Workers in an office, in a file image.Wavebreakmedia (Getty Images/iStockphoto)
Diversity in the workforce is profitable. A study by BlackRock, the world’s largest fund manager, shows that companies with a gender-balanced workforce achieve better results. “A first look at the connection between the representation of women and company performance shows that diversity is more important than the proportion of women or men,” says the analysis published on Thursday. These more balanced companies outperformed their less diverse peers by up to 1.6 percentage points annually in return on capital employed (RoA) between 2013 and 2022.
The study, “Improving Financial Performance by Investing in Women,” brings together information from 1,250 large companies, making it one of the largest yet developed to examine this phenomenon. Their main conclusion is: “The more balanced the company’s workforce, the higher the return on investment.” He also emphasizes that “a diverse workforce at all levels is important for financial performance.”
The researchers explain that companies with a lower proportion of women (average 16%) and those with a higher proportion (average 60%) perform worse than those with a balanced ratio. The best returns occur in equilibrium. It should be noted that, according to the results of this analysis, profitability is slightly higher in female-dominated companies than in male-dominated ones. These diverse corporate profits are higher in Europe (2.1%) and North America (1.5%) than in Asian markets (0.2% in Japan).
“The proportion of women,” the study continues, “is more equal among entry-level professionals, but this balance deteriorates with increasing seniority.” According to this study, only 18% of management positions were in 2021 and only 6% in 2022. of CEO positions filled with women. This underrepresentation of women in positions of highest responsibility occurs in all industries.
“Women also tend to be well represented in lower-level and less specialized roles, such as administrative work,” BlackRock adds. The study shows that companies with a high proportion of women in middle management perform “better” than those with the most unbalanced representation. Furthermore, this is also a problem looming for such companies: “We found a negative relationship between this level of misalignment in female representation at different levels and future return on investment.”
On the other hand, promoting more women contributes to better staff turnover: “We estimate that an improvement in the underrepresentation of women in senior ranks of about five percentage points is associated with a 3.6% decrease in promotion rates. The turnover the following year and 4.6% “% two years later.” This analysis shows that over the past decade, companies with women as CEOs have almost consistently performed better (by one percentage point on average) than companies with women CEOs men were led.
According to the BlackRock study, women are well represented in sectors such as healthcare (52%) and finance (49%), while they are far less represented in technology, industry and construction. By country, the study highlights that “the vast majority of countries have achieved that women make up at least 40% of the workforce, but there are significant differences across regions and countries.” North Africa, the Middle East and India are areas with low rates Participation of women in the labor market.
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