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diversity as a competitive advantage for companies

Updated: Nov 9, 2022

Numerous studies show that companies run by women are more profitable. Diversity, especially on the management level, improves the working atmosphere, employee satisfaction, innovation potential and is good for the employer brand. Even during the crisis, female managers' decisions were rated better on average than those of their male counterparts. Sound like excellent reasons for companies to advocate for more diversity in the workplace, right?

diversity and inclusion
diversity as a competitive advantage

gender parity in leadership

Only 14 (!) of the 192 board members of publicly listed companies in Austria are women. What's more, the proportion of female members on management level in Austrian companies has only increased by a few percentage points in recent years.

If we stick to this pace, we will only achieve equality for women in just under a quarter of a century.

However, Austria is by no means the exception here. Even on an international level, only around 30% of all management positions are held by women.

is it a talent pipeline problem? yes…. but not only!

Indeed, some industries do not have enough female talents to meet the demand. And of course not every employee or worker wants to take on a leadership role.

However, the fact of the matter remains that it's 2021, and our system is still putting women at a disadvantage and closing doors for female talents. There are many reasons for this, such as the allocation of positions in one's own unofficial (male-dominated) network, stereotypical thinking (unconscious bias), a proven confidence gap among women and much more.

Women do better when it comes to leadership capabilities, but we are culturally shaped by patriarchal structures, which is why we need to rethink the picture of the classical leader.

diversity as a competitive advantage

The higher ratio of women at the leadership level, as well as the active approach of female talents who can take over seats in the future, represents an immense competitive advantage for companies. Especially in the millennial age group, a diverse (leadership) team and female role models within the company play a decisive role in the choice of employer. This goes hand in hand with the desire for career advancement, development opportunities and a work-life balance.

diversity and inclusion
how does diversity influence decision-making

what can companies do to close this leadership gap?

Some European countries are already playing a pioneering role by proving that a mandatory quota at board level can create a snowball effect throughout the company.

Even if there is no mandatory quota, diversity must be strategically anchored in the company in order to achieve real results. What's needed is the buy-in from the entire management level, setting diversity goals as actual business goals, as well as clear guidelines and consequences in the event of non-compliance.

Women must be given opportunities so that they can prove themselves and thus have a positive effect on the next generation.

Deriving from the goals, it's all about the establishment of a family-friendly corporate culture, targeted development opportunities for young female executives, and transparency when it comes the status quo of diversity numbers relative to the desired goals.

Diversity concerns us all. And only if companies and decision-makers start to prioritise it, we will see the change needed.

Are you eager to be at the forefront of inclusive workplaces? Download our free D&I whitepaper including an extensive checklist, supporting you in getting closer to your D&I goals.


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