Big Economic Boost From More Women Leaders

Big Economic Boost From More Women Leaders

Getting more women into leadership roles could boost the economy by almost $900 million, according to new research commissioned by Westpac.

The research, conducted for Westpac by Deloitte, shows women hold just 29% of management roles in New Zealand businesses and increasing this to 50% could grow the economy by $881 million.

Westpac NZ Chief Executive, David McLean said the analysis, which was based on a survey of businesses alongside new economic modelling, showed the need for New Zealand businesses to improve their performance on diversity.

“The research shows having more women in decision-making roles has clear benefits – for workers, for companies and for the economy as a whole.

“This is not a ‘nice to have’. I’d argue gender parity is a common sense priority for businesses wanting to boost the diversity of thought, experience and skills in their organisation. All these things lead to better business performance.”

Based on the responses of 500 businesses, the report looked at attitudes to gender diversity and attitudes holding companies back.

Mr McLean said the research showed many businesses were making encouraging moves, but there was plenty more nearly all businesses - including Westpac - could do.

“Almost half of respondents said levels of women in management had increased in the past two years, which is great. On the other hand, 9% believed they would never achieve parity in leadership. That seems quite incredible.

“It was interesting that just under half of the respondents said a lack of female talent, either in the workforce or internally, was a barrier to parity.

“That flies in the face of statistics that, for example, show women are now earning tertiary qualifications at a higher rate than men, and suggests an element of unconscious and even conscious bias in decisions around hiring and promotion.”

Among the report’s conclusions was a recommendation that businesses should have a gender policy, and measure its outcomes. However the report found only 40% of businesses had a policy in place and just 26% of those businesses reported on outcomes.

“That’s the crucial part – in any business you have to track your performance. As the old adage goes, ‘what gets measured gets managed,” said Mr McLean.

Deloitte also recommended that gender diversity initiatives should be well resourced and supported from the top, but only 7% of businesses had budget dedicated to diversity initiatives.

Mr McLean said the suggested economic benefits of more women in leadership, which would arise through increased participation in the workforce, were only part of the story.

“Certainly at Westpac, we want to create the sort of workplace where every employee thrives and feels valued, and the only way to do that is to foster a sense of inclusiveness.”

Measuring its own workforce against the survey criteria in the report, Westpac NZ found women held 47 per cent of management roles[1].

“We still have lots of areas to work on and this report is a useful contribution to our own work at Westpac and hopefully for other businesses as well,” said Mr McLean.

Key findings

• Women make up 47% of New Zealand’s workforce, but businesses report women fill just 29% of their management roles.

• An increase in women in leadership would (1) create more role models and (2) boost the availability of flexible working arrangements. Both factors would drive greater workforce participation, resulting in benefits of $881 million to the economy.

• One in four businesses do not expect to reach gender balance in leadership (meaning 40%-60% of roles held by women) in the next five years, with 9% believing they will never achieve it.

• 73% of women (vs 64% of men) say it’s important for men to be involved in gender diversity initiatives.

• 49% of respondents say lack of female talent is the primary barrier to gender parity.

• 40% of businesses have a gender policy in place and 26% measure performance or progress.

• The main priority identified for achieving gender parity in leadership by businesses is the availability of affordable childcare. 27% of respondents cited this factor.

• Each 1% increase in female managers increases an organisation’s return on assets by 0.07%. For a business valued at $10m this would mean an extra $150,000 revenue a year.

Scope of research

• Deloitte surveyed 500 business leaders in New Zealand in September 2017.

• It also used economic modelling to estimate the benefits of increased diversity.

• The sample group is representative of all industries and regions in New Zealand.

• The survey was completed by employees at a managerial level in businesses with five or more employees. Each business was asked 30 questions.

• The report defined “senior leadership” as chief executives, key management personnel, other executives/general managers, senior managers and other managers.

NOTES

[1] A separate long-standing internal measure puts Westpac NZ slightly higher at 52 per cent. However this is based on a wider definition which includes some lower level managers with direct reports, as well as some influential senior roles that don’t directly manage staff.

ENDS

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