Women’s Day 2023: SMEs should embrace gender parity for a competitive edge

Research has shown teams with a diverse mix of gender, race and age are more innovative and creative. (Image: Unsplash)

On Women’s Day, here is an idea to ensure gender parity at the workplace. Large companies and governments have failed to take advantage of this, hence the opportunity is ripe for the taking by smart small and medium enterprises owners.

There is growing evidence that gender parity can have a positive impact on business performance. A McKinsey study found that companies with a higher proportion of women in leadership positions tend to have better financial performance. Specifically, companies in the top quartile for gender diversity in their executive teams were 21 percent more likely to have above-average profitability than those in the bottom quartile.

Research has also shown that teams with a more diverse mix of gender, as well as other characteristics such as race and age, tend to be more innovative and creative.

Indian SMEs can make use of the amazing diversity the country has to offer and not get distracted by the narrative of political parties.

Companies with more equitable and inclusive workplaces tend to have higher levels of employee engagement and retention. When employees feel they are being treated fairly and have opportunities for growth and advancement regardless of their gender, they are more likely to be satisfied with their work and stay with the company longer.

India has fallen to the 140th position (among 156 countries) in the World Economic Forum (WEF) Global Gender Gap index, with only 23 percent of women in the workforce post Covid. This offers an opportunity to SMEs that face issues of talent shortage, retention, and growth.

While many global companies are gradually improving gender parity at the top, there are some that have achieved full gender parity in their leadership. These examples could help motivate SMEs to embark on this journey.

Sodexo, a French multinational food services and facilities management company, has achieved gender parity in its board of directors and executive committee.

In 2016, it became the first company in the world to be certified for gender parity by the EDGE (Economic Dividends for Gender Equality) assessment.

Cosmetics giant L'Oreal is another company where there is gender parity in leadership. As of 2021, women made up 47 percent of L'Oreal's board of directors, and 50 percent of its executive committee.

Accenture, Schneider, and Royal Bank of Canada (RBC) are others that have seen significant improvement in gender parity.

Women make up 40 percent of RBC's board and 45 percent of its executive leadership. In Accenture, women comprise 43 percent of the board and 31 percent of the executive leadership team. Its India CEO is also a woman. Schneider Electric, too, has similar statistics of gender parity.

Here are some strategies gleaned from the leading lights that an SME can adopt to improve its competitiveness by embracing gender parity:

1 Set clear goals and metrics: SME owners should set clear goals and metrics for improving gender parity, and track their progress against these goals. For instance, set a goal that women will comprise at least 20 percent of the leadership within the next three years, and encourage more women to apply for all open positions. Similarly, HR can have a target that at least a third of its team will be women.

2 Review and revise policies: This is to ensure that they are inclusive and equitable, and might include policies around recruitment, performance evaluation, promotion, and pay parity. For example, an SME might revise its job descriptions to remove any gender bias and ensure that the language is gender-neutral.

3 Provide training and education: SMEs are known to have fewer resources for this, but they should provide training and education to employees on issues related to gender parity such as unconscious bias, inclusive leadership, and diversity and inclusion. This can include workshops, seminars or online training modules.

4 Offer flexible work arrangements: Start offering flexible work arrangements such as flexible hours, remote work options and job sharing to accommodate the needs of all employees, including those with caregiving responsibilities. This can help reduce the gender gap in workforce participation and retention.

5 Implement diversity and inclusion initiatives: SMEs should consider such initiatives as employee resource groups, mentorship programmes and unconscious bias training to foster a more inclusive workplace culture.

6 Use gender quotas and targets: Some companies have successfully used gender quotas and targets to improve gender parity. Quotas can be used to ensure that a certain percentage of leadership positions are held by women and targets can be used to encourage the recruitment and promotion of women.

7 Introduce pay parity: This is to attract the best female talent. Given that this gap is stark in India, one way to attract the right talent will be to offer pay parity with men holding similar positions. This can also be used to build the employer’s brand.