Companies that hire more diversity, including women, achieve between 24 and 25 percent higher returns on investment.
“Having women in upper-level management positions and on your board of directors makes a difference in your business bottom line,” Pam Bucy, Montana Labor and Industry commissioner, told board members of the Montana Equal Pay Equal Work Task Force on Wednesday at Fairmont Hot Springs Resort.
Corporations that attract, retain and advance women employees can reap the benefits of greater economic gains over competitors, according to Catalyst Information Center.
The study shows that companies with more women board directors “outperformed those with the least” number in three financial categories: a 53-percent return on equity, a 42-percent higher return on sales and a 66-percent return on invested capital.
“There is a wealth of data out there now that demonstrates that those businesses – mostly studies on Fortune 500 businesses – that every single time there are more women in high-level positions and on boards of directors at a higher extent,” added Bucy. “Those businesses have 24-to-35 percent bigger returns on investment, generally.”
It is imperative that employers incorporate more women in the work force in coming years because Montana faces a momentous work shortage, she said.
“We are facing this very significant worker shortage everywhere,” said Bucy. “In the next four years, we’ll have 137,000 people who are going to retire in Montana. We have 113,000 19-to-24 year olds to fill those slots. So we will, in the next four years, have a very significant worker shortage.”
The task force’s goal, then, is to educate businesses on improving the labor force by hiring more women.
“One of the biggest ways to increase labor force participation is by getting more women into the work force,” Bucy said.
So why should business owners care about anything other than their profit margin?
“Everyone thinks it’s the right, moral thing to do, but we need to message to them that their businesses will suffer when they don’t,” she added.
In other words, gender diversity improves business.
Money plus women makes the world go ‘round, said Sheila Hogan, state Department of Administration director.
“And when women have more money in their pocket, they spend it on Main Street,” said Hogan. “Nationwide, women comprise 80 percent of the “purchasers.”
Women buy everyday basics like food, shoes and orthodontia for their children.
Hogan added: “More money in their pocket means more money circulating in the economy."
Board members include small business owners like Deb Larson of Interior Environments, Inc., and a Business and Professional Women chapter in Bozeman and Montana State University President Waded Cruzado.
Cruzado hopes MSU-Bozeman will again host the Pay Equity for Equal Work Summit next spring.
Bucy said the task force has made much progress since its inception two years ago.
For instance, MSU psychology professor Jessi L. Smith, a national pay equity expert, helped the task force convince males in Montana leadership positions to hire women administrators in formerly male-dominate departments, such as the state Department of Military Affairs.
Brigadier General Matt Quinn of Military Affairs recently went against the stereotypical grain and hired two women in state leadership roles, praised Bucy and Hogan.
“Quinn was open to the process,” added Hogan.
The task force has raised awareness about women’s pay equity, too, of course, across the board.
“We have done some pretty incredible things,” Bucy said.