More women in labour force could add billions to GDP
Women in labour force – One of the largest, most comprehensive studies of its kind to ever take place in Canada found that narrowing gender gaps at work and in society can potentially add billions of dollars to the country’s economic growth. Women’s inequality is a pressing human issue that also has significant ramifications for jobs, productivity, GDP growth, and inequality.
McKinsey Global Institute (MGI), the research arm of McKinsey & Co., released the results of a new study analyzing women’s equality in Canada. The research looks at the potential benefits of ‘tackling remaining gender inequality at the national, provincial, territorial and municipal levels’, and found that Canada could add $150 billion to its GDP by 2026 by adding more women to high-productivity sectors such as technology, raising women’s participation in the labour force, and increasing women’s working hours.
According to the report, this figure is equivalent to adding a new financial services sector to the economy. Each province stands to gain between 0.4 and 0.9 percent each year, with the most potential growth in British Columbia, Ontario, Prince Edward Island, and Quebec.
The study ‘The Power of Parity: Advancing Women’s Equality in Canada’, sizes the economic potential of greater gender equality, maps the existing gender gaps, and analyzes results from their new workplace survey.
“Canada is among the global leaders on gender equality, but its progress has stalled over the past 20 years, especially in the workplace. For instance, women’s representation in the labour force, in high-quality STEM occupations, in management, and among business owners has either improved minimally or not improved at all. At current rates, these gender gaps would take three decades to almost two centuries to close,” says Andrew Pickersgill, Managing Partner, McKinsey & Company Canada.
“Narrowing gender gaps at work and in society is a $150 billion opportunity and one of the biggest levers of growth that Canada has today.”
Achieving this economic opportunity would require Canada to add more women to high-productivity sectors like technology and raise women’s participation in the labour force, each of which would account for 42 percent of the impact. Another 16 percent would come from increasing women’s working hours.
MGI and McKinsey Canada found that the gender gaps are most significant in seven indicators: women represent 35 percent of managerial positions; 28 percent of science, technology, engineering, and mathematics (STEM) graduates; 23 percent of STEM workers; 20 percent of small business owners; and 29 percent of elected officials; but they take on 64 percent of unpaid care work in the home and represent 80 percent of single parents. Results are largely homogeneous across provinces and cities, pointing to common priority areas for action for the nation and for organizations.
Although 53 percent of the degree holders in Canada are female, women are a minority of corporate leaders. The workplace survey of 69 Canadian companies representing more than 500,000 employees sheds light on the barriers women face in the workplace. It found that women make up approximately 45 percent of all entry-level employees but only 25 percent of vice presidents and 15 percent of CEOs. At almost every stage of the pipeline, women’s likelihood of being promoted to the next level is smaller than men’s. The first bottleneck for female advancement appears to occur between the entry and manager levels, and the second between director and vice president levels where men advance three times more than women do. The loss of female talent along the pipeline is not due to lack of ambition or higher attrition – women aspire to promotions at a similar rate and actually leave at a lower rate than their male counterparts.
However, the data do suggest that women lack the same opportunities as men. Women predominantly occupy staff positions that provide fewer paths to leadership. They are also half as likely as men to have had a senior leader support their promotion.
“This research highlights best practices in Canadian companies that others can emulate. But initiatives need to be implemented holistically and effectively, and measures to tackle gender imbalance in companies only work if they are considered to be a true business imperative. Changing attitudes takes time, and persistence is vital,” says Sandrine Devillard, a Senior Partner in McKinsey’s Montreal office.
Gender equality in work is linked with gender equality in society – the former is not possible without the latter. To progress on the latter, all stakeholders, including government, corporations, not-for-profit organizations, educational institutions, media, and individuals, could undertake a portfolio of initiatives in five priority areas for action in Canada: removing barriers against women entering STEM fields; enabling more women to be entrepreneurs; reducing gender inequalities in child care and unpaid care work; amplifying women’s voice in politics; and reducing gender bias and reshaping social norms. Engaging men as well as women and collaborating across organizations and sectors to tackle entrenched attitudes will be one of the most difficult but critical keys to success, ensuring Canada’s continued position as a global leader on women’s equality.
You can download the full report at http://www.mckinsey.com/global-themes/women-matter/the-power-of-parity-advancing-womens-equality-in-canada