According to research conducted by both Catalyst and McKinsey & Company, businesses with gender diversity in their senior management have a higher return on investment than companies with few or no women.
Gender Balance Makes Good Business Sense
Companies with more women on their boards outperformed rivals, with a 42% higher return on sales, 53% higher return on equity, and a 66% higher return on invested capital.
The London Business School put out a report stating that productivity increases when teams have a 50/50 split between men and women because a diversity of opinion creates better decision-making and counters groupthink.
The Cost of Opting Out
Still, despite meaningful progress in recruiting women at the analyst and associate level, many women are failing to advance to senior management positions within their companies.
One factor impeding women’s ascent to the top of the company is the time away from work that starting a family often necessitates.
Two Harvard economists calculated the average financial penalty for those who had taken 18 months off and then returned to work. The most penalized were those in the Financial Services industry.
Rebecca Patterson, Chief Markets Strategist for the global Institutional arm of J.P. Morgan Asset Management said, “We’re in the financial industry – and what gets attention is the P&L – the business case. For every woman you lose at the 3-year analyst level, the company loses $250,000.”
Nearly four in ten highly qualified women report that they have left work voluntarily at some point in their careers. Among women who have children, that statistic rises to 43%. It is too costly to business to risk the loss of such valuable manpower. Companies must implement policies focused on the retention of its women workers by being open to support and not penalize the non-traditional arc of many women’s career paths.
It is good for women and good for business.