Are we actually going backwards? The percentage of women in the global labour market actually went down in 2020. Women in work seems to be trending the wrong way, as we can see when we look at data on the website Catalyst.
Here are some key stats
– Less than half (46.9%) of all women participated in the labour force, a decrease from 51.0% in 1990.
– Women represented 38.8% of all participants in the labour force
– One study of employment and income trends in six countries (China, Italy, Japan, South Korea, the United Kingdom, and the United States) found that women are 24% more likely to permanently lose their jobs compared to men
Women in work in the UK
A parliamentary study in 2020 also highlighted that despite significant changes in the labour market we still saw structural differences based on gender
– The female employment rate reached a record high of 72.4% in October-December 2019. The male employment rate was 80.6%.
– 9.31 million women were working full-time, while 6.30 million were working part-time. 40% of women in employment were working part-time compared to 13% of men.
– Median weekly pay for female full-time employees was £528 at April 2019, compared to £628 for male full-time employees
– 17% of small and medium-sized enterprises (SMEs) in the UK with employees were led by women in 2015.
– In June 2019, 29% of directors of FTSE100 companies were women. In the FTSE250 (the next largest 250 listed companies outside the FTSE100), 27% of directors were women
Women in Work – in the EU
If you have never ventured there before then I advise you to take a look at Eurostat. It is a fantastic resource for business planning. With regards to our current topic of Women in Work they also have some great data on differentials across the EU.
Lets put some of those into the context of overall demography. In 2019 the ratio across the EU27 was 51% women to 49% men (229 million to 218 million).
If we look at the employment rates for the labour market (i.e. those people aged between 20 and 64) we can see that while 78.3% of men were in work that drops to 66.5% for women – that’s a percentage point (p.p) difference of 11.8.
What is really interesting is that is far from uniform across the EU – “In 2018, the lowest gap was reported in Lithuania (2.3 p.p.), followed by Finland (3.7 p.p.), Latvia and Sweden (both 4.2 p.p.). These four were the only EU Member States with a gender employment gap not exceeding 5 p.p. At the other end of the scale, six Member States recorded a gap above 15 p.p., namely Czechia (15.2 p.p.), Hungary (15.3 p.p.), Romania (18.3 p.p.), Italy (19.8 p.p.), Greece (21.0 p.p.), and Malta (21.9 p.p.).” – Eurostat
If we move on to look at earnings in the EU then we see similar structural differences. The aggregate difference across the whole bloc is a 14.1% undershoot for female pay compared to male when looking at gross hourly earnings in 2019
We can also see that this difference varies considerably as this chart below shows.
Breaking down the differences
We have looked at big data sets but there are more interesting and nuanced numbers that can help inform our understanding of women in work.
Eurostat usefully slice the data in two other interesting ways. They look at the difference between the private and public sector by country and it doesn’t look good for the private sector as the graph below shows.
There are various reasons put forward as to why this may be but the most likely seems to be that the public sector is more unionised and thus governed by collective agreements that would apply to all employees equally, where this is much less likely to be the case in the private sector.
What you do makes a difference
Eurostat then also looked at how the sector you work in affects the gender pay difference, as shown below.
The finance and insurance sector comes of very badly in this comparison. It is also interesting to note that the water supply industry comes off best – this may of course be more to do with the public v. private differential noted above – but in many cases in this sector the gap is actually reversed.
Why Women in Work is important
There is a pretty obvious headline statement to make here. Why would any economy want a situation where it was not performing at its best? By not fixing issues in the labour market any economy is going to be delivering a below par performance.
As it goes for economies so it goes for companies – if a company sits on a situation in which it is not deriving the most from its human resources, for curious structural and societal reasons, then it is doing a considerable disservice to its shareholders.
Women in work and the wider economy
There have been many studies about how gender differences can negatively impact the health and performance of a nation and the world’s economy. The OECD summarised those in a 4-page document. It also references SIGI (Social Institutions and Gender Index) which tracks the discriminatory performance of institutions in 160 countries – you can look at your own country’s performance here.
The key take outs from that OECD report are:
– The current level of discrimination is estimated to induce a loss of up to USD 12 trillion or 16% of global income.
– Gender-based discrimination in social institutions hampers a country’s income by lowering female access to education and jobs and reducing production factor productivity.
– A world free of discriminatory social institutions could generate substantial macroeconomic gains benefiting all.
Women in work and the company
The discussion on the level of the economy seems remote and in our everyday lives we should be looking to fix the things that we can control. For business leaders – this is at the level of our companies.
We can look at this in 4 key areas of our businesses
– Financial Performance
– A report in Organisation Studies in 2019 makes it clear that “Companies with higher levels of gender diversity and with HR policies and practices that focus on gender diversity are linked to lower levels of employee turnover” So you get less churn and you keep the valued employees you want to – which leader wouldn’t want that?
– Perry and Li in their report in 2020 make the case that organisations with a healthy climate of diversity increase job satisfaction and employee commitment. It is clear that where you feel your organisation is committed to diversity, you would feel increasing engagement and commitment
– Diverse management teams are innovative and earn a premium for their innovation. According to one recent study, over a period of three years companies with higher diversity in management earned 38% more of their revenues, on average, from innovative products and services than those companies with lower diversity. What’s not to like about that?
– Diversity is a key ingredient for better decision-making among teams. Homogenous groups may be susceptible to groupthink, while diverse teams can leverage a greater variety of perspectives and are likely to consider information more thoroughly and accurately. You can easily envisage how groups who are not diverse sink into a pit of shared constructs and thus imagine that therefore everyone else shares these constructs – therein lies the problem with social media!
– Inclusion boosts reputation – simple as that. Research by the International Labour Organization states that “Organizations with inclusive business cultures and practices are 57.8% more likely to improve their reputation”
– A mixed-gender board is simply and literally good for business:
– Adding women to a board can improve investment efficiency and prevent risky overinvestment decisions – see Asian Business & Management
– Fewer financial reporting mistakes and controversial business practices such as fraud – see Journal of Business Ethics
– Companies with gender-diverse management teams experience fewer operations-related lawsuits. – see Journal of Accounting and Economics
The three sectors above are all going to boost your bottom line. Though it can be tricky to prove causality between improved performance and diversity, the points made above would undoubtedly feed through into improved business performance.
Perhaps a better argument would be to ask how do all male boards or keeping the status-quo improve the bottom line!
To me it is pretty clear that if you narrow your talent pool by only picking people like you then you are not acting in your business’ best interests. You are cutting your business off form a supply of talent that could make all the difference to your company succeeding or not.
Women in Work – next steps
At UKCE we are launching a scholarship programme for women English language learners to help them into employment. The We Can Do It programme offers scholarships to women aged between 22 and 30 and who have been out of paid employment for 3 months or more, to enable them to afford courses that will help with their path into the labour market.
If we all, as business leaders, start by taking small actions today the cumulative effect of those actions will be a fuller and richer tomorrow for everyone.