Workplaces That Work
Compete More Effectively by Being an ‘Employer of Choice’
Organizations compete for external resources in at least three marketplaces: the labour market, the financial investment market and the customer market. This section looks at each market to see how better utilization of women in high-growth sectors can contribute to important competitive advantages for employers.
Being recognized as an ‘employer of choice’3, where all segments of the workforce have the opportunity to thrive and contribute, directly positions an employer to compete for the best talent.
In a competition for skills, workplaces that are welcoming of women significantly increase the size of the talent pool they can draw upon. They will have more applicants and will generally be able to hire more qualified people. Similarly, being known as an ‘employer of choice’ improves an employer’s ability to attract and retain the most capable workers from the labour pool. And, as the illustration shows, this can have a significant bottom-line impact.
While small and medium-sized businesses have been the main source of job creation in Canada for the past decade, at the same time, labour shortages have caused an alarmingly high number of these businesses to pass up growth opportunities.5
Businesses also compete for financial resources and investment to support growth. Investors will be more attracted to companies with good people management because published research shows this is linked to better financial performance.
A company’s track record in people management practices, including women’s advancement, can affect investors’ decisions.
The November 2001 issue of the Harvard Business Review presented research that tracked financial returns of 215 Fortune 500 firms. Those companies with the highest percentages of female executives delivered earnings far in excess of the median for other large firms in their industries.7
Illustration
Consider two construction firms, each hiring approximately
30 electricians annually.
Firm A is characterized as an old-style firm with less-than-exemplary
working conditions for women. It receives 60 applications;
it makes 50 job offers to all but the least-qualified applicants
and 30 offers are accepted.
Firm B is well known as an ‘employer of choice’ and actively recruits women applicants. It receives an additional 30 applications, from equally skilled women, for 90 in total. It makes 35 job offers to the best applicants and 30 offers are accepted.
Evidently, Firm B can be more selective in hiring. It has a broader talent pool to choose from and its reputation leads more applicants to accept its offer.
The result? The higher performance of the new employees in Firm B can be estimated to bring $350,000 more value than that of Firm A’s employees, over a three-year period.6
An American Management Association study found that firms where women hold the majority of senior executive positions show the largest sales growth. In 1997 these firms averaged 22.9 per cent growth compared with an average of 13 per cent for firms where men were predominant.8
A recent study of Initial Public Offerings (IPOs) revealed that the initial share price was higher and shareholder returns greater for those firms that had women represented on the senior executive.9 The improvement in share price, both at the initial offering and at the three-year mark, reveals a more positive perception within the investment community and greater investor confidence than for similar firms with fewer women.
Businesses that thrive and prosper are those that compete effectively for customers and market share. It makes good business sense to view women as an important market segment in business – their buying power is substantial.
Success story
Manitoba’s innovative “Trade Up to Your Future” initiative provides a stepping stone to help women enter high-paying and high-demand careers such as welding and machining. Pre-trades training consists of five months of shops (welding and machining), upgrading classes and industrial workplace readiness.
One of the most critical features of the program’s success is the provision of two years of post-graduation placement support. The market for small industrial businesses tends to fluctuate and this can result in layoffs. The prospect of layoff can be daunting to the newly-minted trades workers who may lack the confidence to negotiate another job in their newly chosen field. The program’s consultant works to find other employment for participants who find themselves in this situation.
The consultant is also available to help address issues in the workplace such as a personality conflict or other difficulty that can be resolved. However, if the consultant concludes that the difficulty cannot be resolved or that the workplace climate is not conducive to a women’s success, the program will not place any further women graduates with this employer. The employer misses out on a negotiable wage subsidy, as well as access to critical skills that are in short supply.
The success for other employers speaks for itself. Several are now asking when the next graduates will be available and many are hiring women directly into permanent jobs without the wage subsidy.
Women influence 80 per cent of purchasing decisions for all products. There are more households headed by women than ever before and single women account for more home purchases than any other single market segment.10
“If you don’t have women in senior management, basically you really don’t represent the communities in which you do your business.”11
For businesses that sell to other businesses it is also important to note that women own and/or lead 34 per cent of all businesses in Canada and the number of women entrepreneurs is growing at twice the rate of men.12
Targeting female consumers or clients is increasingly important as women’s disposable income and spending power continues to grow. To ensure a successful market focus on women, employers will want women employees to be a critical component of their organization.
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