Narrowing the Gender Gap is Good for Business

The pay gap between male and female workers in New Zealand is at 9.2%. For advocates of equality, the good news is that in 2018 female salaries increased at a faster rate.

In neighboring Australia, the gap is higher at 14.1%. It means that on average women earn AUD 239 per week less than men. In the state of Western Australia, the gender pay gap is a massive 26%.

It is a significant issue of ethics and social equity. But it will also impact the business bottom line, according to new research from Accenture.

The report Getting to Equal 2019 identified a fact which almost everyone knows. It is that a workplace culture of equality is a powerful multiplier of innovation and growth.

Gender pay equality is only one measure of workplace equality, but it is a key one.

Remuneration is one of the most potent motivators. If it is inequitable, then it undermines the commitment of the underpaid. It also creates tensions with others on higher pay. When most of those employees are men, polarization is worse.

Equality Drives Innovation

The Accenture report identified the idea of innovation as a business driver. In 2019, it is an important measure of business success.

In companies with a robust culture of equality, employees and their willingness to work and ability to innovate is nearly five times higher than in the least equal companies.

Accenture’s research is based on a survey of more than 18,000 professionals in 27 countries, a study of more than 150 C-suite executives in eight countries and a model that combines employee survey results with published labor force data.

The 2019 research found that an empowering environment is by far the most important of the three culture-of-equality categories. They include an Empowering Environment (one that trusts employees, respects individuals and offers freedom to be creative and to train and work flexibly), Bold Leadership (a diverse leadership team that sets, shares and measures equality targets openly), and Comprehensive Action (policies and practices that are family-friendly, support all genders and are bias-free in attracting and retaining people).

Eight of the ten strongest factors underpinning innovation are about empowerment. The foremost are issues of training, workplace flexibility, and creative freedom.

C-Suite and Employee Disconnect

The research also identified a concerning gap between C-suite executives and employees. It seems that while executives drink the kool-aid, their employees most often pass.

While 76% of executives globally said they empower employees to innovate, only 42% of employees agree.

Executives are overestimating financial rewards and underestimating purpose as motivations for employees to innovate.

If all organizations can create an environment in which 40 identified factors were commonly implemented to drive gender equality, Accenture said women would be four times more likely to reach senior manager and director levels.

Globally, for every 100 male managers, there could be up to 84 female managers, compared with the current ratio of 100 to 34.

Women’s pay could increase by 51%, or up to an additional USD 30,000 per woman each year. Globally, that equates to a lift in women’s earnings of USD 2.9 trillion.

The opportunity is enormous: Accenture calculates that global gross domestic product would increase by up to USD 8 trillion over ten years if the innovation mindset in all countries were raised by 10 percent.

If companies can get this right, then the future might not be quite as bleak as it might seem.