As Thailand responds to COVID-19’s longer-term economic impacts and its leaders navigate this economically uncertain period, there is a risk that the gender diversity imperative falls to the wayside for businesses and policymakers.
This critically important topic should not be overlooked. Advancing Thailand’s gender equality has the potential to not only drive economic recovery and performance improvements, but also shape an inclusive, resilient, and sustainable social and business environment for the nation’s long-term growth as we look towards a post-COVID world.
Thailand is currently ranked 75th in the World Economic Forum’s 2020 Global Gender Gap Report. By the end of 2020, the report estimates that women will make up roughly 35 percent of top management positions in firms and 16 percent of representatives in parliament. And a 2019 International Finance Corporation study on “Board Gender Diversity in ASEAN,” covering Singapore, Malaysia, Indonesia, the Philippines, Thailand, and Vietnam, found Thailand to be the most gender diverse in terms of board representation.
Addressing gender gaps has potential GDP and performance upsides
A recent McKinsey Global Institute study, which builds on five years of research, applied gender-regressive scenarios to sample countries in Africa, Asia, Europe, and North America.
The study found that, if no action is taken to counter gender inequality in employment, global GDP growth could be $1 trillion lower in 2030. On the other hand, collective actions taken by countries now could contribute up to $13 trillion to global GDP in 2030.
Speed is imperative. A third approach – taking action on gender equality only after the pandemic has subsided rather than now – reduces the potential opportunity by more than $5 trillion. The cost of that delay amounts to three quarters of the total GDP the world could potentially lose to COVID-19 this year, according to McKinsey’s latest research on COVID-19 and gender equality.
Advancing gender equality is not just an opportunity for countries; companies also stand to gain. Another McKinsey study on diversity examined more than 1,000 large companies in 15 countries and found that companies in the top quartile for gender diversity were 25 percent more likely to have above-average profitability compared to firms in the bottom quartile. The highest-performing companies in the top quartile also had more women in executive teams than in staff roles.
In contrast, companies in the bottom quartile for gender diversity were more likely to underperform in their industry average.
The potential macro and organisational benefits from gender equality are clear. The next question is, what are some actions firms can take to sustain and grow gender diversity and inclusion?
The building blocks for gender equality in organisations
Top performing firms do more than talk the talk around gender issues. They understand the imperative behind gender equality and are willing to invest to change attitudes and corporate culture to enhance long-term growth and value creation.
These firms often have several factors in common:
1. Increasing representation of women
Top performing firms embed gender and diversity-related metrics in performance tracking and management from the top of the organisation downwards to make sure that it is crystal clear where accountability for delivery sits. There is also a need to close the gap by advancing women into executive, line management, technical and board roles–fixing the “broken rung” on the corporate ladder, which McKinsey finds occurs most often at the first step up to manager.
2. Promoting inclusive leadership and accountability
Top performing firms secure gender and diversity buy-ins at the top levels of management. Companies that want to lead in this space should be boldly transparent here and implement measures such as actively tracking progress against gender, diversity and inclusion targets through dashboards that are visible across the organisation.
3. Increasing equality and fairness of opportunity
Hiring, promotions and pay within the organisation should be transparent and fair, particularly at key inflexion points such as this first promotion. Organisations should also ensure that diverse talent can benefit from sponsorship by making sure they have access to the resources they need to succeed and promoting and tracking the uptake of flexible, agile working and retention initiatives for all employees.
4. Tackling microaggressions and promoting openness
Companies leading the way in parity uphold a zero-tolerance policy for discriminatory behaviours and harassment. They should also improve managers’ awareness of existing privilege, strengthen their ability to identify and tackle microaggressions, and empower employees to share upward feedback.
5. Strengthening belonging in the workplace
Lastly, inclusive leaders—people-oriented leaders who are excited to embrace change and able to bring out the best in their teams—are a pre-requisite to drive an inclusive culture in any organisation. In addition to making sure that managers receive the necessary training for this, companies should track inclusive leadership as a key competency alongside financial, operational and customer metrics.
Thai companies cannot afford to underleverage the importance of gender equality throughout their organisations. A sustained movement towards parity can give companies a clear competitive edge and enable all individuals in the organisation to bring their best selves to work.
Doubling down on gender equality efforts, especially now
There is naturally a huge amount of work required, especially given the workforce challenges brought on by COVID-19 and the looming age of automation and digital disruption.
Stakeholders from both the public and private sectors in Thailand need to work hand in hand to develop cross-cutting solutions, such as designing job stimulus programs and company restart strategies with gender equality built in, creating business incentives for companies to increase women in leadership roles, fostering a diverse and inclusive corporate culture, providing family-friendly employment options, supporting women-owned businesses in supply chains, and more.
Individuals can contribute too, whether by advocating for themselves or women colleagues, speaking up if they encounter unconscious bias or microaggressions, and promoting gender equality values among family and friends. If they are investors, individuals can support companies that are proponents of gender equality.
Unwavering support from all stakeholders for gender equality could not only support Thailand’s overall resilience, but also its ability to recover from the current crisis and gain a share of the potential economic value at stake.
Authors: Noppamas Sivakriskul, Senior and Managing Partner, Harry Seip, Partner, McKinsey & Company’s Bangkok. For further information please contact Alan Laichareonsup at email: Alan_Laichareonsup@mckinsey.com
Series Editor: Christopher F. Bruton, Executive Director, Dataconsult Ltd, chris@dataconsult.co.th Dataconsult’s Thailand Regional Forum provides seminars and extensive documentation to update business on future trends in Thailand and in the Mekong Region.