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"Unleashing the Power of Gender Diversity: How Strategic Implementation Can Drive Corporate Performance and GDP Growth"


Gender Diversity Initiatives at Workplace
Strategic Implementation of Gender Diversity Initiatives: A Catalyst for Corporate Performance Enhancement and GDP Growth

If you are interested in applying to GGI's Impact Fellowship program, you can access our application link here.


 

Abstract


In recent years, the dialogue surrounding gender diversity within corporate settings has gained significant traction. The question of whether proper implementation of gender-diverse strategies and policies can be the catalyst for improved corporate performance and national GDP growth has become a pivotal point of discussion.


This white paper delves into the multifaceted challenges contributing to the retention issue and proposes actionable solutions to foster an inclusive environment that supports the career progression and retention of women. It delves into this discourse, exploring the potential correlations between gender diversity initiatives, enhanced corporate performance, and economic growth. The study further explores the global economic implications of gender gaps and offers case studies highlighting successful diversity initiatives. Recommendations are provided to address healthcare, flexible work options, leadership representation, and childcare, with measurable impacts outlined for organizational implementation. Acknowledging limitations, the study underscores the transformative potential of gender diversity as a catalyst for organizational success, emphasizing the need for awareness, acceptance, and an employee-centric culture.




1.Introduction


Gender diversity has emerged as a pivotal element within the corporate sphere, playing a crucial role in fostering inclusive work environments and driving sustainable economic development. Empirical evidence underscores that organizations embracing gender diversity are more likely to experience heightened levels of innovation, improved decision-making processes, and strengthened financial performance.


In accordance with a report by the United Nations, companies that prioritize gender diversity demonstrate superior financial returns, increased profits, and sustained long-term growth. Augmenting the number of women in the workforce is associated with additional benefits such as a boost in the country's Gross Domestic Product (GDP), reduced attrition rates, and an expanded pool of talent for recruitment purposes.


Moreover, the broader societal impact of gender-inclusive policies manifests positively in national economic indicators. An analysis from 2019 reveals that companies in the top quartile for gender diversity on executive teams were 25 percent more likely to achieve above-average profitability compared to companies in the fourth quartile. This represents an increase from 21 percent in 2017 and 15 percent in 2014 (see Exhibit 1).



The graph accompanying this data also illustrates a growing imperative for gender diversity among organizations globally over the past decade.


In a recent article/report published in July 2023, data compiled from over 300 companies in India between January 2022 and January 2023 indicates a 50% increase in the women's workforce compared to 2021. The study further reveals that 70% of companies now have well-defined goals for achieving gender diversity in their hiring, marking a 13% growth from the previous year. Large enterprises and startups/SMEs have implemented programs to foster gender diversity, with 57% and 43%, respectively, actively engaged in such initiatives. Additionally, 51% of companies have collaborated with job platforms to enhance recruitment effectiveness.


Participation remains a challenge and retention serves as an effect despite notable increase in hiring. Despite the recognized importance of work-from-home (WFH) policies for employee well-being, the DivHERsity Survey conducted in 2022 indicates a gradual decrease in the adoption of this policy during the post-pandemic period. In 2019, 59% of companies implemented WFH, a figure that surged to 85% in 2020 and 83% in 2021, only to decrease to 63% in 2022.


In conclusion, the concept of diversity serves as a driver of innovation, improved decision-making, and overall business success.




2.Current position of women participation in India’s workforce and standing in Global Economics:




Exhibit 2 illustrates that in order for India to transition into the GDP growth quadrant, a significant reduction in gender gaps within the labor force is imperative, as it could substantially elevate the country's position in the global economic landscape.



As per Exhibit 3, India currently boasts the lowest GDP per capita among BRICS nations, standing at approximately $6711, a figure directly correlated with its lowest female labor force participation rate of 21.18%. The term 'BRICS,' coined in 2001 by Goldman Sachs economist Jim O'Neill, refers to a group of emerging market countries—Brazil, Russia, India, China, South Africa, among others—aiming to forge deeper connections and collaborate on economic expansion and trade. These nations serve as a counterbalance to traditional Western influence.



Analysis of Exhibit 4 reveals that despite being acknowledged as the world's fifth-largest economy, India significantly lags behind other major economies in leveraging its female labor force. These graphical representations underscore the untapped potential of women's participation in the Indian workforce.


A report by the Council on Foreign Relations (CFR) emphasizes that retaining gender diversity in the workforce could result in an overall gain of $2.9 trillion or $2,191 per person for India 4 . The prevailing low female participation is not attributed to women's illiteracy, given that STEM classes in India have 43% female enrollment 5 . However, STEM jobs witness a mere 13% female participation, contributing to an overall Female labour participation rate of approximately 19%. It is pertinent to note that addressing this issue extends beyond mere charitable intentions or meeting UN sustainability goals.


Contrary to expectations, India's female labor participation rate has exhibited a surprising decline over the past two decades, plummeting from 32% in 2005 to 19% in 2021, despite increased organizational hiring efforts.


The reasons for this decline are multifaceted, and while various factors hinder women's participation and retention in the workforce, our research in this paper is specifically focused on examining organizational shortcomings.




3.What do women want in the workplace?


Analysis of employer perceptions regarding diversity in the workplace, juxtaposed with women's perspectives on ideal workplaces, reveals substantial gaps in the measures taken by employers to enhance diversity. Exhibit 5 provides transparency concerning these disparities.



While there is a lack of comprehensive research on this topic in India, similar concerns have been identified within existing research paradigms.


Consequently, the following factors emerge as key influencers of gender diversity in India:


1. Healthcare benefits (maternity): As highlighted in Exhibit 5, there is a significant misalignment by 73% between the perceived importance of relevant health benefits for working women and employers. Recognizing and bridging this gap is essential to ensure that healthcare provisions, particularly maternity-related benefits, are effectively addressing the needs and priorities of women in the workforce.


2. Flexibility in work: While flexible work options emerge as a top priority for women, the 34% deviation in employer perception underscores the need for a nuanced understanding of the value placed on work-life balance. Implementing flexible policies can not only attract diverse talent but also enhance overall productivity and job satisfaction, fostering a workplace culture that values the well-being of its employees.


3. Women representation in Leadership/Management roles: The nexus between the control over work, mental health benefits, and the underrepresentation of women in leadership underscores the significance of aligning organizational strategies with the vision. Leadership choices directly impact the work environment and employee well-being, making it imperative for leadership teams to actively address these disparities. Promoting gender diversity in decision-making roles not only enhances organizational resilience but also fosters a culture of inclusivity and equality.


4. Child care and Parental leave: Recognizing the pivotal role of comprehensive support for child care and parental leave is paramount in alleviating the challenges faced by women during and after pregnancy. Acknowledging this critical phase and implementing supportive policies not only ensures the well-being of working mothers but also safeguards against talent attrition. Organizations that prioritize family-friendly policies not only attract and retain top talent but also contribute to a more inclusive and compassionate workplace.




4.Case Studies:


Illustrative case studies highlight successful gender diversity initiatives in various organizations. These examples showcase specific strategies, challenges faced, and the tangible benefits realized, providing practical insights for implementation.



4.1Healthcare and Maternity:


Adobe's commitment to a comprehensive healthcare program not only prioritizes the well-being of its female workforce but also plays a pivotal role in retaining talent. The company has witnessed significant progress in increasing women's representation in its global workforce, reaching 33.8% in FY2021. The growth from 5,527 to 8,743 employees self-identifying as women from FY2017 to FY2021 marks a substantial 58.2% increase. This upward trajectory reflects Adobe's dedication to fostering a diverse and inclusive workplace.


By offering 100% coverage for preventive services, fertility benefits, and robust maternity support, Adobe creates an environment that not only recognizes but actively addresses the unique needs of its female employees. The company's inclusive coverage of contraceptives and consistent provision for abortion services further underscores its commitment to supporting the diverse choices and health requirements of its female workforce.


This tailored healthcare approach not only promotes the well-being of female employees but is also strategically aligned with Adobe's efforts to enhance gender diversity. It sends a powerful message that Adobe values its employees, acknowledges their life stages, and actively supports them, contributing to a positive work culture. Ultimately, Adobe's woman-oriented healthcare strategy is a strategic investment that not only promotes employee satisfaction and well-being but also contributes to the ongoing progress in talent retention, particularly among women in the workforce.


According to a study by Deloitte, across the age between 19 to 64 a woman pays more than a man for health care even if maternity related expenses are removed which actually translates into 18% more expenses than men in annual out of pocket expenses. Coverage of this cost by the companies could be as less as 12$ per employee per year. Employers should be mindful of the policies taken up by them through the insurers if it's covering relevant aspects key to women too.



4.2 Flexibility of workplace from a Woman's Perspective:


Numerous organizations grapple with challenges related to workforce participation and retention, a recent illustration being Tata Consultancy Services (TCS). The company faced a notable issue with attrition, particularly among women, following the implementation of a return-to-office policy. TCS acknowledged in its annual report that a substantial portion of attrition, leading to financial loss, stemmed from fewer women working in the company who were required to work from the office. This departure of female talent was emphasized by TCS's Chief Human Resources Officer as 'unusual,' but a survey revealed that altered domestic arrangements due to the Covid-19 pandemic induced lockdown prompted female employees in the tech sector to prefer a hybrid work model over a complete return to the office.


Women, constituting a significant segment of the workforce, pose an ongoing retention challenge for organizations. The departure of female talent not only impedes diversity initiatives but also diminishes the potential for innovation and sustainable growth. Recognizing the underlying factors influencing women's workplace participation is crucial for formulating effective strategies to enhance organizational performance.


Furthermore, a report from Harvard Business Review highlights that organizations that embrace flexible work arrangements witness a substantial uptick in employee performance. Specifically, a study conducted by Stanford University found that remote workers experienced a 13% performance improvement, emphasizing the positive correlation between flexibility and productivity.


Organizations championing workplace flexibility have also seen a positive impact on talent retention. Deloitte's research underscores a robust correlation between the extent of flexibility provided to women and their long-term commitment to an employer. The survey reveals a compelling statistic: two-thirds of women engaged in highly flexible work arrangements express an intention to remain with their employer for a duration exceeding three years. In contrast, a mere 19% of women without any flexibility indicate a similar commitment.


This data highlights the pivotal role that flexible work arrangements play in influencing women's tenure within organizations, emphasizing the strategic significance of fostering a flexible and accommodating work environment.



4.3 Leadership:


MSCI found that companies with strong female leadership at the board level generated a return on equity 36.4 percent higher than companies without a critical mass of women on their boards.


Indra Nooyi, an inspirational woman leader, brought diverse contributions to PepsiCo's success through her strong leadership. Her strategic vision, emphasis on design thinking, revolutionized product development and marketing, aligning PepsiCo with evolving consumer preferences for healthier options. Nooyi prioritized diversity and inclusivity, fostering innovation through diverse perspectives in design teams. This approach not only led to groundbreaking product launches but also redefined marketing strategies, evident in campaigns like "Live for Now" and Tropicana's rebranding. Nooyi's consumer-centric focus extended to holistic experiences, demonstrated by the redesign of Lay's potato chip packaging. Her unique leadership style, combining financial acumen, innovation, and inclusivity, significantly contributed to PepsiCo's enduring success in the competitive market, establishing her as a pioneering woman leader in corporate history.


Women can also be good leaders who can bring in financial inclusivity leading to higher profits with varied skill sets involving diverse perspectives, striving for innovation and empathetic decision making. They can also help the organization in driving diversity representation at all levels of the organization without compromising on relevant skills & mindset needed for the role by the candidate(not compromising on the quality of the hire) through right mentorship, guidance & frequent communication related to the decision taken up for the vision of the organization etc.



4.4 Child Care and Paternal Leave:


Patagonia has demonstrated exceptional success in retaining mothers within the company, boasting an impressive 95% retention rate for moms since the inception of its program over 35 years ago. The company's commitment to family values is deeply ingrained in its corporate culture, offering 16 weeks of paid maternity leave for women, 12 weeks for men, and providing access to an on-site childcare center for every family. Additionally, Patagonia covers the expenses of a caretaker accompanying parents on business trips, exemplifying a holistic approach to supporting families.


Two Patagonia team members, Tessa Byars and Dean Carter, vocalize the passion and commitment to family-centric policies within the organization. The positive impact of such policies on retention is evident, with the company's success highlighted in contrast to the recent implementation of similar policies by ITC, resulting in positive retention outcomes.


The perspective of a Patagonia employee emphasizes the societal importance of childcare policies, challenging the traditional view by equating it to the significance of amenities like parking lots. This perspective underscores the essential role childcare plays in supporting a workforce. The Ministry of Women and Child Development's national creche scheme aligns with the recognition of childcare's importance.


Drawing from global examples, Japan's strategic adoption of "womenomics," including the expansion of childcare facilities, led to a significant increase in female labor force participation from 1990 to 2016. The comprehensive Patagonia case study further illuminates the company's pioneering family policies and their positive implications for workforce retention.




5. Challenges:


●The provision of healthcare benefits at the scale of Adobe may not be feasible for every organization, necessitating tailored recommendations for small, medium, and large enterprises. A comprehensive analysis is required to ascertain the priority among the five offered benefits, considering factors such as cost; notably, maternity benefits are likely of paramount importance. Allocating a dedicated budget for professional consultation is advised.


● For industries beyond the realm of Information Technology, where hybrid work cultures may differ, defining the optimal framework becomes a pertinent consideration. Tailoring these frameworks to suit the distinctive needs of non-IT employees is crucial for fostering a productive and inclusive work environment.


● Cultural & societal norms can pose potential challenges, such as designated corporate holidays aligned with a singular religion especially in smaller organizations. Diversifying corporate holiday calendars to accommodate various practices of different cultures showcases an example of moving forward to deal with this challenge.


● The challenge of providing dedicated real estate for certain benefits may be a financial constraint for some organizations.




6 . Recommendations and Measurable Impacts for Organizations:


Access to minimum healthcare benefits catered to Women: Companies who provide policies, that cover relavant health aspects of women can outweigh the budgetary constraints with the benefits employers get access to such as improvement in corporate financial performance through retention of women.


Flexible work policy adoption: Ensure to adopt a mandatory hybrid work policy in relevant sectors of work such as IT etc. For the rest of the sectors, introduce goal based attendance then minimum hours needed to be sent/ flexibility over sharing work by fellow colleagues as a first step in addressing access to flexible work options which inturn improves productivity.


Women representation in Leadership positions: For diverse point of view, Push the potential candidates to board of executives if possible else you can onboard a female independent director who could also be an industry leader. This step shall lead to an increase in the number of women across all levels of the organization through relevant strategies such as mentorship, inculcating a culture of continuous learning etc.


● Ensure to provide financial assistance for child care through vouchers/tie ups and also a space dedicated for children of employees within workspace along with availability of parental leaves as a mandatory benefit.


Utilize KPIs for Monitoring Initiatives: Develop and employ KPIs that offer quantifiable insights into the effectiveness of diversity and inclusion initiatives. These indicators should be regularly monitored to facilitate evidence-based decision-making and demonstrate the tangible impact of the organization's commitment to diversity.


By incorporating these refined recommendations, organizations can not only set the stage for comprehensive diversity and inclusion but also establish a systematic approach for ongoing assessment, refinement, and improvement in line with industry benchmarks and organizational goals.




7. Limitations and Assumptions:


It is of utmost importance to acknowledge the limitations and scope of this paper to give a holistic and clear understanding of it’s application:


Primary focus: This study primarily focuses on women, and its findings are not explicitly extended to the LGBTQIA+ community.


Indian Subcontinent: The study is focused primarily on the subcontinent of India. Whilst acknowledging this limitation, companies can operate in various domestic & global settings and exercise caution while extrapolating these findings and considering the unique dynamics of each region.




8. Conclusion


The potential of maintaining gender diversity in corporate landscapes emerges as a pivotal theme in harnessing the true capability & capacity of an organization. Beyond a mere moral imperative, gender diversity is positioned as a catalyst for empathy, inclusivity, and employee development through innovation, creativity, and enduring performance within organizations.


Fostering Awareness and Acceptance: The efficacy of maintaining gender diversity is more pronounced when organizations are not just cognizant of diversity policies but willfully understand and embrace it. The pivotal foundation for this lies in organizations adopting an "employee-first" culture, which fosters an environment conducive to its flourishing. It necessitates robust communication strategies, awareness programs, and continuous education to empower individuals with the understanding and appreciation of diverse perspectives.




Meet The Thought Leader




Karan is a mentor at GGI. After he graduated out of IIT Madras he worked at Dalberg as an analyst. Later on he went to MIT as a research assistant. He is now working in CEO's office at SaaS Labs.












Meet The Authors (GGI Fellows)




Abhay is the Founder of Livit Co-living, a venture he founded in February 2021 after securing the largest pre-seed investment (~$1M) for an asset-light operator in the Indian Coliving Industry. Before Livit, his journey included managing a Commercial Real Estate portfolio worth 2500 crores and spearheading the co-living vertical at Knight Frank India. He is also a TEDx speaker and is very passionate about travel, singing, and football.







Supradeepth is currently working as a Senior Business Analyst at Swiggy and specializes in the field of Product Analytics. He holds a Bachelor's degree(B.Tech) from VIT where he got introduced to the field of Management consulting & Product Management through his mentors during his tenure at IEEE & NSS. In his leisure, he enjoys playing chess & piano, swimming, singing & dancing.







Muskan, a graduate from Gargi College, possesses a strong academic foundation and a particular affinity for the intricacies of finance. Beyond her scholastic pursuits, she finds solace in the world of music, showcasing a multifaceted personality. With a deep interest in geopolitics, Muskan's intellectual curiosity extends beyond conventional boundaries, making her a versatile and forward-thinking individual.







Anshula, a diligent PhD candidate in Medicinal Biochemistry at Case Western Reserve University, specializes in groundbreaking research on neurodegenerative diseases. Her proficiency extends to end-to-end synthesis, purification optimization, and data analysis for clinical trials. Anshula's commitment to applying strategic thinking, problem-solving, and data analysis positions her to someday make a significant impact in policy advising in global health. When not working she enjoys her time volunteering at animal shelters, teaching underprivileged kids, dancing and traveling to a country a year.



If you are interested in applying to GGI's Impact Fellowship program, you can access our application link here.


 

Reference:


1. How diversity, equity, and inclusion (DE&I) matter | McKinsey 2. Women's workforce representation surges to nearly 50%: Report - The Economic Times 3. Female labor force participation rate vs. GDP per capita - Our World in Data 4. Growing Economies Through Gender Parity 5. Encouraging Participation of Women In STEM - The Economic Times 6. Female labour participation declining in India: Why are women not working? 7. Women in the Workplace 2023 report | McKinsey 8. (PDF) Problems Faced by Working Women in India: An Obstacle for Women Work Participation 9. Adobe’s FY2021 Diversity & Inclusion Year in Review 10.Adobe Diversity & Inclusion Year In Review 2021 11.Women’s health | Adobe Benefits 12.Hiding in plain sight: The health care gender toll 13.India's tech industry needs to offer ‘hybrid model’ to retain women employees: Survey | Mint 14.To Raise Productivity, Let More Employees Work from Home 15.Work life balance for women | Deloitte Insights 16.Gender Diversity and Leadership on Corporate Boards – IMF Finance & Development Magazine | March 2019 17.How Indra Nooyi Turned Design Thinking Into Strategy: An Interview with PepsiCo’s CEO 18.How Patagonia Created One of the Most Generous Family Policies in the World | Convene 19.Womenomics Is Pushing Abenomics Forward / The Government of Japan - JapanGov










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