How much CEE is losing by not fixing the gender gap
Closing the gender gap in Central and Eastern Europe could unlock Euro 146 billion in annual GDP by 2030, or roughly the size of the economies of Slovakia and Croatia combined. This great gender opportunity could put the region squarely back on a path to dynamic growth, a study from consultancy McKinsey shows
In CEE countries, women account for more than 60% of college graduates but just 8% of CEOs and 19% of corporate executives. Some 44% of companies don’t have even one woman on their board. This hits companies on the bottom line, according to the study comprising seven countries—Croatia, the Czech Republic, Hungary, Poland, Romania, Slovakia, and Ukraine.
“Since the transition to a market economy three decades ago, Central and Eastern Europe has enjoyed what many have called a golden age of growth. The region recorded an increase in per capita GDP of around 110% in the 15 years between 2004 and 2019. However, the factors driving that growth—such as labour cost advantages and strong traditional industries—are now losing momentum.”
McKinsey says studies have shown that a larger share of women in top management positions correlates to better financial performance by individual companies.
Analysis of a five-year global study of 1,000 large companies plus new information from more than 200 major companies in the Czech Republic, Hungary, and Poland shows that companies with the greatest gender diversity in their executive teams have above-average profitability 26% more often than those with the least diverse executive teams, the study says.
“Back in 2012, CEE countries were virtually on par with Nordic nations and far ahead of Western Europeans with respect to the representation of female executives. Fast-forward to 2020 and the gap between CEE and Nordic countries has increased sixfold, while Western European countries are on track to surpass CEE nations in 2028.”
The authors of the report say that interviews show that flexible work options is a key tool to improve diversity. Other actions would be fair evaluation and promotions and mentorship and sponsorship programs, while employees said that better childcare and maternity leaves are much more important.
The report is presented by Joanna Iszkowska, Kamila Kawecka, Warsaw; Paweł Nawrocki, Jurica Novak, Júlia Lázár, Marta Matecsa, Daniel Rona, Budapest; and Iva Štverková, Prague.
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