BCG examines strategies for increased female senior leadership in the GCC

27 March 2018 5 min. read

As significant social and economic reforms roll out across the Middle East, global management consultancy firm The Boston Consulting Group has examined organisational strategies to close the leadership diversity gap in a region which records the highest gender income losses in the world.

The studies are unanimous; diversity equals dollars. A raft of recent reports have determined that companies with greater diversity profiles perform better across every measure than those in the lower percentiles, including on the bottom line. One study earlier this year by McKinsey & Company found that companies in the top quarter-bracket for gender diversity at the executive level were 21 percent more likely to outperform on profitability, with those in the bottom quartile for diversity being 29 percent less probable.

Nations, likewise, benefit form diversity in the labour-force, not just in terms of social advancement, but as an economic driver as well. In its report on the Middle East, the global strategy and management firm The Boston Consulting Group cites further studies which indicate that gender inequality translates to an average global income loss of 13.5% – due to both gaps in occupational choices and losses due to non-participation. This figure balloons to 27% with regards to the Middle East.Women’s Participation in the Workforce and Employment RateAs such, and with respect to the numerous national transformation projects underway in the GCC, some of which will lead to greater female workforce participation (such as women being granted the right to drive in Saudi Arabia – which PwC suggests could prompt as many as 3 million Saudi women to newly seek employment), the local arm of BCG has evaluated various oganisational strategies to increase gender diversity as to determine those most effective in the GCC.

As a contextual starting point, BCG examined the current state of female workforce participation and employment rates in the six member-states of the GCC. On available figures, Qatar had a 51% female workforce participation rate (akin to numbers in the EU), while Saudi Arabia (20%) and Oman (29%) recorded well under one third. Bar Kuwait (44%), most of the GCC nations saw a rise between 2000 and 2014 – with some, such as Qatar (38% to 51%) and UAE (34% to 46%), recording quite a significant hike.

However, some of the rises in participation have coincided with a sizeable percentage increase in the female unemployment rate – Saudi Arabia for example jumping from 9% to 20% – as, in part, growing levels of female higher education go unmatched by the number of equivalent opportunities in the labour market. While cultural bias and labour regulations remain obstacles in certain countries, BCG’s survey of 15 prominent GCC organisations indicates that business leaders in the region are aware of the importance of greater gender diversity and consider it a commercial priority.Participation of Women in Boards of Directors and LeadershipOnly a few however have explicit and dedicated programmes. Analysing the successes in developing an attractive and inclusive workplace for female employees, common initiatives included flexible working arrangements, anti-discrimination policies, including recruitment and pay, and cultural support schemes. Yet, as the initial focus has been on increasing numbers, few organisations had initiated programmes for female empowerment and senior advancement.

Looking at female senior leadership levels in the GCC in comparison to international benchmarks, the 6% share of women holding senior positions in Saudi Arabia, for example, falls dramatically short of the 43.5% number in the U.S. Bahrain, the nation with the highest ratio in the region at 22.5 percent, still only registered a rate of barely one half in comparison. And the figures are more pronounced at the Board of Directors level – with Saudi Arabia notching 0.1% and Bahrain slipping to 1.7% - compared to 16.6% in the US and the 47.6% achieved in Norway.

Even at the more progressed international level, an earlier report from BCG conducted last year in the U.S. (and reflected by studies elsewhere) noted a continuing misalignment in the perceptions of senior business leaders and current and prospective female employees as to workplace obstacles and priorities. The report found that while companies were spreading their investments relatively evenly across diversity measures, the primary concern cited by women (at a 48% share) was overwhelmingly that of advancement.Companies are not Focusing their Efforts on Women’s Biggest ConcernsThe latest report argues that it’s now time for GCC organisations to take the next step in embracing diversity if they are to develop the senior female leaders of tomorrow, identifying six key strategies centred on retention, advancement and developing leadership-capacities: adding gender diversity as a strategic objective; ensuring senior leadership and middle-management engagement; fostering retention of female employees with high potential; promoting development and the positive use of role models, and; removing any conscious or unconscious biases.

“Our study reveals that creating a pleasant working environment is not enough to develop senior female leaders in the long run,” the report concludes. “In a cultural and regulatory context that can be constraining, setting targets and quotas could be a successful short-term solution for CEO’s. However, to achieve long-term changes at all levels and across all industries, CEO’s must be committed to achieving those targets, to engaging with the entire organisation, and to employing high-potential women at the top.”