In my last Reflection, I wrote about the importance of the ‘S’ in environmental, social and governance (ESG) and how employee welfare and development benefits African companies. This Reflection builds on the ‘S’ by focusing on how gender diversity creates value for individual companies.
The COVID-19 pandemic is disproportionately affecting women and girls. The limited gains that have been made in recent years on gender equality within Africa’s business sector are at risk and the patriarchal systems that restrict women’s economic empowerment could be strengthened.
Economic Impact of COVID-19 on Women
Women are overrepresented in lower-skilled and lower-paid jobs in precarious employment types (short-term, part-time and the informal sector).
Globally, 31 million out of the 44 million workers in vulnerable sectors that could lose their jobs will be women.
After Ebola women found it harder to regain employment and their position as unpaid caregivers was reinforced.
Increasing the number of women in good quality jobs will take time and it will require a commitment from governments, business leaders and society more broadly. African companies can respond by stepping up to address this challenge and scaling up their efforts on gender diversity.
Investing in women as employees at all levels to establish a level playing field is not only the right thing to do, but it can also benefit a company’s bottom line and drive growth. McKinsey’s Women Matter: Africa (2016) report found that African companies with at least a quarter share of women on their boards achieved 20% higher earnings before taxes and interest.
Here are five ways that gender diversity has created value for African companies:
01 — Actively recruiting women increases the talent pool. Particularly in STEM focused sectors, women remain an untapped resource of skills and knowledge and adding more women to the workforce creates value in terms of diversity of opinions, experience and expertise. For example, Safaricom’s Women in Technology programme targets high-school students and graduates to help bridge the gender gap in the technology sector, ultimately increasing the number of talented individuals available to their company.
02 — Hiring more women ensures that a company’s workforce is representative of its customer base. Women influence roughly $15 trillion of global consumer spending and can, therefore, offer unique insights into how products and services can better serve their needs. For example, Lighting Africa Kenya, an off-grid renewable initiative by the World Bank, found that at the household level 80% of their customers were women, and through a team of 400 female staff Lighting Africa Kenya has been able to identify their needs and expand this market.
03 — Women employees can provide greater access to last-mile consumers. For example, the International Finance Corporation (IFC) and the microfinance institution FINCA in the Democratic Republic of Congo developed a network of online agents to provide FINCA’s banking services to low-income customers. They found that women agents were more likely to be located in communities that lacked basic banking services and were, therefore, more successful than male agents in helping FINCA to connect with prospective customers, recording on average 12% more transactions a month and 16% higher net profits.
04 — Ensuring that both women and men have equal access to training helps companies utilise their existing talent and can lead to savings in recruitment costs. For example, Finlays Horticulture in Kenya ensures that training is available for both women and men at all levels of the company. This has provided Finlays with a larger pool of skilled and motivated workers who can be promoted through the company ranks. Between 2010 and 2012, the company estimates that the internal promotion of 69 women resulted in savings of KES 17 million (approx. US$200,000) in relation to advertising costs, training and lost productivity.
05 — Initiatives, such as providing childcare support, can improve the attendance and retention rates of women employees. For example, Red Lands Roses, a floriculture business in Kenya, found that women’s unplanned leave declined by 25% and productivity improved within one year of opening childcare facilities.
Promoting gender diversity can not only create value for individual companies, but it will also have wide-reaching benefits for society. On average, women invest 90% of their income back into their families, compared to 35% for men. Therefore, financially empowered women are more likely to invest in their children’s education, health and nutrition — improving the prospects of future generations. It is both the right thing to do for the continent’s sustainable future and it makes good business sense.