One aspiration, two realities: Promoting gender equality in Mexico

One aspiration, two realities: Promoting gender equality in Mexico

By Eduardo Bolio, Gabriela Garza, Valentina Ibarra, and Melissa Renteria

Investing in the development of women and ensuring that they advance is crucial to the economic performance of the country and its private-sector businesses.

Women in Mexico, like men, work toward professional success. But women face powerful obstacles to realizing their professional goals. In researching our new report—One aspiration, two realities: Promoting gender equality in Mexico—we found evidence that confirms the difficulties women face in advancing to the highest levels of their organizations and the enormous barriers that stand in their way.

We also found compelling evidence that investments in the training and development of women are essential for the prosperity of nations, including Mexico. More specifically, we learned that the economic performance of companies in the private sector depends on their ability to nurture and develop women.

Improving gender equality represents an opportunity for social and economic development

Besides being an imperative for social justice, closing the gender gap in the labor force offers an opportunity to increase total global GDP by $12 trillion and Mexico’s GDP by $800 billion, or 70 percent.

Greater gender diversity has a quantitative impact on corporate performance. Research shows that companies with more women in senior-leadership and executive-committee roles have superior financial performance and organizational health, more and better communication and staff development, lower turnover, and better management of expectations and incentives. Employees in these organizations see their leadership as more inspirational. The economic value added of companies with greater representation of women in management is, on average, 28 percent higher than that of companies without women in their executive committees. Their profit margins and returns on equity are 55 and 47 percent higher, respectively.

The gender gap in the Mexican workplace contrasts with women’s aspirations

Although women’s rate of workforce participation in Mexico has been rising in recent decades, it still lags behind other Latin American countries: only four out of ten women participate in the labor market. What’s more, the high number of young women who are neither studying nor working—31 percent of women under the age of 24, versus 9 percent of men under 24—indicates that women begin to fall behind from a young age. In fact, they are not only at a disadvantage from the outset but also underrepresented in all levels of the workforce: although they make up 46 percent of university graduates, for example, they hold only 37 percent of entry-level posts and a mere 10 percent of executive-committee positions (Exhibit 1).

Women are underrepresented in all levels of the workforce in Mexico.

The problem is even more evident in domestic companies. The proportion of women working in them, on average, is ten percentage points lower than the proportion working for foreign companies operating in Mexico.

Every sector confronts its own challenges in gender diversity. The financial sector, professional services, and the retail and consumer-goods sectors have mostly reached the desired levels of equity in entry-level positions. They are well ahead of the energy and heavy-industry sectors.

However, across the economy as a whole, women hold very few senior positions. Opportunities for women to advance through the corporate hierarchy are limited, since they are promoted far less often than men. While both genders aspire to reach senior management positions, men are 88 times more likely to do so (Exhibit 2).

Opportunities for women to advance through the corporate hierarchy are limited, since they are promoted far less often than men.

The wage gap between men and women is yet another manifestation of gender inequality. Among the companies analyzed, senior-level women earn up to 22 percent less than their male counterparts do (Exhibit 3).

The wage gap between men and women is yet another indicator of gender inequality.

Women face structural barriers to full professional development

Around the globe, female labor-force participation rises with the decline of the gap between the number of hours men and women spend on housework and caring for dependents. However, among Latin American countries, Mexico has one of the largest discrepancies between the time women and men devote to unpaid household tasks. In addition, Mexican companies base their performance model largely on permanent availability; current maternity-leave policies thus discourage organizations from hiring and promoting women.

As we have seen, women express as much interest in reaching professional leadership positions as men do. However, women believe it is less likely that they will reach them, given barriers in the organizational cultures and current policies of their employers.

Not surprisingly, women’s experience in the workplace is very different from men’s. Women report receiving less feedback and coaching than men get. Discrimination gives women a weaker sense of belonging than their male colleagues have, as well as lower levels of satisfaction overall. Yet employees don’t fully recognize the lack of diversity in companies in Mexico: only 25 percent of men and 41 percent of women believe that women are underrepresented in senior levels—though, on average, only one C-suite officer in ten is a woman.

Unlocking the potential of gender diversity in Mexican companies

Companies in Mexico have begun to take measures to improve diversity and gender equity, but very few have achieved major progress. It is essential to take into account not only the number of initiatives launched but also the quality of their execution and the leadership’s commitment to them.

An effective way to gauge the diversity strategy of a company is to understand its approach to recruiting and how it monitors women’s retention and promotion. The HR information systems of most of the companies we surveyed cannot identify or monitor gender gaps. In addition, most organizations in Mexico haven’t implemented specific processes for improving the recruitment and retention of women.

Some companies in Mexico, however, have implemented mentorship and sponsorship programs or formed women’s networks. The results are promising. Companies with women’s networks have 40 percent more women in management or senior levels. Companies with mentorship programs have nearly 38 percent more women at the senior-vice-president level and 16 percent more women on executive committees.

Flexible work arrangements—such as telecommuting, flexible starting and ending times, and compressed workweeks—are an important organizational tool to help women overcome structural barriers and come closer to parity. But it is also crucial to adapt the performance model so that these alternatives are implemented properly. Nearly half of the companies we surveyed offer flexibility programs, but 60 percent of those offering flexibility haven’t adapted their evaluation processes to the alternatives these programs create.

Increasing the number of women across all levels of an organization calls for a comprehensive transformation that takes into account the specific challenges that companies in Mexico face. Best-in-class organizations have already initiated the change through programs that connect gender diversity with all aspects of the business. These companies put change agents and role models at all levels of the organization and effectively develop and communicate a convincing change story to support their programs, policies, and processes.

A comprehensive transformation plan for maximizing the potential of women includes five key elements that each organization must diagnose, develop, and adapt. We call this framework CLIMB (Exhibit 4).

A comprehensive transformation plan for maximizing the potential of women includes five key elements.

Mexico can and must work to achieve the levels of gender diversity prevailing in more developed countries. To achieve this aspiration, the country must move forward with increased dedication and transparency, ensure the sustained commitment of business leaders, and coordinate all relevant public- and private-sector agents so that newly implemented measures truly take hold and bring about progress.

Download One aspiration, two realities: Promoting gender equality in Mexico, the full report on which this article is based (PDF–4.3MB).

About the author(s)

Eduardo Bolio is a senior partner in McKinsey’s Mexico City office, where Valentina Ibarra is a partner. Gabriela Garza is a consultant in the Monterrey office. Melissa Renteria, an alumna of the Geneva office, is an adviser to McKinsey.

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