Why investing in Women bring better return

There is a growing recognition of the unique contributions that propel success when more voices — especially female voices— are at the table and are being heard.

With more women entering the workforce, companies must invest in their female employees to see more women in leadership positions and reap the rewards that come with it. The benefits of doing so are abundantly clear; studies have shown that companies with more female leaders enjoy better financial performance, higher employee satisfaction, and increased innovation.

If you're reading this, you're probably searching for insights, actions, and strategies to bring more women leaders to the table, support their leadership, and invest in their continued success. Here are several reasons why you should invest in women's leadership:

1. The value added goes far beyond gender diversity

Though the ethical argument for gender-diverse leadership is abundantly clear, the business incentive is, perhaps, just as clear. Businesses with women in leadership positions have consistently higher profit margins than those without.

McKinsey research found that companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies towards the bottom.

There have been various studies in recent years indicating that women in executive positions and on corporate boards can have a significant impact on a company's overall performance.

2. Evidence suggests women leaders are more loyal than their male counterparts

Men are praised for being ambitious. Women are too, but they prioritize job satisfaction and stability more than anything, refraining from constantly seeking out better opportunities.

As per the third edition of the Best Companies for Women in India study, women's attribution rate is considerably lower than men's at all levels in the corporate hierarchy. The report suggests that companies which invest in developing and growing women into leadership while focusing on the holistic well-being of their employees are more likely to retain their most talented employees.

3. Women leaders perform better in times of crisis and foster a more supportive, caring work environment

Earlier this year, Potential Project published its multi-year study of leaders and employees from approximately 5,000 companies in nearly 100 countries. They separated the analysis into two key character traits: wisdom, the courage to do what needs to be done, even when it is difficult, and compassion, the care and empathy shown towards others.

Very few people would disagree that both traits are crucial in leadership, but when combined, there is an exponentially higher impact on critical business metrics. For instance, employee satisfaction is 86% higher when working for a wise and compassionate leader than a leader who is neither.

When the data is assessed by gender, the differences are stark. 55% of the women in the study were ranked by their followers as being wise and compassionate, compared to only 27% of the men. Conversely, 56% of the men in our study ranked poorly on wisdom and compassion. In short, women are much better in times of crisis and foster a work culture built around support and compassion.

What's to be done about it?

Despite the business case for more women in leadership, the promotion of women into leadership roles continues to lag. However, there are numerous ways in which organizations can leverage these insights to create more beneficial outcomes for all employees.

1. Promote gender equity.

Although gains have been made in recent years, organizations still have a long way to go in supporting and promoting women - especially in the wake of Covid-19. As McKinsey describes, women face a "broken rung" at the first step up to manager. For every 100 men promoted to manager, only 86 women are promoted.

The first positive step organizations can make towards long-term gender equity is to update flexible and work-from-home arrangements that reflect and support the realities women face. Ensure these arrangements don't hinder promotions and evaluate the quality of childcare options available to all employees.

2. Give equal salary

Despite ample evidence that women leaders perform as effectively as men (if not more so), the overall gender pay gap persists, with women continuing to be over-represented in low-paying jobs and experiencing increases in wage disparity as they age.

Assessing data from the U.S. Bureau of Labor Statistics, the National Women's Law Center reports that in 2021, reveals across all occupations, women made 17% less than men, and depending on the type of occupation, as much as a 45% wage gap may exist.

These gender equality disparities increase significantly when the race is factored in. Perhaps even more concerning is the fact that the pay gap widens as women advance in their careers, which has implications for women seeking the highest-level leadership roles.

3. Learning & Development and Peer Learning.

Organizations can create learning and development programs and peer learning forums for men and women to learn more from each other on ways to do things wisely and compassionately. These development schemes and programs can help leaders from a wide range of diverse backgrounds learn from each other and create more wise, compassionate and inclusive cultures where we recognize, leverage and learn from one another's strengths.

There is a need for more wisdom and compassion from our leaders — and it's clear that women leaders are a primary source of these invaluable qualities.

Women leaders are the way forward.

The topic of whether men or women make better leaders have been long debated in the business world, but recent studies have shown time and time again that women make better leaders. Despite this, women continue to be paid less than men and have fewer leadership opportunities than men.

It is up to organizations to do all they can to support and develop our current and future women leaders. We all need them.

Let us train you.