Politics, Business & Culture in the Americas

Diversity Equals Dollars

Reading Time: 2 minutesHow hiring—and retaining—women boosts the bottom line.
Reading Time: 2 minutes

For many people, gender diversity is important because it removes barriers that have historically prevented women from taking their rightful places in the corridors of power. But there’s also a specific business case to be made: including more women in the corporate setting will help meet customers’ needs, enrich understanding of the pulse of the marketplace and improve the quality of products and services.

The business case rests on what should be an obvious point: companies cannot effectively sell to women if they do not understand and value women, whether as customers or as employees. Therefore, increasing gender diversity in Latin American companies, especially in mass consumer-oriented sectors where women form large portions of the actual or potential customer base, will help boost their bottom line.

In the United States, proponents of diversity commonly make the claim that diversity pays. The greater the diversity among employees, the broader their perspectives, resulting in an ability to marshal a wider array of intellectual and cultural resources to solve problems. Diversity also is a source of creative conflict that can lead to a re-examination of assumptions that would otherwise be dominated by male points of view. The putative competitive advantages—fresh ideas, positive outreach and communication with customers, more qualified workers— have persuaded many companies that diversity can produce greater profit.

How It Works

These claims about gender diversity and business outcomes are well-supported in the United States. For example, using a random sample of business organizations, a 2009 study showed that higher average sales revenues are associated with higher levels of gender diversity.1 The study revealed that the average revenues of businesses with low levels of gender diversity were roughly $45.2 million, compared with $299.4 million for those with medium levels of gender diversity, and $644.3 million for businesses with high levels of gender diversity. [see figure below]

Higher levels of gender diversity were also associated with greater numbers of customers.

The average number of customers for businesses with low levels of gender diversity was 20,500, compared to 27,100 for those with medium levels, and 36,100 for businesses with high levels. The analysis also showed that 62 percent of businesses with high levels of gender diversity reported higher than average market share, compared with 45 percent of those with low levels of gender diversity and 58 percent of businesses with medium levels of gender diversity…

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