In most countries, women have gained greater access to higher education than men. And yet, even as women have broken barriers in the workforce, they have struggled to make a positive impact. For example, women are still underrepresented in management roles because of biases that hold them back.

Addressing the significant role of women in the workforce will help businesses grow and thrive. In fact, companies with gender-balanced boards are predicted to see a return of $3.1 million in extra annual profits.

It is also beneficial for businesses to increase the number of women in management roles. 

Here’s why, in a study by McKinsey & Company, companies with more women in leadership roles were found to have higher profitability, operating margins, and return on equity.

Women in Management

Women have made significant strides in the workplace, but in many organizations, they remain underrepresented in senior management roles. The McKinsey Global Institute found that, in 2015, only 26% of senior managers in the Fortune 500 companies were women.

This lack of female representation at the very top of a company’s hierarchy can have a major impact on the bottom line. As leaders, female executives are more likely to make decisions based on financial performance and the long-term health of the company. They are also more likely to engage employees and promote a company culture that emphasizes teamwork and collaboration.

Paying Attention to the Bottom Line

The bottom line is the revenue generated by a company, and the revenue management department is responsible for ensuring that the company meets or exceeds its revenue goals. Senior managers, including those in the leadership team, are often drawn from the revenue generation departments. As such, they are usually made up of individuals who have strong revenue accounting and financial skills.

This presents an opportunity for more women to gain senior-level management experience. McKinsey found that companies with more female executives in revenue generating roles saw higher profitability and higher revenue growth. This can lead to an increase in shareholder value and a better industry standing.

Empowering Women Through Organizational Change

Organizations can also increase the number of women in senior management roles through organizational change. For example, some companies have implemented mentoring programs that pair junior-level employees with more experienced managers. The goal is to create an environment in which both men and women feel empowered to take risks, make mistakes, and drive innovation.

Other companies have focused on the role of leadership in the hiring process. By ensuring that the hiring manager is aware of the need to consider gender and ethnic preferences, organizations can increase the number of female hires.

Conclusion

As the workforce becomes more gender diverse, organizations can benefit from the diverse skill-sets, perspectives, and experiences of women. This can lead to better business outcomes, including higher profitability and greater shareowner value.

To maximize the impact of women in senior management roles, organizations should: 

• Recognize the significant role that women play in the revenue generation and financial performance of the company. 
• Invest in programs that help to build the skills of female leaders, particularly those focused on mentoring and leadership. 
• Create a culture that values leadership, encourages risk-taking, and provides pathways for advancement. 
• Hire more diversely, particularly for leadership roles.