Only 14% of firms in Latin America and the Caribbean (LAC) belong to women, and they hold just 15% of management positions. These are some of the findings of a new IDB Group study that reveals the extent of gender inequality in companies in the region and offers recommendations to achieve greater equality.
The publication, Leveling the Playing Field: Gender Equity in Firms in Latin America and the Caribbean [publication in Spanish], concludes that the main factors that increase gender equity in companies are the presence of women in high decision-making positions, the level of training of the workforce, the use of advanced technologies, and a business culture that is favorable to women.
The study was produced by the Institute for the Integration of Latin America and the Caribbean (INTAL) of the IDB’s Integration and Trade Sector, IDB Invest, and the IDB’s Gender and Diversity Division.
The report is based on a survey of more than 1,000 companies in 20 countries in the region and interviews with women entrepreneurs from six countries on female participation in their organizations, their employment policies, and the impact caused by the COVID-19 pandemic.
The survey revealed a series of data on gender segregation and the wage gap between women and men in companies in the region. For example:
- A woman only holds the top management position in one out of every 10 companies in the region.
- There is a higher proportion of women in junior positions (36%) than in senior ones (25%).
- The female labor presence predominates strongly in “soft” areas such as human resources, communications, and public relations.
- Women only represent 35% of the workforce that uses advanced technologies.
- Almost six out of every 10 companies do not provide any additional maternity or paternity leave beyond what their countries’ laws require.
- Only 28% of the surveyed firms report having a gender pay gap, of which 34% claimed that the disparity ranged between 11% and 20%.
In the interviews, the businesswomen acknowledged having observed salary differences between men and women throughout their careers. “I have seen men being paid as much as 40% or 50% more than women in the same position and you wonder why given that talent has nothing to do with gender. Addressing this is an enormous challenge for businesses,” said the CEO of a company in the technology sector in Mexico.
What can companies do to improve gender equality?
First, women in executive roles promote greater gender equality in their companies. Some key factors are the gender of the CEO and the percentages of women on the board and women owners. Different econometric models reveal significant differences in this regard, demonstrating women’s commitment to gender equality when they reach leadership positions.
Second, companies with a more skilled workforce than the average firm and advanced technologies in their production processes are more pro-gender than the rest. In other words, companies that invest in their employees can create better work environments for their workforce.
Likewise, a business culture that allows flexible office hours and uses government programs for gender equality is another critical factor in building better workplaces for women and improving their career opportunities.
Finally, older firms with larger numbers of employees and seniority are more equitable. The models used in the study show that the most consolidated firms with formal human resources and salary policies may favor transparency and equal opportunities.
Promoting gender equality in Latin America and the Caribbean firms
To increase gender equality in firms in the region, the public and private sectors should 1) promote more female entrepreneurship, 2) develop more and better labor market policies and measures, and 3) make trade more beneficial for women.
On the first point, the study recommends implementing best practices in inclusive public procurement and contracting1 and making the most of networks for women in business, such as ConnectAmericas, the platform created by the IDB to support the internationalization of LAC SMEs.
Firms, governments, and integration blocs should consider some good practices to increase gender quality in the workplace, such as removing barriers to women’s professional growth, drafting and implementing quota laws for boards of governors and senior positions, longer leaves of absence, and pay transparency.
Third, to promote women’s participation in the export sector, the study emphasizes promoting new trade agreements and analyzing the inclusion of gender causes that allow women to benefit directly from these impacts or that mitigate the unfavorable effects that trade may have on women.
IDB support for gender equality
As part of its Vision 2025 for economic recovery, the IDB Group has established five priorities to respond to the challenges facing the region and achieve sustainable, inclusive economic growth. One of these priorities is gender equality and diversity.
Under this priority, the IDB leads several programs, including the Gender Parity Taskforce, which promotes gender equality within the labor market and seeks to identify barriers to women’s professional development. Another of these programs is Growing Together in the Americas, which encourages women entrepreneurs to get involved in foreign trade and regional value chains.
For its part, IDB Lab has created WeXchange, a platform to connect women entrepreneurs with high growth potential in the region with mentors and investors. And IDB Invest encourages the removal of obstacles women entrepreneurs face, offering them financial products and advisory services to help them build more inclusive businesses.
By working together with LAC governments and businesses, the IDB Group is committed to providing technical and financial support to efforts that foster a region with greater gender equality.
To find out more, download Leveling the Playing Field: Gender Equity in Firms in Latin America and the Caribbean [publication in Spanish].