According to the new study which covers India, UK & US reveals that the companies with diverse executive teams outperform competitors run by only men. The report by Grant Thornton is mainly focused on whether diverse executive team outperforms male-only peers. Companies listed on S&P (US) out of 500 in 484 companies women are on the board, in CNX (INDIA) out of 200-176 companies have women on board & in FTSE (UK) out of 350 companies 330 companies have women in executive team.
This reveals that in India 24 companies listed in CNX still don’t have women on board. Now that seems to be bit disappointing. India is the 2nd largest populated country in the world with around 121 crores. And women comprises of 48.5% of the population. Currently in India more than 30% of the population lives in urban cities & more than 30% of the Indian women live in cities. Coming to the education part in India 51% of women & 75% of men are literate. But the sad part is the statistics revealed in the Labour Bureau report, that in India only 2 % workforce is skilled workforce & only 6.8% are receiving or have received skills.
The reasons behind this issue are:
- Lack of formal vocational education in primary & secondary level
- High school dropouts rate
- Inadequate skill training
- Negative perception towards skill
- Lack of industry ready skills even in professional courses
India’s record in women’s participation in the workforce is depressing
According to the report published by aid group Oxfam, India ranks the 2nd lowers in the group of G20 economies when it comes to women’s participation in the workforce. Only Saudi Arabia is the country that does not allow its women to drive. That is bad enough, but it doesn’t end here.
When it comes to women’s economic participation, India’s participation seems to be at the bottom even when compared to the entire world. It ranks 124 out of 136 nations, and this report was revealed by World Economic Forum (WEF). All the BRICS nations rank much higher than India.
According to US Gender Statistics, India is among the few countries where the rate of women participation has drastically declined in the last decade. It fell from 33.7% to 27% from the year 1991-2012.
Less than 20% of workers in non agriculture sectors are women, according to India Statistical Department states like Manipur, Tripura, Tamil Nadu 7 Kerala have largest percentage share of women in non- agriculture sector whereas in states like Bihar, Jharkhand, Uttarakhand & Utter Pradesh have lowest. Labour market in industry & service sectors in India is heavily male dominated. But there is one positive trend underlying that might also contribute to the lower number of women at workplace.
According to International Labour Organisation (ILO), increasing number of working age women is enrolling in secondary school & that accounts for some decline in female workforce participation since 2004.
But even educated women are opting out of full-time employment. The research by Everstone Capital shows that while the number of women enrolling in college has grown up, it has not contributed into a proportionate increase of women graduate in the workforce. According to the MD of Everstone Capital “Increasing women’s participation in the workforce could be one of the most powerful ways to boot the Indian growth , income & consumption”, but she also adds that while the number of women enrolling in college has increased and the women has become more educated, it appears that they work less & less. The number of women studying for commerce-related degrees in Indian universities per 100 men is almost 63. While the ratio in engineering & technical degree rose to 33 from 8, based on census data. Once women leave college, those gains get disappear.
Reason for disappearance of women after college:
- Staying home: The rate of India’s female graduates entering the workforce is only about 22 percent, lower even than the rate of illiterate women finding a job. If even half of India’s working-age women were employed, incomes would rise by more than 12 percent by 2025 and gross domestic product would increase by $110 billion in a decade.
- Biased boardrooms: The low numbers of women graduates in work are reflected in India’s boardrooms. Of 1,112 directors in the 100 companies on the BSE 100 stocks index, 59, or 5.3 percent, are women – less than half the ratios in the U.S. and U.K. Indian women hold 9 percent of jobs at the director level or higher — behind all countries except the United Arab Emirates and Japan.
- Most companies don’t provide the facilities and flexibility that would attract women trying to balance a career and family.
- Staff shortage: Some of India’s most successful companies are taking steps to try to recruit and keep female graduates amid a shortage of skilled staff. Data compiled by Bloomberg shows, Information technology and financial services companies have the most women on their boards. The top three technology companies by revenue, Tata Consultancy Services Ltd., Infosys Ltd. and Wipro Ltd., had the highest percentage of female staff in the workforce — up to 34 percent.
- Seeking talent: Multinationals such as Procter & Gamble India offer additional maternity leave, while lender ICICI Ltd., which has produced seven of the country’s 14 top female financial services executives, gives young mothers extended time off and more options when they return to work.
For women for whom the economic need is less, the challenge is finding them work that is interesting and challenging, and also making them feel rewarded. In an effort to lure back women who have quit work, Mumbai-based Tata Group introduced a Second Career Internship Program on International Women’s Day in 2008. According to Radhakrishnan Nair, a vice president at Tata Group Human Resources, more than 125 women have completed the course at India’s biggest business group; with about one-fifth taking full-time jobs within the group and a quarter finding work elsewhere.
- Untapped Pools: This is a huge, untapped talent pool with very valuable experience and skills. Women should be encouraged to stay in the workforce and this can only happen if companies offered more options, more flexibility.
- These low rates are largely due to cultural attitudes and social norms about women in the workplace
According to the ILO’s Global Employment Trends 2013 report, India’s labour force participation rate for women fell from just over 37 per cent in 2004-05 to 29 per cent in 2009-10. Out of 131 countries with available data, India ranks 11th from the bottom in female labour force participation.
Meanwhile, India has tried to tackle the inequality in basic education and has stepped up enforcement of working rights for women. A drive to get families to send their daughters to school improved women’s literacy levels to 65.5 percent in 2011, from 53.4 percent in 2001. The government has clamped down on marriages below the legal age of 18 for women, outlawed pay discrimination and mandated maternity leave of up to 12 weeks.
Percentage rate of change in women on leadership board
In terms of declining employment opportunities, occupational segregation appears to play an important role in holding women back: Women in India tend to be grouped in certain industries and occupations, such as basic agriculture, sales and elementary services and handicraft manufacturing.
The problem is that these have not seen employment growth in recent years, which has put a brake on female employment growth. Female employment in India grew by 9 million between 1994 and 2010, but the ILO estimates that it could have increased by almost double that figure if women had equal access to employment in the same industries and occupations as their male counterparts.
Women hold only 7.7% of board seats and just 2.7% of board chairs. The industries with the highest percentage of women on boards are technology, media, and telecommunications. Out of 323 total executive directorship positions (generally considered to be prerequisite to become CEO) on the Bombay Stock Exchange 100, just eight (2.5%) are held by women. 54% of companies on the Bombay Stock Exchange 100 have no women board directors.
Only 5% of working women in India make it to senior leadership positions in the corporate sector, compared to the global average of 20%. According to the study, women’s representation at the board level was lesser at just two percent.
The study said that in India, women’s strength in the labour force stands 28% at the junior level, 14.91 at the middle level and 9.32% at the senior level.
From being the lowest in the list of overall women’s participation in the workforce, India ranks at the top in the dropout rate as well, it said. “Indian women drop out of the workforce much early in their career compared to their counterparts in other Asian countries. India is once again the worst performer in this regard, with 48 percent of women dropping out between the junior and middle level,” The research was carried out following the Companies Act 2013 – that made it mandatory for public and private companies with a given yearly turnover to have at least one woman director – and now the SEBI’s extended deadline to enforce the same
The primary reasons often mentioned for the high dropout rate have been child care and family responsibilities, including care for the elderly. Women often succumb to the ‘daughterly guilt’ where they take upon themselves the responsibility for the care of elders in the family and are thus forced to push their careers behind as ‘secondary’ revealed the study.