly is still a myth. Reports of progress in advancement, compensation and career satisfaction remain relatively bleak. Policies and procedures have often been changed but the problem lies in their application by managers, especially when they are under pressure. Despite an aging population and glaring skill shortages, leaders continue to overlook and underutilize women as a source of talent.

What is needed, therefore, is a business response to what is essentially a business problem, that is, an evaluation of the bottom line impact of investing in women. Organizations need to assess in real terms—revenues, profits, growth, productivity, customer satisfaction, or whatever metrics they use, to deem themselves successful—what they will achieve by shifting their mindset, re-evaluating investments, and reconsidering their leadership model to reflect a more balanced mix of women and men as workers and consumers. This shouldn’t be an abstract management exercise. Rather, organizations should use the same models that apply to any significant organizational or policy change; because in order to change the results, the model requires change.

The data clearly shows that time alone will not ensure that organizations reap the Gender Dividend; rather, there needs to be a clear, strategic focus on gender. While South Africa may be more progressive than its global counterparts in boasting females in management positions (attributed largely to legislated gender equality and employment equity, this finding falls short at more senior positions, with glaring absences of women at CxO and Board levels. The most common obstacles cited by our clients for the advancement of women include: lack of female role models at senior management levels; prevailing gender stereotypes; a male dominant culture; poor work / life integration and lack of meaningful advancement opportunities for females.

Consider this: a 2010 global Deloitte survey of executives found that 72 percent agree that there is a direct connection between gender diversity and business success, but only 28 percent document it as a top-10 priority for senior leadership. And while many leading companies have a number of women-focused initiatives in place at any given moment, they do not seem to be achieving the goal of consistently moving women into key decision-making and leadership roles—the roles that have the most impact on business success.

Deloitte recognizes that there is no standard, universal starting point or final endpoint in terms of gender mainstreaming. Our approach is similar to any diversity initiative – the aim being for organizations, corporations, and governments to benchmark where they are and where they need to go in order to capitalize on the Gender Dividend.

Worst of all, by depicting a single, unvarying obstacle, the glass ceiling fails to incorporate the complexity and variety of challenges that women can face in their leadership journeys. Added to the complexity of addressing women as a critical workforce segment, is the generational transition. This appears to be an appropriate term to encapsulate the challenges with which most organisations are faced. Such a term not only incorporates obvious age differences but also changing attitudes towards work and home; career and commitment etc. Even if organisations have not faced this transition already, they certainly will over the next few years.

Situational Adaptability

Deloitte views diversity management as a means of remaining recurrently adaptable to dynamic local and global contexts and managing the people within these contexts in an effective and value-adding way. What we know from experience in South Africa, for example, is that the attraction and retention of diverse staff depends in large part on management style, an inclusive and supportive culture, individual development opportunities and a visible top-management commitment to diversity (strategic alignment pulled through into the performance management system).

What we know from research is that, increasingly, the need to be treated as an individual constitutes an important reason for staying with an organisation. What we also know is that increased employee engagement positively impacts performance, and that 80% of the variance in employee engagement is the result of the individual’s relationship with hisher manager. The integration of peoplediversity into a measurable set of managerial competences also assists with simplifying the people management role and reducing the tendency for managers to view the elements identified as “flavour of the month” initiatives which will be a passing fad and be replaced by others.They begin to understand that the need to achieve targets, to get the most out of their direct reports and to manage diversity effectively, are here to stay and for critical business reasons. In essence, the starting point has always been the ‘business case’ for effective diversity/people management. In other words, the point of departure is to ‘get organisations excited’ about female diversity and people issues by highlighting their relevance to improving retention, productivity, motivation, commitment and organisational effectiveness. This ‘buy-in’ to the business case is crucial, particularly at a top management level.

Deloitte refers to the global competence of diversity as “situational adaptability”: the ability to respond appropriately to unique diverse and dynamic individuals and groups in a variety of ever-changing contexts. Organisational diversity competence consists of creating an enabling, fair and engaged space where individuals feel trusted and respected and are encouraged to be who they are (within business constraints) and to go the extra mile. Unlike Deloitte, many of the products of numerous consultancies, particularly in the area of diversity and more general people management, are not based on sound theoretical principles or conceptual models, but rather consist of an ad hoc series of piecemeal interventions gleaned from a variety of insubstantial sources.

Implementation

The evidence is clear: the more women in the workforce, the more per capita income rises and well-managed diverse teams deliver more robust and successful solutions. As a result, supporting the retention and advancement of women, and securing an inclusive environment where diverse talent can succeed should be a top priority. To do this, industries need to ensure that women are part of their talent pipelines, from entry level to senior levels.

Creating the optimum workplace for women requires change.  Identifying issues and initiating change efforts to create an inclusive work environment that supports female talent, moves way beyond compliance to inclusion. Inclusion means behaviours, policies, and practices that allow all employees to achieve their full potential. An inclusive culture transforms diverse perspectives into value for the organisation, their people, clients, suppliers, and the communities where they live and work.

In so doing, this initiative needs to be driven by the typical key change elements – i.e. a Solid Business Case, Senior Leadership Support, Effective Communication, clear Accountability and Metrics and Integration with relevant HR policies.

A conservative estimate of the cost of turnover for knowledge workers ranges from 200 to 500 percent of salary. The consideration of gender as part of the entire employment experience, including life-stages such as childbirth and childrearing, therefore becomes relevant. With adjustments to organizational policies and culture, we can close the gap between the professional horizons of working mothers, working fathers, and their colleagues. Questions that need to be answered concerning the recruiting and advancement of women should therefore centre on three key areas: employment needs and current efforts to attract women; retention, the bottom line, and competitive advantage; and building a diverse workforce.

Conclusion

Attracting and retaining women is not an end in itself for an organization, however. As noted earlier, the goal is better decisions and more effective leadership. Companies that can foster more gender diverse teams should have a competitive advantage. An organization that understands how to attract, retain, and advance women will be in a better position to capture its fair share of talent, reduce the costs of attrition, and generate a robust pipeline to leadership.

The importance of identifying the largely untapped female markets and guiding solutions to cultivate them for sustainable growth is indisputable. The development of meaningful gender strategies and building a reputable gender capability will assist not only in building the Employer Brand, but also reaffirm the organisation’s commitment to diversity and inclusion as a core strength that is integral to business strategy and the bottom line.

This report was produced by Candice Silverstone, a Manager in Human Capital, Deloitte Consulting. She has both generalist and organisational development experience, with extensive involvement in Human Capital and Talent Strategy formation, Employee Value Propositions, Executive Assessment, Leadership Development and Human Capital Benchmarking. Some of her recent client engagements include the design and implementation of attitude and perception studies, competency framework design and Talent Management Effectiveness Reviews. Candice has a particular interest in best practice with regard to attracting and retaining Generation Y Knowledge workers, as well as non-traditional teams that work virtually and remotely.

You may contact Candice at csilverstone@deloitte.co.za for a more detailed discussion around the impact of  e-tolling and practical advice on how to deal with these challenges.

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