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Harness the potential of your female workforce

Women in Work Index: Canadian insights


Gender parity at all levels in the workplace improves profitability, workplace culture and the economy as a whole. By closing the wage gap and increasing female workforce participation, Canada will likely see a CA$92 billion increase in female earnings and CA$105 billion in GDP growth, respectively. 

Our Women in Work Index is a weighted average of five measures that reflect female economic empowerment, including the equality of earnings, the ability of women to access employment opportunities and job security. The results show Canada is holding steady in eighth position out of 33 countries. While the progress Canadian businesses have made is impressive, there’s room for improvement, including increasing awareness of the pay gap, encouraging mentorship opportunities and offering supportive policies and working arrangements. 

 

 

Canada in context

Trending strong

Female labour force participation

74%

OECD average: 68%

Canada has strong labour force participation, above the OECD average of 68%

Gap between male and female labour force participation

7%

OECD average: 12%

The gap in labour force participation has been declining since 2000 but stayed constant between 2013 and 2014

Female unemployment rate

6%

OECD average: 9%

Female unemployment remained roughly constant on average with a slight decrease since 2000


Room for improvement

Full-time employment rate

73%

OECD average: 75%

The percentage of women in full-time employment is below the OECD average and has stayed flat since 2000

Gender wage gap

19%

OECD average: 17%

Canada ranks 25th out of 33 countries, showing room for improvement in closing the gap

Female boardroom membership

19%

ranked 14th out of 33

Canada’s 11% away from the federal government’s corporate target of 30% by 2019


 

 

Separation between male and female wages in Canada

19%

OECD average: 17%

The average man in Canada's workforce make 19% more than the average Canadian woman.

$81 vs $100

OECD average: $83 vs $100

In Canada, women are paid $81 for every $100 their male counterparts earn. 

 

 

What actions can Canadian businesses take to uncover the potential of their workforce and help women advance their careers?

Close the gender wage gap

The gender pay gap remains wide, and closing it should be a priority for businesses and governments across Canada. In Canada, women are paid $81 for every $100 their male counterparts earn, around $2 less than the OECD average. Canada reduced its gender wage gap from 24% in 2000 to 19% in 2013, and it remained the same in 2014.

Benefits of parity

Closing this wage gap will not only deliver a significant increase in overall female labour earnings, but it will also benefit Canada’s economy. Increasing female workers’ pay to be on par with that of their male colleagues would increase total female earnings by an estimated CA$92 billion.*

Next steps

Awareness and transparency

  • Assess the breadth of your gap
  • Identify areas for improvement
  • Benchmark your workforce’s diversity metrics to similar organizations
  • Raise awareness of unconscious biases
  • Report annually on progress against diversity targets

Supportive policies and programs

  • Make senior executives accountable for gender diversity
  • Assess performance and compensation policies to make sure all employees are paid fairly
  • Monitor progress of hitting diversity targets the same way as financial ones
  • Tie executive compensation to reaching diversity targets

* We consider the potential increase to total female earnings from completely closing the gender wage gap such that the average annual earnings for women is equal to the average annual earnings for men. This allows us to calculate the average male and female earnings from data on total male and female earnings.

Increase female workplace participation

Gender diversity is vital for businesses, enabling employees to turn differences in thought, behaviour, knowledge and talent into innovative practices that can drive an organization forward. Female and male economic participation rates reflect society’s education levels, workplace conditions and cultural attitudes outside the office.

In Canada, the gap in workforce participation between men and women fell from 12% in 2000 to 7% in 2014. The overall participation of women in the workforce was at 74% in 2014, up from 70% in 2000 and above the OECD average of 68%. Despite that, full-time female employment has remained steady at 73% since 2000. On the other hand, female unemployment (6%) has decreased slightly since 2000 as Canada saw a reduction of 1% from 2000 to 2014. 

Benefits of parity

International Monetary Fund staff analysis reported that higher female participation “has a strong impact on productivity growth.”1 For Canada, increasing the female employment rate to match that of Sweden—a consistently high performer in the index—could result in a GDP boost of 4.9%, equivalent to more than CA$105 billion. Across the OECD, the long-term gains from equal employment rates are estimated to be more than US$5 trillion.

Next steps

Supportive policies and programs

  • Enhance flexible working opportunities
  • Encourage men to take parental leave
  • Provide parental support to new parents (e.g. child care subsidies or services) 
  • Support women returning to work post-parental leave

Sponsorships and mentorships

  • Support women’s career advancement with sponsorship and mentoring opportunities by senior leaders
  • Establish programs to identify and nurture potential leaders

1. International Monetary Fund. May 9, 2016. Canada: Staff concluding statement of the 2016 Article IV mission. Link Retrieved August 9, 2016.

Improve female leadership representation

Achieving gender balance on boards is an economic imperative, but Canada lags behind other developed nations. As it stands, Canada is at 19% female boardroom representation in 2015, up from 13% in 2014. A report by the federal government’s Advisory Council recommended a target of 30% for corporations by 2019.

With Canada ranking 14th out of 33 OECD countries, we should look at what other territories are doing to improve. For example, some countries have specific boardroom membership targets for women, such as Norway (40%), France (40%), Belgium (33%) and Italy (33%). And in the United Kingdom, Her Majesty’s Treasury released a voluntary charter2 early in 2016 to get the financial services sector to increase the number of women in senior positions. The charter—which organizations see more as a requirement—expects firms that sign up to link senior executives’ remuneration with “delivery against internal targets on gender diversity.” It’s only a matter of time before similar pledges arrive in Canada.

Benefits of parity

Research by Catalyst reveals that Fortune 500 companies with the highest percentages of female directors on their boards reported a 53% higher return on equity (ROE) than others3. Credit Suisse also reported that the average ROE of companies with at least one female board member was 14%4, three percentage points higher than those with no women at all. Career advancement relies on targeted practices, supportive programs and strong mentors to help shatter the glass ceiling. Data is starting to show that when there are more women in senior leadership positions, more women see a path to executive roles.

Next steps

Awareness and transparency

  • Recognize unconscious bias at the leadership level
  • Encourage dialogue for gender diversity in the boardroom

Sponsorships and mentorships

  • Align leaders to drive a positive influence and set a consistent tone from the top
  • Recognize talent on an ongoing basis and identify future leaders for accelerated development
  • Hold senior executives accountable for getting women in leadership

2. HM Treasury. July 28, 2016. Women in finance charter: A pledge for gender balance across financial services. Link Retrieved August 9, 2016.

3. Status of Women Canada. June 2014. Good for business: A plan to promote the participation of more women on Canadian boards. Link Retrieved August 9, 2016.

4. Credit Suisse. September 23, 2014. Press release: Companies with higher female participation at Board level or in top management exhibit higher returns, higher valuations and higher payout ratios, according to a report by Credit Suisse Research Institute. Link Retrieved August 9, 2016.

 

 

 

 

Percentage of female boardroom members in Canada

Current

2015: 19% 

of all corporate board members in Canada were female

Target

2019: 30%

the Government of Canada’s Advisory Council has set a target of 30% women across all corporate boards by 2019

Where do you stand?

For organizations and national economies, not prioritizing gender equality is a missed opportunity. Our research shows diversity in the workforce has an impact on the bottom line when companies close the wage gap, increase full-time female participation rates and improve leadership representation. As well, governments around the world have begun to introduce diversity targets and regulations like the United Kingdom’s Women in Finance Charter, so there’s growing incentive to prepare for change.

 

 

Take the following steps to help realize the full potential of your female workforce:

Gain insight with analytics: Benchmark your organization’s workforce metrics, such as pay, recruitment targets, team composition and promotion times. Once you know where you stand, establish a vision, set ambitious goals and engage employees. Continuously improve your efforts over the long term.

Adjust your people strategy: Address the unconscious biases people at the company may hold and find opportunities to improve recruitment, succession planning and promotion practices. Make sure leaders are accountable for gender diversity. As well, adopt flexible working opportunities and parental support services to help retain talent.

Recognize success:
Treat workforce goals as you would financial goals. This means connecting leaders’ performance bonuses with reaching parity targets to help reinforce the behaviours that will drive success.

Contact us

Karen Forward
Partner, People and Organization
Tel: +1 416 687 8116
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Bill McLean
Partner
Tel: +1 416 869 2323
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Baya Benouniche
Partner
Tel: +1 514 205 5409
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