By: Anna Onyshchenko and Sergiy Bilolypetsky
In recent years, gender equality and inclusivity have risen higher on the agenda of business leaders. But what has become a norm for international companies is still not a convincing principle for many Ukrainian companies. Especially considering COVID-19’s impact on the labour market, and on women in particular, these principles should be incorporated into Ukrainian strategic business objectives.
Both horizontal and vertical job segregation are present in the Ukrainian labour market. According to a UNDP study for Ukraine, the overall ratio of women to men occupying leading managerial positions is 40:60. However, a UN Women gender assessment shows women occupy only 18% of top management positions in large Ukrainian enterprises and 25% in medium enterprises. Transport, construction, agriculture, extraction and energy industries are particularly dominated by men (over 805). Education is the only sphere where women (69%) overrepresent men. Industries that can be considered gender balanced (45-55% of leaders are women) include hospitality, trade, health, art and entertainment.
A global survey conducted by the International Labour Organisation (ILO) in 2019 reveals that gender diversity is a smart business strategy and that gender imbalance can be a serious barrier to enhanced business performance. Across the 70 countries surveyed, over 60% of companies reported higher profitability and productivity as a result of gender diversity. Similarly, a 2015 analysis by the Council on Foreign Relations shows that gender equality is also good for economics. Closing the gender gap in the workforce by 2025 could boost global GDP by US$28 trillion and US$1.1 trillion for East Europe and Central Asia. For Ukraine alone, closing the gender gap and increasing women’s participation in the workforce would mean a 21% increase in GDP, or US$36 billion – almost a quarter of the current GDP level.
So why are Ukrainian companies lagging behind in this area?
There is a misconception that money is the ultimate incentive for employee retention. Many Ukrainian companies believe that the employer must match any alternative job offers received by employees they want to retain. However, research suggests that there are other aspects of work which are equally important, especially for women.
According to a PwC study conducted with 10,105 millennial respondents from over 70 countries worldwide, 86% of women want to build their careers in companies that demonstrate their adherence to gender equality and diversity principles. This suggests that companies need to consider more than just reward as a way of motivating and retaining their employees. Other aspects, such as fair treatment, respect, equal opportunities for professional development and growth (which constitute core principles of gender equality) contribute to retention and career growth in a way that reward alone cannot do.
Many companies in Central and Eastern Europe (CEE) and around the world are unaware of the extent of gender gaps that still exist. In the past, there have been efforts to level the playing field, which some business leaders cite as evidence for equality in their workplace. However, there is a lack of monitoring, tracking and analysing of gender-based indicators, and internal policies are often not evaluated to ensure there is no unconscious discrimination.
And even if companies do track gender-based indicators, the approach is often high-level. Reaching a 50:50 ratio of female and male employees does not signify that an organisation has successfully achieved gender balance. It is also important to consider the distribution of women and men across all levels and functions within an organisation, rates of promotion among female and male employees, and the gender structure of new hires and leavers.
A powerful tool to achieve gender equality in the workplace is the Women's Empowerment Principles (WEPs) toolkit: seven principles which offer guidance to business on how to promote gender equality and women’s empowerment in the workplace, marketplace and community. The starting point for WEPs is acknowledgement by the top leadership that gender equality is important for their organisation. Therefore, the corporate journey towards gender equality starts with the CEO signature of the statement of Support for the WEPs. The principles follow logically from this point and are based on the leadership commitment to support gender equality within all business processes and operations, such as discrimination free internal policies (recruitment, development, remuneration and promotion) and gender-sensitive approach to customer and supplier operations.
Currently, almost 5,000 companies globally have become signatories of WEPs, with over 1,000 located in Europe and Central Asia. Business leader interest is rising in Ukraine and other CEE countries, acknowledging the importance of gender equality in improving business performance. Despite its devastating impact, the COVID-19 pandemic has the potential to become a real catalyst of change in this respect. With thinner reserves for financial reward and incentives, gender equality and inclusivity in the workplace can become a powerful tool for attracting and retaining key talents, and one that businesses who wish to succeed would do well to use.
So, where can businesses start?
An important practical tool to embrace gender equality principles within an organisation are gender-based indicators. These should be introduced as company-wide goals and targets for gender equality, with managers of all levels within the organisation being accountable and responsible for achieving these goals. In other words, gender-based KPIs. Such KPIs should aim for 50% representation of women in decision-making and governance positions at all levels and across all business areas of the organisation. For some industries (typically perceived as ‘male-dominated’) this might be an ambitious target, and a 30% ratio could be a good starting point.
Gender-based indicators are also useful metrics for assessing equality principles embedded in the company’s internal policies, i.e. tracking and analysing the ratios of women and men among joiners and leavers, those who received promotion and went through training and development programmes. Collecting and analysing gender-based indicators helps to identify gender imbalances, which might be the root cause of low retention rates, poor corporate morale, lack of incentive and motivation.
And finally, monitoring and evaluation of company gender equality goals is a KPI in itself. It signifies the commitment and accountability of company leadership and proves that gender equality is not simply a declaration but a real strategic business objective, at the core of a company’s values and activities.
There is growing awareness in Ukraine of the importance of gender equality, particularly in a business context. However, there is still much more to be done. The simple yet effective principles and tools outlined in this article represent a good starting point for any business that wants to reap the benefits of genuine gender equality.
Director, PwC Ukraine
Tel: +380 44 354 0404
Senior Manager, PwC Ukraine
Tel: +380 44 354 04 04