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Commentary & Analysis

Want Higher Profits? Hire More Women

Research consistently shows that companies with gender-diverse leadership teams have significantly higher profits than those that don’t. The reason? Different approaches to hiring, problem-solving, and relationship-building, all of which have positive benefits on the bottom line.

By Heidi Tolliver-Walker
Published: December 20, 2018

I’ll be honest. When it comes to the gender discussion, I’m tuned out. I’ve always felt that men and women complemented each other in personal life and in business, and that’s enough for me. As for deeper discussion, it’s not something I’ve felt called to engage in. That’s why this particular topic surprised me—it grabbed me.

I was interviewing the female CEO of a thriving print company, and in discussing how her gender influenced her leadership, she commented that studies show that having a diverse leadership team actually result in a higher bottom line. Studies showed that? Really? You’ve got numbers? I looked it up, and it’s true.

A study by DDI, for example, found that when women hold at least 30% of leadership roles, organizations are 1.4 times more likely to have sustained, profitable growth. According to an article in Fortune written by Tacy Byham, CEO of DDI, gender plays a particularly key role in the following areas:

  1. Hiring and promotion decisions
  2. Tendency to seek out overlooked talent
  3. Building knowledge through mentoring
  4. Seeking “out of comfort zone” opportunities
  5. Incorporation of more diverse perspectives

Writes Byham:

Take women’s beauty manufacturer L'Oréal. They added two more women to their board of directors in 2016, bringing the percentage of females on their board to 47%. Their 2017 annual report cited a sharp increase in net income—up 15.3% over the previous year. Is this a coincidence?

But it’s not just DDI. A 2014 study from Gallup showed that, in a retail setting, for example, gender-diverse business units have 14% higher average comparable revenue than less diverse business units (5.24% vs. 4.58%). In the hospitality setting, gender-diverse business units have 19% higher average quarterly net profit ($16,296 vs. $13,702) than less diverse business units.

Catalyst reports even higher numbers. As reported by Caroline Turner, principal of DifferenceWORKS, which helps companies improve bottom-line profits by creating a more diverse workforce, writing in the Huffington Post, “Catalyst research shows that companies with a higher percentage of women in executive positions have a 34% higher total return to shareholders than those that do not. Another Catalyst study found that companies with the most women directors outperform those with the least on return on invested capital by 26%.”

I could go on, but you get the idea. It doesn’t matter where you pull the research, it shows the same pattern: gender diversity has a positive impact on the bottom line.

At a time when we’re all looking for those hidden ways to boost profitability, this is a big one. Want to increase your revenues? Ensure you have diversity on your leadership team and throughout your company. It’s not a woman thing. It’s a numbers thing.

Heidi Tolliver-Walker Heidi is an industry analyst specializing in digital, one-to-one, personalized URL, and Web-to-print applications. Her Marketer’s Primer Series, availalbe through Digital Printing Reports, includes “Digital Printing: Transforming Business and Marketing Models,” 1:1 (Personalized) Printing: Boosting Profits Through Relevance,” “Personalized URLs: Beyond the Hype,” and “Web-to-Print: Transforming Document Management and Marketing.”

 

Discussion

By Robert Godwin on Dec 20, 2018

"Want Higher Profits? Higher More Women"
Kneed I say more?

 

By Susan Kinney on Dec 20, 2018

Good article!

 

By Jennifer Matt on Dec 20, 2018

The best headline of the year for WhatTheyThink *by far).

 

By HARVEY LEVENSON on Dec 20, 2018

This article significantly supports and enhances the credibility of the recent postings on the benefits of gender equity, and it includes numbers! Kudos to WTT for posting this as a lead story. I recommend that companies and associations having boards take heed, and pursue an upward spiral of improvement.

 

By Barbara Childers on Dec 20, 2018

Were you intentionally trying to be punny with your headline?

 

By Howard Owen on Jan 09, 2019

In 32 years gender/race have never been a factor at my business. When the issue received some attention last fall we did an audit - as owner I'm the only caucasian male, women outnumber men two to one, and half of our leadership are women. Diversity that occurs by hiring the best person for the job is the best kind.

 

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