June 17, 2014

Hiring Women Can Help the Bottom Line

By no means should this be taken to suggest gender discrimination, but if the choice comes down to a woman vs. a man – pick the woman. It’s going to save your company money.

That’s the findings of a study published by the Anita Borg Institute in California. It proclaims, “A wealth of research over the last decade has proven that companies benefit when they actively recruit, develop, and advance women. Study after study demonstrates that innovation-driven enterprises that strive for inclusion are better positioned to capture exceptional talent, reduce turnover costs, enhance organizational performance, and build a robust pipeline for developing leaders.”

The report lays out in various ways why hiring more women makes sense. It puts forth the argument that the strong buying power of women (women in the United States possess purchasing power in excess of an estimated $5 trillion) puts them more in tune with what consumers want. “Since women are responsible for a majority of household spending decisions, it follows that a diverse workforce may provide better insight into consumer preferences. This understanding can be translated into new or improved products and services, which leads to growth in market share or expansion into new markets. Simply put, women know what women want.”

The report caught the attention of Washington Post columnist Catherine Rampell. She observes, “There are many feel-good, fairness-based reasons to hire and invest in women. You’re probably familiar with at least a few of them: Women have historically had fewer opportunities in the workplace. They don’t get promoted as frequently. They are increasingly the sole or primary breadwinner for their families. There’s an even better reason that is less frequently cited. Women, you see, will make you money.”

That belief is backed up in the Anita Borg report. It says, “For several years, McKinsey & Company has conducted extensive research on the relationship between business outcomes and the number of women in leadership roles. McKinsey’s findings, published annually in a series titled “Women Matter,” provide evidence that companies with larger numbers of women at senior management levels demonstrate better organizational and financial performance. A 2010 McKinsey global survey of a broad cross-section of business executives reveals that 72% of respondents believe there is a direct connection between a company’s gender diversity and its financial success. The totality of McKinsey’s research provides considerable support for this linkage, and presents a compelling argument for greater gender diversity within corporations.”

The report also includes details from a study, which “concluded that firms that promote women to senior management positions enjoy superior economic performance, especially companies that are focused on innovation. Women, they say, bring a complementary set of interpersonal management skills, such as inclusiveness, and represent other employee voices.”

Rampell wrote her piece in advance of Equal Pay Day 2014, “the symbolic reminder of how far into 2014 women would have to work to catch up to the wages earned by men last year, thanks to the intransigent gender pay gap” which took place in April. She writes, “And perhaps the best argument for why hiring women will help your firm’s bottom line: They still, amazingly, come at a discount. At least for now.”

She adds, “Some of the gap is explained by the types of occupations women go into, either by choice or opportunity. But even within occupations, women almost always earn less than their male counterparts. Of all the occupations the Bureau of Labor Statistics published data for last year, only three showed women receiving higher median weekly earnings than their male counterparts: bakers; wholesale and retail buyers; and miscellaneous computer-related occupations. Even controlling for factors such as experience, industry and union status still leaves about 40 percent of the total gender pay gap unexplained.”

Read more in Best Careers for Women

Keith Griffin is an award-winning business writer and editor with more than 30 years experience as a journalist. His work has been published in The Boston Globe, Medical Economist, Good Housekeeping, About.com, the Hartford Courant, CT Law Tribune and numerous other regional publications.
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