Sodexo Study: Gender-Balanced Teams Linked to Better Business Performance

This is the seventh in a continuing blog series based on insights and findings from the Sodexo 2016 Workplace Trends Report.The Report examines nine key trends affecting business outcomes and the quality of life of employees and consumers. To learn more, access the full article: Gender-Balanced Teams Linked to Better Business Performance

Changes in automation and technology are creating new opportunities for women—and women in the workplace are creating more opportunities for their companies.

Consider these facts:

• A recent McKinsey report found that companies with the highest number of women in top management had the best performance, with a 41% higher return on equity than the average. However, in the U.S. today, only 24 women lead Fortune 500 companies

• Women account for 45% of the S&P 500 labor force, but still only represent about 25% of executive/senior-level officials and managers, 19% of board seats, and 4% of CEOs

And there’s more:

• Women comprise more than 50% of the consumer market worldwide
• Women hold more degrees than men in many fields

Sandrine Devillard, Global Leader of the McKinsey Women Initiative, Head of Paris Offices, reports, “By the year 2020, we will need nearly 40 million people with higher education in the global economy. If women were to work at the same level as men and stay in the labor force, this talent pool would close more than half of this gap.”

Since Sodexo operates in 80 countries, we wanted to better understand and leverage this trend and initiated an internal study of 100 global entities and 50,000 employees in 80 countries. The study explored the correlation between gender-balanced teams and performance—both financial and nonfinancial.

Balance is the Key

The study is based on the premise that gender balance affects performance only when the optimal balance is reached. The results clearly confirm that this balance corresponds to a male-female ratio between 40% and 60%, reinforcing that no one gender is better than the other; rather, diversity is key to enhanced performance.

This is significant because Sodexo found that the management teams that fit within this gender balance “zone” generate, on average, results that are more sustained and predictable than those of teams with less than 40% or more than 60% of either gender. The results indicate that the benefits of gender-balanced teams go even further. They achieved, on average:

• A four-point higher global engagement rate compared to other management groups
• A five-point increase in brand image
• A 12% increase in client retention; positive organic growth, growth profit and operating profit over three consecutive years

Organizations that seek to promote the advancement of women often face attrition among women in leadership positions; the higher one goes up into the organization, the fewer women there are. Researchers call it the “leaky pipeline” and explain that the issue is not about getting women into top positions, but about creating an inclusive culture free of biases to allow everyone to reach their full potential. Based on the data from the study, it’s clear that organizations can benefit significantly from ensuring all team members have that opportunity and fully contribute to the success of the enterprise. This can be supported through educational opportunities via tuition reimbursement as well as mentoring and sponsorship initiatives.

As Sodexo CEO Michel Landel said, “Our commitment to gender balance pushes us in the right direction, fortifies our pipeline of female managers and leads to more steady, predictable and sustainable growth and productivity. In this landmark year where we approach our goal of 25% of women in our top 300 leadership positions, this study reinforces our efforts to become an even more inclusive company.”

I explore this topic in more depth in the 2016 Workplace Trends Report. I hope our findings help companies recognize the competitive advantage of balanced gender leadership.

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Rohini Anand, Ph.D. is Senior Vice President Corporate Responsibility and Global Chief Diversity Officer for Sodexo. She is responsible for the strategic direction, implementation and alignment of Sodexo’s integrated global diversity and inclusion initiatives, as well as Sodexo’s sustainable development, corporate social responsibility and wellness strategies. Dr. Anand is considered a pioneer and subject matter expert on organizational change and diversity and inclusion, she has authored several articles and has been published in numerous trade journals.