Geographies in Depth

There’s a sweet spot for gender diversity in the workplace, finds BlackRock – get it right and you’ll outperform your peers

Silhouette of woman.

According to BlackRock's report, companies that fall in the middle range, with neither the highest nor lowest proportion of women, tend to achieve the best performance. Image: Unsplash/johnwolf3

Victoria Masterson
Senior Writer, Forum Agenda
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Education, Gender and Work

  • Investing in women and workforce diversity boosts company performance, finds a new report from BlackRock.
  • Firms with gender diversity at all levels outperformed less diverse companies by an average of 1.2% between 2011 and 2022, the study finds.
  • Improving access to affordable childcare and better parental leave are policies that can help women get into work, the World Economic Forum says.

Having a diverse workforce is good for a company’s bottom line, a new report suggests.

In its paper, Lifting Global Growth by Investing in Women, asset management firm BlackRock finds that greater gender diversity can boost company performance and economic output.

The paper uses data on women in the workplace to set out its evidence, as this is the most available data on workforce diversity.

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Women in the workplace – the sweet spot

Employing a high percentage of women isn’t what boosts your business performance.

In fact, BlackRock’s report shows that it’s companies in the middle – those who neither have the highest or lowest percentage of women – who perform best.

This ‘sweet spot’ shows that it’s diversity that counts, rather than the prevalence of women or men, the firm says.

Companies with the most diverse workforces outperformed those with the least diverse workforces by an average of 29% a year between 2013 and 2022, the research finds.

Diverse workforces can boost economic output by tapping into different perspectives, experiences and underused talents, BlackRock says.

Charts illustrating the average returns on assets with representation of women in the workforce.
Companies with a balance of men and women outperform their peers, the data suggests. Image: BlackRock

Countries have different levels of women in the workforce

Women globally are almost level with men in terms of their participation in the workforce, BlackRock finds.

At least 40% of women in most countries go to work.

But regions and countries show “significant disparities”. Women are a very low proportion of the workforce in some large emerging markets, especially the Middle East, North Africa, South Asia and Latin America. Women make up only 23% of the total labour force in India, for example.

Charts illustrating the average RoA for the current year, for companies in the MSCI World Index split into quintiles by women representation in workforce a year prior.
Gender diverse workplaces perform better. Image: BlackRock

Hire women at all levels

Employing women and diverse workers at all levels of an organization is key to improving financial performance, BlackRock’s data shows.

Typically more women work in clerical roles and fewer work in senior and managerial roles.

But firms with workforce diversity at all levels outperformed less diverse companies by an average of 1.2% between 2011 and 2022.

European and North American organizations outperform most in this measure, by 2.1% and 1.5% respectively.

Asian markets show the smallest degrees of outperformance, including 0.2% in Japan.

Charts illustrating the women over- (under-) representation measure defined as the difference in women’s representation in specific role and women’s representation among all employees.
Fewer women typically work in more senior roles. Image: BlackRock

Women CEOs lead outperforming companies

Women lead only 6% of the world’s biggest corporations in the role of chief executive officer (CEO).

Yet companies with women CEOs have “almost consistently” outperformed companies run by men over the past decade, BlackRock says.

Women CEOs are more prevalent in some countries than others. Finland, Norway, Sweden and Singapore have the highest percentage of women CEOs, while Spain, Italy and Israel have none. In the US, 7% of companies had women CEOs in 2022.

Charts illustrating the percentage of companies with female CEOs at the end of 2022 fiscal year.
Nordic countries have the most women chief executives. Image: BlackRock

Women and diversity drive global growth

When millions of women and girls lose out on economic access and opportunity, it has “wide-ranging consequences” for the global economy, the World Economic Forum says in its Global Gender Gap Report 2023.

Improving access to affordable childcare, better parental leave policies and supporting the care economy are the kinds of government policies that can help women get into work, it says.

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What's the World Economic Forum doing about the gender gap?

To improve workforce diversity, some governments are also taking more gender equal approach in areas including pay equity, health and safety standards and preventing harassment and sexual violence at work.

A strong gender strategy is increasingly seen as “essential to attracting the best talent and ensuring long-run economic performance, resilience and survival,” the Forum says.

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