The Business of Feminism and Why it’s Good for Your Bottom Line
Stacey Sheppard is a freelance writer, blogger and founder of The Tribe - A Women’s co-working space and community based in Totnes, Devon. She’s also Mum to two young girls and a kick-ass feminist! We asked Stacey to give us her thoughts on why feminism is good for businesses.
Feminism has a bad reputation. The concept has evolved enormously since the term was first coined in 1837 by the utopian, socialist, French philosopher Charles Fourier. And, we’ve been through many waves of feminism including Marxist Feminism, Liberal Feminism, Cultural Feminism, Radical Feminism and more recently, Intersectional Feminism.
What is Feminism?
The main reason feminism has a bad rep is because it is often misunderstood. Some people see feminists as crazy man-haters who want nothing more than to tear down the patriarchal system to replace it with a matriarchy. But this is simply not the case.
Whilst the various forms of the feminist movement all have slightly different perspectives, feminism can generally be defined as the advocacy of women’s social, economic and political rights to achieve true gender equality. If we break this down further and ask what gender equality is, we can say equal respect, rights and opportunities for everyone, regardless of gender identity.
When we look at it through this lens, we can quite clearly see that the work of feminism is still a long way from over. Women continue to face significant economic, social and cultural barriers that prevent them from attaining equality.
Closing the Gend Pay Gap
According to The World Economic Forum’s Global Gender Gap Report, in 2022 the global gender gap had been closed by 68.1%, which seems like a marked improvement. However, at the current rate of progress, it will take another 132 years to reach full parity, which will take us to the year 2154. So not so great after all.
When it comes to the workplace, we are still far from reaching gender parity and the data shows that there remains a very persistent set of socio-economic barriers that keep women out of the workforce altogether or stuck in the lower echelons of management.
According to the Women in the Workplace 2022 report by McKinsey and LeanIn, for every 100 men who are promoted from entry-level positions to management roles, only 87 women are promoted. The same report states that only one in four C-suite leaders is a woman, and only one in 20 is a woman of colour.
The gender pay gap is still going strong too. According to the Office for National Statistics, the gender pay gap in the UK among full-time employees increased to 8.3%, up from 7.7% in 2021.
But it’s not only in employment that we see this disparity in gender equality. Even in entrepreneurship we see a drastic under-representation of women. According to the NatWest Rose Review, only 6% of UK women run their own business and only 1 in 3 UK entrepreneurs identifies as female.
The 2023 Rose Review progress report did show some positive moves in the right direction. In 2022, women in the UK established over 150,000 new companies – more than twice as many as in 2018, before the Rose Review was launched. However, this does come off the back of a global Pandemic in which unemployment levels for women in the UK increased by 28% and redundancy levels rose by 212% from January-March 2020 to October-December 2020. This represented a huge setback for women and begs the question of how many of those women turned to entrepreneurship through necessity.
There are some other small signs of progress too, like the fact that The Fortune 500 crossed a milestone in 2023 when, for the first time in history, women ran more than 10% of the businesses on the list of America’s largest public companies. Likewise, in July 2022, 39.6% of FTSE 100 directorships and 38.9% of FTSE 250 directorships were held by women.
Progress is being made in forward-thinking organisations where initiatives such as the equal salary certification is being awarded and progressive work is being led by Dark Matter Labs to create equitable, company-wide pay structures.
But overall, a lot remains to be done and we have to ask ourselves why the business case for gender equality in the workplace seems to be so sorely overlooked. There are so many benefits to having more women in the workforce and especially in management and C-suite positions that it’s hard to understand why businesses aren’t making this a priority.
Let’s take a look specifically at what those benefits are.
What are the benefits of Gender Equality in Business?
Economic Growth
Economies in which more women work report more growth. Gender equality has been shown to have strong, positive impacts on Gross Domestic Product (GDP) per capita which grow over time. By 2050, improving gender equality would lead to an increase in EU GDP per capita of 6.1 to 9.6%, which amounts to €1.95 to €3.15 trillion. In EU countries with more room to improve gender equality this could increase GDP per capita by as much as 12%.
There are also economic benefits to encouraging female entrepreneurship. The Rose Review found that £250 billion of economic value could be added to the UK economy if women were to start and grow businesses at the same rate as UK men.
Data from the OECD also shows that women’s economic participation is beneficial for society as it speeds up development, helps overcome poverty and reduces inequalities. This is because women typically invest a higher proportion of their earnings in their families and communities than men.
Increased Organisational Effectiveness
In companies where there are increased employment and leadership opportunities for women, there are tangible benefits for those organisations. A study by the International Labour Organisation in 2018 found that enterprises experience improved business outcomes resulting from greater gender diversity. Of those surveyed 57.4 per cent said that initiatives to promote gender equality had helped enhance their business outcomes.
These better business outcomes showed up in various ways:
better profitability and productivity (60.2%)
increased ability to attract and retain talent (56.8%)
greater creativity, innovation and openness (54.4%)
enterprise reputation had been enhanced (54.1%)
better able to gauge consumer interest and demand (36.5%)
However, the study found that the degree of gender diversity in management and the seniority of management are inversely proportionate. This means that there are less women present in senior positions. It also found that the bigger the company the less likely it is to have a female CEO. The same was found for the chairperson of the board of directors with only 23.6% having a female at the helm.
Better Gender Diversity
Companies with female CEOs or female board chairs are not only more likely to employ women but they are also 12% more likely to have women as senior general managers. This is a strong indication of the “pull factor” meaning that more women attracts more women and therefore leads to higher levels of gender diversity in business.
Improved Innovation
Women make up just over half the population, control 40% of wealth globally and directly make or influence up to 80% of all purchasing decisions. This means that they are extremely well-placed to understand market needs and spot new market opportunities, particularly the unmet needs of women. After all, you can only truly address a market need if you understand the demographics of that market. Having a gender-balanced team allows businesses to unlock the innovation that drives market growth.
Increased Corporate Social Responsibility
A study published in the journal Frontiers in Psychology in 2023 looked at gender differences in professional social responsibility. The relation between professional women and collective or organisational responsibility has been widely studied and evidence suggests that companies with women on their boards of directors have higher levels of Corporate Social Responsibility.
The results found that the greater commitment to Corporate Social Responsibility of companies with women on their boards of directors is due, in part, to the greater individual or personal social responsibility of women. This not only results in better decision-making but also benefits the company in terms of its financial results and brand reputation.
Increased Social Value
When it comes to entrepreneurship, a further study published in Science Direct in 2023 looked at gender differences in social entrepreneurship and the results confirmed that women are more motivated by the social goals inherent in social entrepreneurship and are therefore more likely to set up a social enterprise bringing benefits to both people and planet.
Transformation Opposed to Risk
Research suggests that female executives are more open to challenging the status quo and less likely to care about tradition. This makes them more open to change. Women typically tend to be more risk-averse than men, which can be a barrier to entrepreneurship according to The Rose Review. But Harvard Business Review found that when more women join the C-suite it can have a positive impact by making the entire team less comfortable with risk-taking.
Effective Leadership Skills
Women tend to bring very different leadership skills and competencies to the table. A 2016 study by Korn Ferry found that women more effectively employ the emotional and social competencies correlated with effective leadership and management than men. Women score higher than men on nearly all emotional intelligence competencies including emotional self-awareness, empathy, conflict management, adaptability, and teamwork, which are all essential for workplace leadership.
The research therefore suggests a strong correlation between high emotional intelligence and those leaders who deliver better business results, demonstrating a clear need for more women in leadership roles.
The business case is clear and the data supports it, gender balance is good for the bottom line. Businesses that embrace gender diversity gain a competitive edge by tapping into new markets, increasing innovation, attracting and retaining a more diverse workforce, increasing corporate social responsibility and enhancing brand reputation, as well as maximising profitability.
“Businesses that embrace feminism benefit workers, employers, society and the economy. It’s about time we stop overlooking women’s leadership potential and start recognising the enormous untapped value that they bring to business and the bottom line.”