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Why Diversity Shows Up in Profit Margins & How to Make it Happen

Just 21% of senior management roles are held by women.

Even with the spotlight firmly fixed on equality in the workplace, this latest figure from Equipleap shows that businesses worldwide haven’t made significant progress.

So what’s the sticking point? Sunil Nayak, CEO Corporate Services Worldwide, Sodexo says:

“We know that most companies recognize the importance of being diverse and inclusive. But many of them struggle to weave it into their organizational fabric.”

If a better work culture isn’t enough of an incentive, we know that a gender balanced workplace can also increase performance. Diverse teams give an organisation a world view, making it more sensitive to customer needs and expectations on a global scale. 
In an extensive survey involving 50,000 Sodexo managers across 70 business entities worldwide, we found that performance improved with a 40 - 60 % female workforce. With this kind of gender balance, we scored better on five parameters: 

  1. operating margins
  2. employee retention
  3. client retention 
  4. safety
  5. employee engagement

McKinsey & Company’s latest study, ‘Delivering Through Diversity’, backs this up. It showed that companies ranking in the top quarter for gender diversity were 21 per cent more likely to see above-average profitability than those in the bottom quarter.


Diversity AND inclusion – what it means to give everyone a voice

“Showing diversity in hiring is just half the work done,” says Sunil. “Every person should feel valued by the organization.” Many people representing diversity have had the experience of feeling like a check on a box, rather than a contributing member of the team.

First step: Make it a leadership priority

Leadership is the starting point for developing a genuine and effective equal-opportunities culture. “My own journey with gender diversity started many years ago when I had one of the first interactions with my global CEO. He asked me, ‘Do the women in Sodexo India have equal opportunities?’ This question was as important to him as our business performance. Now I know it’s a question that every CEO should be asking.”

For Sunil, leaders play a crucial role in ‘walking the talk’. Like a celebrity lending weight to a social campaign, the words and actions of leaders have a profound effect on the way their employees think. Once it’s a priority, turning it into action is the next critical hurtle.

Woman holding an equility signThe cornerstone of equality – Equal pay

Another startling figure from Equileap shows that women worldwide are still paid 23% less than men. Equal pay is the cornerstone to equality; it should not be glossed over, it should be the first element thoroughly reviewed when a company is undertaking a diversity and inclusion effort.  

Sunil recalls:

“A few years ago I hired a female employee into a senior role. The head-hunting agency suggested that we didn’t need to offer her a salary at the market rate because she’d been on a sabbatical for the last two years to raise her child. I refused and ensured that she was paid the market rate. We don’t want pay gaps.”


Woman writing on a boardOn-the-ground details…how to make diversity a reality

It’s not enough for leaders to just provide strategic direction, they must play an active role too. One way Sodexo has turned this vision into a reality, and directly involved senior leadership, is by turning them into mentors and sponsors, setting an example for others to follow.  We have five dimensions for diversity – gender, LGBT+, disability, culture and origins, and generation – and executive sponsors for each one, with multiple networks across the globe.

Leaders can give their time for one-on-one interaction, show up for events, or even make simple changes that have a big effect, such as making an office space more accessible for someone with a disability.  

Create a talent pipeline and see the results

“My own experience at Sodexo has shown that this works,” says Sunil. “Years ago we realized that we didn’t have enough women leaders. We wanted to change this so we created a mentoring program with support and development opportunities for women coming into the organization. This has given us a ‘pipeline’ of women ready to take on leadership roles.”

Today at Sodexo, 54 per cent of our board members and 32 per cent of our leaders are women. This is proof that our efforts are paying off. 

 

If you can’t measure it, you can’t manage it

Another important step is to link diversity and inclusion results to business results. Having a strategy with measurable targets helps keep everyone focused on diversity and inclusion, showing that your business is going beyond the feel-good factor.


In the end…

Sunil knows how to give credit where credit is due: “I must credit my wife who makes sure I’m inclusive in all my actions and words, not only at work but also at home. I feel proud to be part of a company that values and practices its deep conviction to create a truly diverse and equal working environment.”

Ways to create diversity and inclusion in the workplace

  • Leaders should ‘walk the talk’ – be active, visible and engaged
  • Create mentoring programmes that support women and other under-represented groups into leadership roles
  • Have a diversity and inclusion strategy with targets that can be measured 
  • Foster a culture of inclusion where every employee feels valued
  • Work with, and learn from others – partners, clients and suppliers


*Equileap is a leading provider of data on gender equality in the corporate workplace. Figures are quoted from its Gender Equality Global Report and Ranking 2019.
 

January 06, 2020

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