- In a growth-challenged global economy, UBS Wealth Management's Women as a force for economic change report argues that closing the gender gap, particularly in the workplace and boardroom, is critical to boosting economic growth.
- Matching female to male labor participation rates to best-in-region levels could add USD 12 trillion to the global economy within a decade; a recent UBS study also showed that gender-diverse companies where at least 20% of leadership positions were held by women were more profitable than their less gender-diverse peers.
- The issue of the gender gap is complex and the reasons for its persistence vary around the world - they are not peculiar to any culture, region or level of economic development. But one common denominator remains – that of maternity and the domestic burden.
- Governments and corporations are key in enacting policies and promoting the right culture to addressing the gender inequality in labor market participation, pay, employment segregation and leadership positions.
- Importantly, lasting solutions will entail costs, trade-offs, and a fundamental shift in mindsets and cultural attitudes.
Zurich, 31.10.2016 – While the world struggles to find new sources of growth, one solution to reviving sputtering economies requires neither drilling nor innovation. UBS Wealth Management's Women as a force for economic change report states that, according to the McKinsey Global Institute, matching female to male participation rates at best-in-region levels could boost global GDP by 11%. But to attain sustainable progression, governments, companies and the society must take bold steps – trade-offs and costs need to be borne, and more importantly, a fundamental mindset and cultural shift is required.
Ms. Tan Min Lan, head of the APAC Chief Investment Office at UBS Wealth Management and co-author of the publication, explained that, "Despite the evidence linking gender diversity to significant gains in economic growth and company profitability, women are still largely under-represented in the workforce worldwide and continue to face daunting obstacles in corporate environments. With our Women as a force for economic change report, we seek to illuminate the challenges women face in the workforce and highlight key considerations that would enable meaningful change in our society."
UBS Wealth Management's Women as a force for economic change is the first publication of a series dedicated to addressing women and their life goals – be they related to employment, investment, philanthropy, entrepreneurship or social work. The first edition includes four interviews with leading businesswomen from across the globe – Vietnam, Japan, the UK and the US, who provide insights on the many challenges and learnings about working women in their region.
Raising awareness on gender diversity a first step
While there exists today considerable insights on gender diversity, UBS believes that many may not have seriously considered how the persistence of the gender gap – not peculiar to any culture, region or level of economic development – impacts us at different levels of society. The focus of this edition is to raise awareness about the complexity of the gender gap, the urgency in addressing it, the shortcomings of current practices, and the steps needed to prompt change at both the grassroots and the board levels.
Persistence of the gender gap
According to the OECD, only 50% of the world's women are gainfully employed, much less than 75% for men. And women still earn on average 24% less than men globally. The IMF also noted that gender gaps in the labor market have resulted in losses of up to 27% in GDP per capita in some regions.
Maternity and domestic burden are common challenges among women
Women as a force for economic change lists several challenges women face in the workforce. The one common denominator across cultures is maternity and the issue of domestic burden - the key consideration for women to either abstain from the workforce entirely or only seek part-time work. Additionally, women earn far fewer advanced degrees than men and remain under-represented in many sectors, causing an employment segregation gap; women account for just 30% of all researchers in science-related fields and 33% of IT workers.
Addressing the glass ceiling as important as increasing women labor force participation
A prominent characteristic of female labor market participation is the "glass ceiling," an intangible barrier that appears to have prevented women from rising to higher level positions. Among MSCI World Index companies, women held only 18.1% of all directorships. And although female directors have a notable lead in educational attainment over their male counterparts, male directors tend to have more "C-suite" experience, holding CEO, CFO and other chief positions, than female directors.
"The so-called glass-ceiling is still a very real barrier to women’s representation in corporate leadership. Getting more women into work is only a partial victory if they are confined to lower levels of the corporate hierarchy. Companies have to realize that there are tangible benefits to increasing gender diversity in senior positions. A recent study by UBS CIO showed that gender-diverse companies with women in at least 20% of leadership positions were more profitable than their less gender-diverse peers," said Tan.
What governments and companies can do and the cost of closing the gap
As cited in the report, governments are key to narrowing the world's gender gaps. The optimal policy mix extends to the spheres of education, family planning, and fiscal and labor policy measures, all of which should be designed to address the specific needs of each region. But meaningful gains in female workforce participation could be made today by providing adequate maternity and paternity leave, access to high-quality and subsidized childcare, and gender-related employment policies.
"Raising the participation rate of women to best-in-region levels, and paying them equally, can substantially fuel economic growth. But issues like a lack of maternity leave, limited access to quality childcare support and implicit bias are exacerbating the workforce gender divide. While some progress has been made, the persistence of the gender gap worldwide proves that urgent action is needed to prompt the necessary shift in mindsets and cultural attitudes for any real change to materialize," said Mr. Carl Berrisford, UBS Wealth Management Chief Investment Office analyst and co-author.
Links
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Further information on UBS Wealth Management's Chief Investment Office:
Notes to Editors
About UBS
UBS provides financial advice and solutions to wealthy, institutional and corporate clients worldwide, as well as private clients in Switzerland. The operational structure of the Group is comprised of our Corporate Center and five business divisions: Wealth Management, Wealth Management Americas, Personal & Corporate Banking, Asset Management and the Investment Bank. UBS's strategy builds on the strengths of all of its businesses and focuses its efforts on areas in which it excels, while seeking to capitalize on the compelling growth prospects in the businesses and regions in which it operates, in order to generate attractive and sustainable returns for its shareholders. All of its businesses are capital-efficient and benefit from a strong competitive position in their targeted markets.
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