Since the transition to a market economy three decades ago, Central and Eastern Europe (CEE) has enjoyed what many have called a golden age of growth. However, the factors propelling that growth—such as labor-cost advantages and strong traditional industries—are losing momentum, and the region needs to find new sources of competitiveness. Our recent study Win-win: How empowering women can benefit Central and Eastern Europe explores one promising source of growth: closing the gender gap in the workplace. In the Czech Republic, women make up 63 percent of college graduates and 44 percent of the labor force.
Our research found that stepping up efforts to close the gender gap in the Czech Republic could unlock as much as EUR 20 billion in annual GDP by 2030 (Exhibit 1)—a 7.8 percent increase over a business-as-usual scenario. This could put the country squarely back on a path to dynamic growth following the COVID-19 pandemic.
The report examines the potential benefits of greater gender equality for CEE businesses and society, identifies barriers to progress, and pinpoints a series of actions that could help move the needle toward parity.
The benefits of gender equality
Increasing the participation of women in the workforce would go a considerable way toward solving CEE’s labor shortage. The region currently has 630,000 job vacancies across its constituent countries, and if it returns to its pre-pandemic (2010–19) growth rate, this number could increase to more than two million by 2030. This gap would be more than filled by the extra 2.5 million women who would potentially join the workforce if countries in CEE made efforts to close the gender gap.
Improving the participation of women in the workforce is only part of the value that gender parity can deliver. Based on the McKinsey research conducted over the past decade, there is a business case for diversity. For example, our studies have shown that a larger share of women in top management positions correlates to better financial performance by individual companies.
To confirm that this correlation also applies to companies in CEE, we augmented data from a five-year global study by McKinsey that looked at more than 1,000 large companies in 15 different countries by adding new information from more than 200 major companies in the Czech Republic, Hungary, and Poland. Our analysis of the entire data pool revealed companies with the greatest gender diversity in their executive teams were 26 percent more likely to experience above-average profitability than those with the least diverse executive teams or no female representation at this level.
Barriers to progress
The greatest gender inequalities in CEE relate to leadership positions, unpaid work, legal protection, and political representation. Our report focuses on the first two areas: the underrepresentation of women in leadership positions and the challenge of unpaid work.
Although women make up more than three fifths of college graduates in the Czech Republic, only about 27 percent of all managers are female (compared to 37 percent of female managers in the CEE region). Women hold only about one tenth of executive roles in the Czech Republic (compared to one-fifth in CEE). At the highest level, only about 4 percent of CEOs in the Czech Republic are female (compared with 8 percent in CEE). At the CEE level, 44 percent of leading companies do not have a single woman in an executive role (Exhibit 2).
Why are there so few women in executive positions in CEE? Our survey of approximately 3,000 employees in the region, with about one third from the Czech Republic, uncovered the following insights:
In the Czech Republic, women are as ambitious as men but they are still underrepresented in leadership. The survey among Czech respondents showed that 47 percent of Czech women versus 52 percent of Czech men wanted to be promoted. However, only 27 percent of Czech managers are women, with only 11 percent of executive roles held by women.
Women tend to attribute lack of success to themselves while men tend to look for external reasons. As many as 48 percent of Czech women (versus 36 percent men) said they lacked the skills to be in the top executive role. Moreover, 54 percent of Czech women (versus 49 percent of Czech men) said they lacked the typical style of a top executive. As many as 43 percent of Czech men (versus 31 percent of women) said that top executive promotions were not based on merit.
Unpaid work is a major barrier. In our survey, 26 percent of Czech women pointed to a lack of work-life balance as another reason why they were unlikely to make it to the top. Only 17 percent of Czech men said the same. These findings are supported by a 2018 survey by Eurostat, which found that almost 70 percent of women in CEE perform household chores daily, compared with 22 percent of men. In addition, nearly 40 percent of women provide daily unpaid care work (looking after children, the elderly, or people with disabilities). This is twice as many as men. Essentially, female employees are still working a “double shift”.
The COVID-19 crisis has created additional burdens on women. With many families working and learning at home, both women and men have been spending more time on household chores and unpaid care work. But the increased burden has fallen disproportionately on women. Even before the pandemic, unpaid work at home was unequally distributed: 63 percent of Czech women did most or all the work at home (vs. 24 percent of men), while 67 percent of Czech women did household chores daily (vs. 16 percent of men). More than one fifth (23 percent) of Czech female respondents in our survey said that due to the pandemic they had more household or childcare responsibilities (versus 12 percent of Czech men).
For the full report, read here.
The Briefing note includes insights for the Czech Republic and Slovakia.