The ethical argument for workforce gender equity has long been evident. Now, importantly, the commercial argument appears to strongly support the case for a more even workforce gender balance.
Firstly, we do not identify as diversity specialists. Nor is this a diversity piece. This is a workforce efficiency and productivity piece. Workforce gender balance simply happens to be our basis for discussion.
Data indicates that the majority of workforces across industries and organisations in Australia are still male gender biased. Across the entire Australian workforce, as at Feb 2016, men comprised 53.8% and women 46.2% (WGEA, April 2016). This is particularly prevalent in leadership roles. Women comprise just 15.4% of CEOs and only 27.4% of key management personnel (WGEA Feb 2016). Whilst in many cases, there are valid circumstances leading to this imbalance, the fact remains that across the board a general imbalance exists regardless of reasons.
In contrast, there are certain professions that observe a higher instance of female workforce representation – nursing and education are two that spring to mind. There are also numerous organisations who have a strong gender ratio in favour of women. In these instances, the question has to be asked; if a male gender dominated workforce presents challenges, do corresponding challenges exist for female gender dominated workforces? That said, is there in fact an optimal gender balance for maximised business performance?
Data in support of increasing male representation in the workforce is virtually non-existent. Given male gender ratios across the majority of organisations, this is logical – why would we invest in this when it doesn’t address the challenges faced by most organisations? Trying to prove (using facts and data) that a female gender imbalance is equally as challenging as a male imbalance is a difficult task. There simply isn’t the data to do so. In the spirit of genuine equality, shouldn’t we consider the impacts excessive female representation may have?
Valuable research emerging from the Amsterdam School of Economics, University of Amsterdam addresses this very topic and helps provide some clarity over possible changes in business performance resulting from gender composition shifts. In their 2011 report detailing an experiment conducted across the 2008-2009 academic year, authors Hoogendoorn, Oosterbeek & Praag investigated the impact of gender diversity on the performance of business teams. The full study can be found here.
The experiment was organised in collaboration with the Junior Achievement Youth Enterprise Start-Up Program – the leading post-secondary entrepreneurship education program in the U.S. Teams of students each took responsibility for a small sized, short time business from its set up at the beginning of the tertiary year, to its liquidation at the end of tertiary year. 550 students across 45 teams participated with varying gender balances within each team. Students sold stock, elected officers, divided tasks, produced and marketed products or services, built relationships, created processes, kept records and conducted meetings in order to achieve their common goal. The businesses created as part of the experiment were real ventures – this was not a business simulation exercise. Students reported regularly to a professor, business coach and accountant and were required to make tax and social security payments.
The critical finding of the experiment states that given a low share of women in a team, team performance (measured according to sales & profit) improved when the share of women increased up to approximately 55%. Beyond that percentage, further increases in the share of women tended to reduce team performance. Based on the results of the experiment, the study showed an optimum gender balance (for maximised business results) of approximately 55% female to 45% male.
The results of the experiment are both interesting and pleasing from a gender equality perspective. On one hand, in line with the vast array of data readily available, findings indicate that when female representation in teams is low, increases in female representation have a direct and positive impact on business performance. Furthermore, data shows that an over representation of either gender (outside the realms of 55% female to 45% male) is likely to result in diminished performance.
Opportunities arising from this research are potentially significant. Imagine if we told you (as an organisation) that you could realise bottom line improvements in business results and performance simply by optimising your gender balance! In the modern environment of closely monitored productivity, finely tuned operational efficiency and Lean Agile thinking, is that something you might be interested in? It is highly likely that pulling the gender balance optimisation lever is an opportunity many organisations are missing. We work so hard on optimising business processes, squeezing assets for every last drop of productivity and continually striving to do more with less, yet it remains possible that simply striving for a healthier gender balance (something most acknowledge we should be doing in any case) could be further aiding operational improvement.
Many industries and organisations differ in terms of their degree of influence over gender balance. Various factors including nature of work, talent pools and tertiary representation can influence the gender composition within organisations. We are not suggesting it is appropriate for every organisation to shift gender balance to the optimum ratio as suggested by Hoogendoorn et al. It is however interesting to observe the impacts that gender balance optimisation can have on business performance.
The body of work completed by Hoogendoorn et al is detailed, rigorous and robust. It is however only a single study. Based on the findings, immense opportunities to conduct further research in this space exist to better inform potential for operational efficiency gains based on gender balance.