The Strategic Benefits of Women in Leadership

The benefits of a more diverse and inclusive leadership team can be found in so many facets of working life, but how is that actually reflected in data? We looked at our database of employee engagement statistics to find out more.

We often think of diversity as a modern subject for discourse, but lack of representation dates back to the foundational texts of the Western canon. Mary Beard, the acclaimed professor of classics, takes issue with Homer on that front. She notes that "The Odyssey" contains the “first recorded example of a man telling a woman … that her voice was not to be heard in public."

But that was 3,000 years ago—where do we stand now? While we’re continually making progress in terms of belonging and diversity, there’s still plenty of work to be done. We hear women’s voices louder and clearer than ever, but without representation on leadership teams, women in the workplace may still struggle to be heard.

As workplaces push towards greater board room and managerial diversity, we wanted to analyse the impact such decisions are having, using the data found in our employee voice platform.

We work with hundreds of organizations around the world to gather employee feedback, analyzing the results to help them measure and improve employee engagement. When we delve into our dataset, we’re able to see exactly how workplaces differ depending on leadership composition. The results provide clarity on why diversity is so important.

Our Investigation Into Women in Leadership

We took a confidential subset of our data spanning almost 60,000 employees under 3,000 managers. Forty-three countries are represented in the data, with the majority of respondents being from the UK and U.S.

From this dataset, we wanted to see how companies with better female representation in leadership positions differed from those with higher male representation. We defined “female-led” companies as those with greater than 50% female representation in management, and “male-led” as those with less than 50%.

The leadership distribution by gender across organizations in our dataset is, as you might expect, imbalanced. This is broadly reflective of workplaces in general, so that’s not surprising. In our data, 37% of executive positions are filled by women, and 84% of companies have less than 50% female representation in leadership. As we said previously, there’s still plenty of work to be done.

Employees at Women-Led Businesses Display Greater Faith in Their Organization

Our employee engagement data is measured using 45 core driver and sub-driver questions—and usually we don’t find a huge difference between male-led and female-led companies. However, during this investigation we found a substantial difference when we looked at the answers to four specific questions as compared with male-led companies.

Employees at female-led companies, regardless of gender, consistently report having a stronger belief in their company and its strategy compared to those at male-led companies:

  • “I’m inspired by the purpose and mission of our organization.” +0.8
  • “How likely is it you would recommend [Company Name] products or services to friends and family?” +0.6
  • “Our organization does a good job of communicating the goals and strategies set by senior leadership.” +0.6
  • “The overall business goals and strategies set by senior leadership are taking [Company Name] in the right direction.” +0.3

What each of the drivers above points towards is greater employee engagement as a result of stronger communication. Employees better understand the overall mission of the business, and therefore feel more inspired by that mission, and more likely to take pride in sharing their work with others.

It’s important to note that communication in this instance doesn’t refer to informing employees about the organization’s mission statement. Instead, it refers to engaging with employees at every level of the business, and ensuring they have an active say in the direction the company is taking.

While we can’t draw definitive conclusions about exactly how workplaces may evolve as diversity is addressed, these results form the start of a discussion about how diverse leadership can be positively transformative to all.

“Net Promoter Score has been around for a while, and eNPS has rapidly become the go-to measurement for determining levels of employee engagement. This is live, real-time feedback and it’s great for understanding what’s going on and being able to take relevant action quickly.”

Ieva Zeromskaite Data Scientist at Workday

Diversity Beyond Gender

When we hear about the call for greater diversity in leadership, we often talk about the negative effects of a homogenous, insular “echo chamber” within leadership positions, or the cost of attrition when a talented employee hits the glass ceiling and leaves.

However, data like this can help demonstrate the actual value of diversity in the workplace, both in terms of employee engagement and impact on business outcomes.

Our study focuses on the impact of gender diversity, but we should acknowledge that true diversity also encompasses race, sexuality, economic background, physical and cognitive differences, as well as a broader consideration of gender beyond the two homogenous groups. It’s important to take this on board as we move forward to inspire the finest work from everyone in the workplace.

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