PETALING JAYA: Raising the female labour participation rates in Malaysia to match those of Singapore or South Korea has the potential to increase the country‘s gross domestic product (GDP) by between
PETALING JAYA: Raising the female labour participation rates in Malaysia to match those of Singapore or South Korea has the potential to increase the country‘s gross domestic product (GDP) by between RM6bil and RM9bil, according to a new report by global management consultancy McKinsey & Company.
The report - Women Matter: An Asian Perspective - is the first in-depth study that McKinsey has published on women in corporate Asia.
It noted that in both Malaysia and Taiwan, the female labour participation rate was less than 50%.
“In some markets in Asia the rates of female participation in the labour force remain very low. As a result, these markets are forgoing a significant growth dividend.”
The McKinsey report cited India as an example, where the female labour participation rate is 35% - one of the lowest in the world.
“Raising the participation rates of women in those countries would be a significant boost to growth in the long run.”
It also noted that in Malaysia, a high percentage of college graduates were female and women are well-represented at junior corporate level.
“In response to dwindling numbers at mid-to-senior management level as women leave the workplace to take care of their families the Malaysian government announced quotas in the public sector in 2004 and extended them to the private sector in 2011,” said the report.
However, it pointed out that corporate Asia was failing to tap its huge pool of talented women, which was an oversight that could impact companies‘ growth aspirations, given the acute talent shortage in the region. The report was done after selecting 745 companies from the stock indices of ten Asian markets, and checking the gender composition of their boards and executive committees. The McKinsey report also surveyed 1,500 senior managers in those markets.
The study finds that despite the low representation of women at senior levels, gender diversity is not yet high on the strategic agenda for most Asian companies, and few senior managers believe this will change anytime soon.
“Given tight labour markets and intense competition for talent across Asia, there is a strong business imperative for Asian companies to better tap the female talent pool.
“That means gender diversity needs to become a corporate priority,” said Dr Claudia Sussmuth-Dyckerhoff, who is co-author of the report and a director in McKinsey‘s Shanghai, China office.
The McKinsey study showed that some 50% of graduates in Asia are women, but only a fraction of that number make it to middle management, let alone the top.
On average, women account for 6% of seats on corporate boards, and 8% of those on executive committees in Asia.
“That is strikingly low compared with Europe and the United States, where the comparative figures, though still low, are 17% and 10%, and 15% and 14% respectively.”
Other key findings of the report include that even when women do enter the corporate world in Asia, they often fail to progress very far, either getting stuck in the pipeline early in their careers or deciding to leave at middle management.
For example, it said China has one of the world‘s highest female labour participation rates, but only 8% of corporate board members and 9% of executive committee members are women.
A separate McKinsey survey in China recently revealed that 44% of executives in 60 Chinese companies felt that lack of talent was the biggest barrier to their companies‘ global ambitions.
“Bringing more women into the workforce would help bridge those skill gaps.”
The McKinsey report said despite the business case for recruiting and developing more women, 70% of Asian executives surveyed said greater gender diversity was not a strategic priority for their companies.
In Europe, the figure was 47% in 2011.
In addition, less than half (some 40%) expected that their companies would step up efforts to improve gender diversity in the next five years.
The McKinsey Asia survey showed that only 12% of companies have in place a balanced gender diversity program to promote women‘s participation at more senior levels.
Very few appeared to have strong commitment from the chief executive officer and other senior executives.
“Only 15% of survey respondents said that the chief executive officer and executive teams in their companies visibly monitored progress in gender diversity programs.”