ICGF Conference

Miami, May 21, 2010

Nadereh Chamlou
The World Bank
 Emerging global talent crisis and its root causes

 Solutions to talent crisis: skills upgrading, labor

mobility, and off-shoring to labor abundant locations

 “Brain waste” due to widespread gender gap caused by

traditions, conservative attitudes and social norms

 Bridging gender gap is good business, not just for

fairness

 Conclusion: talent crisis cannot be met without

narrowing of gender gap

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 Global economy will face demographic shock of a scale not yet observed

 Despite the significant workforce transformation – more educated, more

mobile, and more diverse than ever before – we are at the dawn of an
unparalleled skills crisis as the working-age population of many developed
economies starts to decline.

 By 2050, the global population of 60+ projected to exceed <15 cohort for first
time in history; developed economies will not find enough employees in home
markets to sustain profitability and growth.

 Challenge will be broad-based and affect all stakeholders and organizations.

 Human capital shortage will surpass financial and natural resource constraints
and will slow down the economic engine of the future

)
Source: Stimulating Economies through Fostering Talent Mobility (World Economic Forum

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 Current high unemployment levels have not
disguised talent shortages and employing the
unemployed is not a solution

 Need for effective collaboration among business,

NGOs, government, and universities – issues broad-
based and universal

 Emerging consensus on solving the talent shortages:

 Education, skills upgrading, and innovation
 Talent mobility and new talent environment of “brain
circulation”
 Outsourcing/offshoring core knowledge functions to
labor abundant markets

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 Crises pinpoint inefficiencies. Yet, prescriptions
discussed earlier to deal with the global talent crisis
are insufficient

 A critical shortcoming: BRAIN WASTE – defined as

“women and minorities BEING underutilized in
the work place”

 Diversity and inclusion are part of the TALK, but not

quite yet part of the WALK within
organizations/businesses
 Diversity & Inclusion still perceived as “doing good” rather
than as serious business needs

 Gender gap in economic opportunities remain despite

impressive female gains in education
 is THE persistent “brain waste” that cuts across
ethnic groups, nations, and cultures
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 Gender is Smart Economics (The World Bank, 2009)

 The Bottom Line: Connecting Corporate Performance and Gender

Diversity (Catalyst, 2004)

 Stimulating Economies through Fostering Talent Mobility (World Economic

Forum, 2009)

 The Gender Corporate Gap report (World Economic Forum, 2009)

While causality between number of female managers and share price

cannot be proven, studies suggest that better talent management, may
also lead to better management of other assets/operations

ICGF Conference 6
 Companies with a higher percentage of women in top
management experienced better financial performance than
companies with lower women’s representation

 This finding holds for Return on Equity (ROE), which is 35%

higher, and for Total Return to Shareholders (TRS), 34% higher

 In the 5 industries analyzed, companies with highest women’s

representation in top management experienced higher ROE than
companies with lowest women’s representation

 In 4 out of 5 industries, companies with highest women’s

representation in management experienced a higher TRS than
companies with lowest women’s representation

 Study replicated in Canada, Europe, and OECD countries with

similar conclusions.

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 Based on CAC 40 listed companies, the more women in management,
the lower the share price decline during 2008/2009 financial crisis
 CAC 40 declined by 43%, while corporates with high gender diversity lost less
 Hermes rose 17%
 Sodexho decreased 8%
 Danone fell 30%

 In contrast, companies with mainly male management decreased more

than CAC 40
 Lucent fell by 70%
 Renault fell by 81%
 Arcelor Mittal fell by 67%

 Similarly, in banking, BNP Paribas with higher management diversity

fell 39% while Credit Agricole with less diversity fell by 62%

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 Report on 6,000 companies in 16 major economies,
employing between 1,000-30,000
 Women largely concentrated in entry or middle level positions
 Except for Norway where board diversity is mandated by law, the
higher the levels of responsibility the lower the percentage of
women

 Closing the male/female employment gap is estimated

to boost US GDP by 9%, Eurozone GDP by 13%, Japan
GDP by 16%, suggesting:
 economies benefit by better integrating female talent pool
 particularly positive correlation between gender diversity in
leadership and company financial performance
 diverse backgrounds – rather than homogeneity – key to
understanding markets and risks

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 Female labor force participation considerably
below potential and below world average

Countries below the line underutilize -

investments in female capacity
relative to actual FLFP
2.00
1.80 World
average
1.60
1.40
1.20
1.00
0.80
0.60
0.40 1980

0.20 2000
0.00 2005

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 Still, women’s entrepreneurship is on the rise

Share/size of female-owned firms in developing regions

30
% o f F e m a le -O w n e d F ir m s a c r o s s r e g io n ( b
24
25
25 24%
20 20 20% 20%
20 20
15 13%
15
13 10%
10 10
10
Female-owned firms (% of total)

5 3%
5
3 0
0 M NA AFR EA P SA EC A LAC
A f r i c a E C A E a s t SA os ui a t h MA Es iNa AL A C
M i c r o (S1 m- 9 a) l l ( 1M 0 e- 4d 9i u ) m L( a5 r0 g- e9 9 a) n d V e r y L a r g e ( 1 0 0 + )

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Source: World Bank Enterprise Survey
 2 .4 4 2 .2 4
100%
2 3 .8 8 100% 1 3 .9 4 9 .7 5
3 2 .4 5 90%
80%
1 5 .4 1 80%
4 0 .1 4 1 .1 8
1 3 .8 0 70%
60%
60%
40% 4 9 .2 5 50% 1 1 .5 7
4 5 .2 8 40% 1 3 .9 4
sofirm
%

20% 30%
2 9 .5 8 3 5 .2 6
8 .4 7 1 1 .4 6 20%
0% 10%
F e m a-ol ew n e d M a -o
le w n e d firm s 0%
f irm s
F e m -oa wl e n e d f i rMm a-os l ew n e d f i r m s
la r g e m e d iu m s m a ll m ic r o t e x t i l ea g -fr o o d o t h e r m a n u f as ce tr uv ri icn eog st h e r

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Source: World Bank Enterprise Survey
 Export as much
 More so Egypt (30% women, 20% men), Jordan (50%
women, 30% men), and Morocco (65% women, 50%
men)

 Attract as much Foreign Direct Investment

 Use Websites and E-mail AS OFTEN

 And, hire as educated and skilled workers

as male firms, with one exception …
 FEMALE-OWNED FIRMS hire more women
(25% vs 22%), but more IN professional
and manageMENT POSITIONS 13
Investment climate is difficult for all
(but more so for women)

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 % of firms
decreasing increasing

80
60
40
20
0
1

20
40
60
80

-1
0.2
0.4
0.6
0.8

-0.8
-0.6
-0.4
-0.2
Egypt

Egypt

Jordan

Jordan

Lebanon

Lebanon

Morocco

Morocco

SaudiArabia

SaudiArabia

Syria

Syria
Change in firm w orkforce, by gender

West Bank & Gaza

West Bank & Gaza

Yemen

Yemen
Male-
Ow ned
Ow ned
Female-

Source: World Bank Enterprise survey15

 % of female w orkers in total employment in male and female-owned firms
across Regions
60
47
World 42
40 average
32 32
28 26
%

21 22 18 18 24 18
20

0
All East Asia & Europe & Latin Middle East Sub-
countries Pacific Central Asia America & & North Saharan
Caribbean Africa Africa

Male-owned firms Female-owned firms

 WORLDWIDE, 24% of workers are women Source: World Bank Enterprise Survey Data

 Female-owned firms hire more women, IN GENERAL

 MENA is lowest – but, THERE TOO, female-owned firms hire more
women 16
 % of women in professional and managerial positions
(as % of total non production workers)

60
48 World 5
average
42 1 42
37
40
33
%

37 35
34
20 26

0
All countries East Asia & Latin America Middle East & Sub-Saharan
Pacific & Caribbean North Africa Africa

Male-owned firms Female-owned firms

17Survey
Source: World Bank Enterprise
Data
 Share of female-owned firms across Regions

100

80
63
60 74 76 73
85
%

87
40

20 37
26 27
24 13 15
0
Sub-Saharan Europe and East Asia and South Asia Middle East Latin America
Africa Central Asia Pacific and North and the
Africa Caribbean
Female-owned firms Male-owned firms

18
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Source: World Bank Central Database and Edstats (September 2009)
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 Ultimately, Human Capital is the most indispensable
driver of economic growth and THE foundation of
innovation

 Tapping into global talent pool – through migration,

skills upgrading, off-shoring of core functions is
necessary, but insufficient without due attention to
gender diversity

 Bridging the gender gap at all levels is critical for

talent management and a stop to the brain waste

 MENA has potential to become a future talent hub,

particularly by absorbing the growing number of
female university graduates

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