As of 2021, there are 41 women CEOs on the Fortune 500 list. That’s more than there have been at any other point in the index’s 67-year history. In fact, there were no women CEOs at all at Fortune 500 companies until 1972 (17 years after the list was first created). As such, the latest figures are a huge indicator of how far the business sector has come in terms of diversity and inclusion.
But they’re also a sign of how much work we still need to do, as female CEOs only account for 8.1% of the business leaders on the list.
In this article, we’ll look at the advantages of promoting women in business, the challenges women leaders face in the workplace, and how business owners can empower their female employees to help foster the next generation of women CEOs.
Advantages of a diverse workforce
● Diverse teams are more innovative. Studies show that diversity in the workplace – whether it’s gender diversity, age diversity, racial diversity, etc. – leads to an increase in creativity and innovation. Just like people from different generations and cultures, men and women have vastly different experiences, which influence the way they do business. Diverse teams are more creative and innovative as they have the benefit of multiple perspectives when it comes to idea generation.
● Women score more highly in emotional intelligence tests. There’s an increasing demand for workers with soft skills (e.g., communication, empathy, and self-awareness) in today’s employment market. In fact, 92% of talent acquisition specialists who took part in LinkedIn’s 2019 Global Talent Trends survey stated that soft skills are more important when hiring than hard skills. This is because future hires can be trained on the technical aspects of their job, but soft skills can’t always be taught.
Research carried out by Hay Group shows that women score more highly than men in 11 out of 12 key emotional intelligence competencies. Women are more self-aware, empathetic, and adaptable, and they handle conflict better than men. These are the kinds of skills that make women effective leaders in business.
● Women have first-hand consumer insights. It’s estimated that women account for 85% of all consumer purchases in the US, from buying homes and cars to paying for food, holidays, and healthcare. But only 11% of creative directors in advertising are women. This divide has led to women consumers feeling misunderstood and undervalued by the marketplace. To build better customer relationships, it’s crucial for businesses to be gender diverse at an executive level.
Gender-diverse businesses are 15% more likely to perform above the industry median in terms of profit.
Challenges faced by women in business today
● Women are still underrepresented in STEM industries. Thanks to organizations like Girls Who Code, Women in STEM, and the National Girls Collaborative Project, the number of women working in science, technology, engineering, and math related roles is growing. However, these industries continue to be heavily dominated by men. Women account for only 24% of STEM professionals in the US – and less than 15% in the UK.
As STEM occupations are some of the fastest growing and highest paying jobs, it’s crucial that girls feel empowered, and that women have the same opportunities to pursue a career in STEM as men.
● Persistent gender bias. Whether as a result of conscious or unconscious biases, women still face discrimination in the workplace. Underlying gender biases lead to the same behaviors and characteristics in women (e.g., initiative, passion, and authority) being perceived differently than in men. For example, leaders who are men might be called “assertive”, while women leaders are called “bossy” – a word which carries negative associations.
● Lack of transparency regarding pay. In the EU in 2019, women’s gross hourly earnings were an average of 14.1% less than those of their equivalent male colleagues. Some theories suggest that this disparity in wages is related to the fact that women are less likely to ask for higher pay than men.
In a recent survey on salary negotiation, Glassdoor revealed that 68% of women accepted the first salary they were offered compared to almost 50% of men, who negotiated before accepting the role.
Once in a job, joint research carried out by Cass Business School, the University of Warwick, and the University of Wisconsin reveals that women are just as likely to ask for a pay rise as men. They are 25% less likely to receive one, however.
Tackling gender bias is one way to help close the gender pay gap, as challenging negative assumptions about assertive women can encourage the confidence to demand a fairer wage. Greater transparency where pay is concerned also helps to eradicate wage gaps, as women become aware of the difference and refuse to accept lower pay than men in the same roles.
4 ways to empower women in the workplace
1. Connect women with female mentors. Having a strong female role model in business can help empower women employees and give them the confidence to put themselves forward for promotions.
2. Create a workplace culture that champions diversity & inclusion. Look at your mission statement, organize and implement diversity and inclusion training, and create discussion groups specifically for women to amplify their voices within your organization.
3. Be accommodating. Offer flexible working solutions to parents, e.g., later starts and earlier finishes, to allow them to drop off or pick up their children from school.
4. Get involved with projects aimed at women in underrepresented spaces. For example, you could get involved with a scheme that’s designed to make STEM roles more accessible to women.
At EU Business School, we champion transformation, multiculturalism, and diversity. 100+ nationalities are represented across our campuses, and women make up 54% of our student body. In 2021, QS ranked our MBA program as #1 in Class and Faculty Diversity. Capital Magazine has listed us as the sixth best business school for female students.
We offer a range of specialist MBA courses, including International Business, Marketing, Global Banking & Finance, Entrepreneurship, and Human Resources Management. To check out the full list of courses and find out how to apply, visit our MBA programs website today.