how organizations in the middle east can stretch their ......4 how organizations in the middle east...

How Organizations In The Middle East Can Stretch Their Diversity Spend

The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with more than 90 offices in 50 countries. For more information, please visit bcg.com.

Beatrice Lemucchi, Wieske Heinen Elgun, and Elsa Haddad

September 2017

Joerg Hildebrandt, Leila Hoteit, Pamela Merlino, and Anna Chiara Tortorella

How Organizations In The Middle East Can Stretch Their Diversity Spend

2 How Organizations In The Middle East Can Stretch Their Diversity Spend

AT A GLANCE

“Diversity fosters creativity. We need to generate the best ideas from our people in all levels of the company and incorporate them into our business practices.“ Frederic Roze, CEO of L’Oreal USA.

According to Credit Suisse’s Gender 3000 2016 report, companies with at least one female director have generated a compound excess return per annum of 3.5 per cent age points for investors over the previous decade. Forbes reached a similar conclusion. They examined the stock performance of the 26 publicly traded compa-nies on its ‘2010 Power Women 100’ list that are headed by women and found that, on average, these companies outperformed their industries by 15% and the overall market by 28%.

Further, a number of recent studies indicate that a reduction in the employment gender gap has been an important driver of European economic growth over the past decade, and has the potential to unleash even further growth. Conversely, limiting women’s access to labor markets is costly, as poor female labor-force participation hampers economic growth. According to these studies, gender in-equality creates an average global income loss of 13.5%, which can be divided into losses due to gaps in occupational choices and losses due to labor force participa-tion gaps. This figure is the lowest in Europe (10%) and highest in the Middle East and North Africa (27%).

As the topic of gender diversity is still emerging in the Gulf Cooperation Council (GCC) region – where the level of engagement differs across countries, industries, and organization sizes –many organizations may be missing out on significant growth potential.

The Boston Consulting Group 3

The goal of this report is to analyze what worked well for GCC organizations in closing the diversity gap – and also what did not. How does the workplace

look for women in the GCC? Why are some initiatives less effective than others? How can a sustainable change in the landscape of gender diversity be created? How do we overcome cultural bias? To answer these questions, BCG collected insights from 15 prominent organizations in the GCC.

GCC organizations have generally been successful recently in creating attractive places for women to work and fostering inclusion in the work environmentLarge organizations in the GCC have been particularly successful in implementing cutting-edge flexible schemes and arrangements for female employees. Anti-harass-ment and inclusive culture is the norm in most organizations today. Even in “heavy” industries such as oil and gas, companies have led significant efforts to at-tract women to more operational roles.

Organizations should now focus on how to grow from a pleas-ant working environment to a place where women want to stay and build their careers Initiatives are successful only if they tackle the right issues. Successful organizations have invested time and effort in identifying and implementing initiatives that can attract talented GCC women, such as flexible working arrangements and inclusive policies. CEO commitment is key to the success of all such endeavors. However, an effort that is isolated from senior leadership will not be sufficient to attract and re-tain women in senior leadership positions.

Now is the time for organizations to fully embrace gender diversity and set the ambition to develop the female leaders of tomorrowGlobal business leaders are increasingly aware of the importance of addressing gen-der diversity. Over 20% of the leaders surveyed in the World Economic Forum’s The Future of Jobs report highlight the importance of gender parity not only as a matter of fairness and equality, but also as a reflection of the changing gender composition of their customer base and enhanced corporate decision-making and innovation.

This point of view is shared by leaders in the region. In the words of the CEO of a


leading national oil company “We recognize the value of gender equality and women empowerment, not only because it’s the right thing to do, but also because it makes busi-ness sense.” This sentiment has been echoed by senior leaders of prominent banks in Oman and Saudi Arabia.

Nowadays organizations enjoy the opportunity created by full access to global tal-ent pools, and are becoming aware of the increasing speed in innovation generated by more gender diversity. To outpace competitors and drive employee satisfaction, it is now even more critical to be able to attract and retain female talent.

To develop and empower the female leaders of tomorrow, CEOs and senior leaders should integrate gender diversity as a core part of the organization’s strategic objec-tives and ensure organization-wide communication and engagement. In particular, the commitment of middle management will be critical, as that is who engages ev-ery day with employees, and is responsible for performance assessments and pro-motions. Retention, advancement, and leadership-building are the key areas on which organizations should focus. Applying best practices in retaining talent, ensur-ing fairness and equal opportunities, removing any conscious or unconscious bias, and promoting role models are the key tools.

While cultural bias and labor regulations can still be an obsta-cle in some countries, they should not prevent organizations from building a diverse and inclusive environmentCultural bias and, in some cases, current labor regulations are a threat to inclusion and advancement to leadership positions. In many GCC countries, cultural bias still exists, and women are perceived as unsuitable for some jobs or positions. A way to cope with this constrained environment is to set quotas and targets for gender diver-sity and leadership. Regulations can also represent a barrier to gender diversity de-spite significant improvements in the past five to ten years. In these cases, it is even more crucial for CEOs and senior leaders to prioritize the push for regulatory change.

Some of the organizations interviewed by BCG have managed to overcome this problem by driving initiatives in certain departments only (for example retail bank-ing in financial institutions or support functions). This may however significantly restrict the pipeline of future female leaders, as they will not have been exposed to the core functions of the organization.

Particularly in Saudi Arabia, which had the largest gap to bridge, significant prog-ress has been made over the past few years. Over 60% of the employees of an ener-gy company in Saudi Arabia, when interviewed, recognized the progress made by their employer over the last one to three years in improving gender diversity at all levels of the company. The employees of the same company also recognized very limited obstacles are nowadays perceived in the recruitment and retention of fe-male talent.

In addition, the recent appointment of two female leaders in Saudi Arabia made the headlines in the region, with the first female chairperson heading Tadawul, the Saudi stock exchange, and the first woman executive director for the Dammam Air-


ports Company. The UAE has also been promoting female leadership with Emirates NBD Group appointing the first female CEO for its operations subsidiary.

IntroductionBCG’s research spans all six countries of the Gulf Cooperation Council. While each country is different, some rules and observations apply to all.

Exhibit 1, below, provides a contextual “starting point” for each of the countries mentioned in this report. Of all GCC countries, Qatar has the highest percentage of women in the labor force (51% of the female working-age population), almost com-parable to Western economies (57% in the US, 51% in the EU). In the UAE, Kuwait, and Bahrain between 39% and 46% of women are part of the labor force. The per-centage drops in Oman (29%) and Saudi Arabia (20%).

Almost all the GCC countries have experienced a significant improvement in wom-en’s participation in the labor force since 2000. Qatar and the UAE in particular have gone from (respectively) 38% to 51% and 34% to 46%. In Saudi Arabia and the UAE, the increase in women’s workforce participation has been accompanied by an increase in the female unemployment rate. This is partially driven by higher educa-tion attainment that was not matched by an increase in relevant opportunities in the labor market. According to UNESCO Institute for Statistics, the share of the fe-male population that completed upper secondary education in Saudi Arabia almost doubled from 23.5% in 2000 to 45.7% in 2014.This suggests that the increase in women’s education has successfully brought more women to the labor market, but the opportunities available to them did not grow comparably with the volume and the expectations of a better educated female population and the fields of education chosen were often not the ones most needed by the economy.

60

50

40

30

20

10

0

91%

9% 16%

Employed (% women in labor force) Unemployed (% women in labor force) Women participating in the labor force (% of female population)

2000

60

50

40

30

20

10

0

80%

20% 20% 20

14

6% 34%

94%

46%

91%

9%

1%

99%

44%

2%

98%

44%

23%

83%

17%

14%

86%

29%

38%

95%

5%

2%

98%

51%

35%

93%

7%

39%

93%

7%

Saudi Arabia UAE Kuwait Oman Qatar Bahrain

Female population

(Million) 13.4 2.4 1.6 1.5 0.6 0.5

Source: World Bank, World Development Indicators, 2000 - 2014.

Exhibit 1 | Women’s participation in the labor force and employment rate (2000, 2014)


BCG’s research reveals that most organizations in the GCC acknowledge the impor-tance of gender diversity and consider it a high priority. While this trend is gaining momentum across the GCC, there are significant differences across industries and countries. Only a few organizations have explicit and dedicated programs for gen-der diversity. The strength and depth of the programs also varies significantly. Based on BCG’s discussions with local organizations, the financial sector leads the way across all countries. Large organizations (such as oil companies) also show a high level of commitment on gender diversity matters.

Our analysis of around 15 of GCC’s most prominent organizations reveals how they have succeeded in designing an attractive working environment for women by of-fering a set of flexible arrangements, supportive policies, and an inclusive culture. It also suggests how organizations can change from a pleasant working environment to a place where women want to build their careers over the long run, by looking at how successful organizations have done so. Most importantly, the analysis identifies opportunities to fully embrace gender diversity by focusing on retention, advance-ment, and leadership-building. Finally, it reveals ways CEOs and senior leaders can overcome certain cultural biases and regulatory barriers (with a special focus on Saudi Arabia).

1. In the past few years, organizations across the GCC have suc-cessfully developed as attractive places to work for women and fostered an inclusive work environmentLarge organizations in the GCC have focused their gender diversity efforts on creat-ing an attractive place for women to work. Indeed, when asked about successful di-versity initiatives, most answers involved flexibility, policies, culture, and involve-ment in technical roles; and few involved senior leadership engagement and female empowerment, as the focus in the region has been mostly on increasing female par-ticipation in the labor force.

We interviewed CEOs and top executives (men and women) from 15 of the most prominent organizations. Participating organizations spanned several industries (financial services, oil and gas, public sector, and retail) and countries across the GCC (UAE, Oman, Saudi Arabia, Kuwait, Bah-rain). Some of the participants have also agreed to submit our survey to their employees.

Our interviews covered a wide range of topics to gauge the organizations’ positioning and the effectiveness of

their initiatives aimed at fostering gender diversity: from overall compa-ny engagement to successful and unsuccessful initiatives, as well as obstacles and targets.

We also gathered views on the organizations’ commitment in terms of time and resources across 11 types of initiatives covering leadership, culture, recruitment, retention, and advancement topics.

METHODOLOGY


a. Flexible working arrangements in different forms

As expected, many organizations mentioned family commitments and social ob-ligations as potential obstacles to gender diversity initiatives. More than in other parts of the world, GCC women may view their professional lives as a threat to their personal commitments.

Initiatives related to maternity are the most common. Some of the organizations provide -- beyond what prescribed for by the law -- one or two extra hours per day of leave for nursing and the opportunity to take unpaid leave.

Only a few organizations provide childcare facilities, whether on company prem-ises or externally and this is a powerful tool to attract and retain female talent.

In the UAE, the Ministry of Education requires any public sector entity which employs more than 50 women or whose female employees have in total at least 20 children, to offer childcare facilities.

Beyond maternity and childcare, many organizations offer flexible working ar-rangements to both women and men, including:

i. Flexible working hours: some hours in the day are set, others are flexible, so that the employee can choose between, for example, an earlier or a later start

ii. Opportunity to work from home

iii. Opportunity to request unpaid leave

These initiatives undeniably contribute to attracting more women (and men), however, they are only truly efficient if:

• Women can use them without being stigmatized

• Senior and strong performers who are considered role models use them as well

b. Inclusive culture and policies

All interviewed organizations confirmed having either policies or clear norms to ensure gender equality in remuneration and in the recruitment and selection process, as well as strict monitoring of their effective application.

Most organizations mentioned that they have strict anti-discrimination and an-ti-harassment norms. Any instance of harassment or discrimination is always es-calated to the highest management level and closely monitored. This makes women more comfortable and protected in the work environment.

Organizations with zero tolerance policies for harassment introduced additional successful formal and informal communication channels:

When asked about successful diversity initiatives, most answers involved flexibility, policies, culture, and involve-ment in technical roles; and few in-volved senior leader-ship engagement and female empower-ment, as the focus in the region has been mostly on increasing female participation in the labor force.


• Formal channels:

i. Hotline to report harassment cases anonymously

ii. E-mail address for anonymous complaints and recommendations

iii. Dedicated specialist in HR to deal with women’s issues

iv. Women’s or gender diversity events and programs to discuss and share issues

The most advanced organizations have also created dedicated internal pro-grams or associations where women can exchange views on careers and jobs (for example, Kuwait Petroleum Company’s Professional Women Networking and Abu Dhabi National Oil Company’s Women Network).

• Informal channels: Top management/CEO open door policy: In organizations where women are able to speak “openly and informally” with the senior leadership team, they feel more confident their issues are heard and taken seriously

Most organizations BCG interviewed strive for a culture where women are able to speak up, by creating a transparent work environment. For example, in one of the Saudi financial institution, the CEO meets regularly with ran-domly selected male and female staff members to informally discuss various topics, including gender diversity related topics. In the same institution, a “Women Awareness Program” has been put in place, in which HR calls dif-ferent female employees on a quarterly basis in order to explain their rights and discuss their concerns.

While most interviewed organizations highlighted their formal and informal channels as very effective and central to their organizations, some said partici-pation remains low and should be encouraged. In addition, most of these chan-nels are not at the same level as other strategic initiatives as reflected by a mini-mal or non-existent budget allocation. This prevents them from organizing large-scale events with better participation and more speakers.

c. Attracting women in technical and operational roles

In the organizations with the most inclusive and female-friendly environments, emphasis is put on creating “comfortable” conditions for working women. The definition of “comfort” differs across industries and therefore varies in rele-vance. In heavy industries such as oil and gas, the lack of “comfortable” condi-tions is a major obstacle to attracting women to technical and operational roles, as these jobs entail time spent on oil fields which are often located in remote onshore or offshore locations.

Some families are not supportive of women working at these remote sites. And some middle-managers are reluctant to hire and promote women to technical roles, fearing they will not be able to work on site and thus will lack exposure to

Organizations with zero tolerance poli-cies for harassment

introduced additional successful formal and informal communica-

tion channels.


operations deemed crucial for a full understanding of the business.

Below are examples of initiatives that some of the major oil companies have de-veloped to attract and promote women in technical and operational roles:

i. Launch ten-month rotation of women to field positions to earn relevant on-site experience

ii. Partner with secondary schools to inspire young girls to pursue STEM (Science, Technology, Engineering, and Mathematics) majors and consider careers in oil and gas

Oil and gas companies are ever more aware of the importance of attracting women to non-support roles. Initiatives are still nascent, but the interviewees are confident that they will help create more awareness of and appetite for op-erational positions, as confirmed by the pilots which have achieved great early results.

2. Organizations should now focus on how to go from an environ-ment where it is pleasant to work to a place where women get the same development opportunities as men and want to build their careers in the long run As mentioned in the previous chapter, in the past few years, CEOs and senior lead-ers in the GCC have been more and more conscious of the importance of gender di-versity in the workplace and have developed various measures to make organiza-tions attractive places for women to work. However, even though these initiatives contributed significantly to attracting talented women, they have, in general, not been sufficient to retain and increase female representation in senior leadership positions.

Exhibit 2 compares the share of women in leadership positions in the GCC with in-ternational benchmarks. The share ranges from around 6% in Saudi Arabia to around 22% in Bahrain. A wider gap is observed when looking at the number of GCC women sitting on Boards of Directors. All GCC countries lag significantly be-hind most Western countries in this measure.

Many organizations highlighted the presence of conscious and unconscious gender bias in evaluation and performance management, which may also affect women’s engagement in leadership positions. As has been observed elsewhere, there is strong reticence to promote women on potential, whereas leadership is often more willing to take a leap of faith with men.

In addition, while organizations in the GCC recognize the need to develop their high-potential employees for managerial roles, in most cases they don’t offer pro-grams customized by gender. Based on the interviews BCG conducted, there is a general belief that men and women should have access to the same training and development opportunities to ensure they have the same chances of success.

In heavy industries such as oil and gas, the lack of “comfort-able” conditions is a major obstacle to attracting women to technical and opera-tional roles, as these jobs entail time spent on oil fields which are often located in remote onshore or offshore locations.


3. Now is the time for organizations to fully embrace gender di-versity and set the ambition to develop the female leaders of to-morrowTo develop and empower the women who will be leaders of tomorrow, six actions should be taken: (a) Include gender diversity as a strategic objective; (b) Ensure en-gagement of the senior leadership and the middle management; (c) Foster retention of high potential women; (d) Promote development of women; (e) Advocate for fe-male leadership through the positive promotion of role models; (f ) Ensure fairness and remove any conscious and unconscious biases.

a. Including gender diversity as a strategic objective

Organizations should make gender diversity a core part of their strategic objec-tives and keep it at the top of the agenda. Interviewed organizations mentioned these successful efforts:

i. Embedding the gender diversity agenda in the organization values

ii. Explicitly mentioning gender diversity as a strategic objective

iii. Developing specific KPIs on gender diversity to be monitored regularly and reported to the top leadership and/or published in the organization’s sustain-ability report

iv. Adding women-related topics to the corporate social responsibility effort, for example, sponsoring a campaign for the awareness and prevention of breast cancer

Bahrain

UAE

Qatar

KSA

Kuwait

Oman

US

Germany

UK

Italy

Norway

France

Data not available

Board seats held by women in 2015 (%)1 Legislator, senior official, and manager posts held by women in 2015 (%)2

1The CS Gender 3000: The Reward for Change. Credit Suisse. September 2016 – Women’s careers in the GCC, The Pearl Initiative, 2015 2The Global Gender Gap Report 2016, World Economic Forum

Exhibit 2 | Participation of Women in Boards of Directors and Leader-ship positions, GCC and selected countries (2015)


b. Ensuring engagement of the senior leadership and the middle management

A major obstacle witnessed by many organizations was limited engagement of top management in gender diversity initiatives. Few leaders engage and commu-nicate internally on gender diversity. Consequently, middle management is gen-erally not well informed, creating a disconnect between the intentions of senior leadership and actual operations.

This is particularly true in heavy industries such as oil and gas, where promoting gender diversity faces even stronger and more pervasive biases and challenges. In the words of a GCC female manager in oil and gas, “Our industry is rough and tough. I consider myself one of the few lucky women who made it to this level. The key is to ensure buy-in from all the layers of the organization. CEOs and Executive Manag-ers are the only ones that can make this cultural change happen.”

c. Fostering retention of high-potential women

In order to significantly and sustainably foster high-potential women pursuing longer-term careers with current employers, organizations should adopt best practices by ensuring the organization is increasingly perceived as an attractive place for women to work. Two initiatives have proven particularly successful: (i) While it is critical to ensure the continuation and extension of flexible working arrangements by removing the stigma associated with them and making them available also to male employees (ii) It is also important to promote an inclusive culture and policies, leveraging both formal and informal channels.

d. Promoting development of women

Most of the interviewed organizations offer training and development initia-tives, but they are generally the same for both male and female employees. Pro-viding trainings dedicated to women, to help them to build on their strengths and overcome potential challenging areas, such as workshops on “mental tough-ness,” “how to speak up,” or “build your personal brand” have proven success-ful, as has instituting development programs aimed at women, such as leader-ship programs and networking events tailored to women.

e. Advocating for women in leadership through positive promotion of role models

The limited number of female role models in certain positions was also men-tioned as a major obstacle by interviewed organizations, and women themselves are often held responsible for the lack of role models. Listening to and being in-spired by other women is an effective way to gain confidence and increase suc-cess and further development.

CEOs and top management should push to promote successful women from in-side and outside the organization. Without senior leadership support, women will not be encouraged to act as role models. Making successful women from both inside and outside the organization visible can be done through attending global and regional conferences, presenting and representing the organization,

A major obstacle witnessed by many organizations was limited engagement of top management in gender diversity initiatives. Few leaders engage and communicate inter-nally on gender diversity. Consequent-ly, middle manage-ment is generally not well informed, creat-ing a disconnect between the inten-tions of senior leader-ship and actual opera-tions.


and displaying successful women’s achievements in press releases.

The focus on role models with the promotion of female CEOs and the inclusion of women in governments has achieved impressive results in the GCC. In Octo-ber 2008, the UAE’s first female judge was sworn in. HH Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE and Ruler of Abu Dhabi, said, “The in-volvement of women in Government has been evidenced with the appointment of a fe-male minister, the appointment of women to the Federal National Council, and now the appointment of the first female judge. The decision to appoint female judges helps consolidate Emirati women’s growing role in public life.”

The Dubai Women Establishment reports that, following this appointment, many more applications from Emirati women interested in pursuing this path were received. The same thing happened following the appointment of the first UAE female jet fighter in 2007, also the first woman in the UAE Air Force to lead a mission abroad in 2014.

f. Ensuring fairness and removal of conscious or unconscious biases

“Aimed at creating a sustainable future for the country, Bank Muscat provides excellent career opportunities and supports all major development programmes targeted at women who are assuming more responsibilities and senior positions.” Abdul Razak Ali Issa (Chief Executive, Bank Muscat)

Bank Muscat is a committed role model for gender diversity. Its success is due mainly to a good work-life balance maintained by employees (both men and women), a commit-ment to investing in women’s devel-opment, and a very clear and strong anti-harassment policy respected by the entire organization.

The bank provides a wide range of educational and training opportuni-ties inside and outside the Sultanate for women employees. It prides itself on attracting women without relying on quotas.

The bank’s attention to women is also reflected in its product offering: Zeinah is targeted to women custom-ers. This “feminine touch” in the product line also contributes to attracting and retaining women employees.

Bank Muscat in numbers:

• 48% of employees are women holding various positions

- 15% in senior leadership posi-tions

- 28% as department managers

• 62% of women are hired through the High Potential Graduate program

• 51% of women participate in learning and development programs

CASE STUDY - BANK MUSCAT


Another critical area is addressing the potential unconscious gender bias with leaders and managers in charge of evaluation and performance management processes. Tools to address this issue are: widespread communication of the gen-der diversity agenda, and organizing and conducting training aimed at male em-ployees, specifically for removing the bias in hiring women and for developing and promoting them.

A successful case of women’s development and empowerment in the region is Bank Muscat, where the profound (and widely communicated) engagement of senior leadership toward gender diversity and the provision of educational and training opportunities for its female employees have been critical to attracting and retaining female talent. (See Case study – Bank Muscat.)

4. Cultural bias and labor regulations can be major obstacles, but should not stop diversity ambitions and strategies The biggest obstacles to professional growth for women in the GCC lie in the areas of cultural bias, lack of supporting environment, and, in some countries, laws and regulations. Those elements represent an undeniable barrier to retaining women.

a. Cultural bias and lack of supporting environment

Cultural bias is a main obstacle to gender diversity in the workplace across most GCC countries (at different levels depending on the country). BCG’s research re-veals that there is still a predominant belief that women need to take care of the household and that they do not fit certain jobs, in particular technical and oper-ational roles which require traveling and spending time away from the family. Even the most advanced organizations with sophisticated measures on gender diversity find it difficult to overcome this cultural bias.

Organizations that have succeeded best in overcoming this bias are those in which the CEO sets specific targets or quotas for female employees and for rep-resentation in senior leadership positions. One financial institution in Saudi Ara-bia successfully set targets for both recruiting and retaining women. This en-abled it to reduce female turnover from almost 30% to 13% in 2015. In the same company, all women who took a parental leave returned to work after the leave.

BCG found GCC organizations are quite reluctant to set specific targets for wom-en’s recruitment and promotions. This goes, for most of them, against a princi-ple of meritocracy.

However, in an environment where there is still a cultural bias against women working in specific industries or roles, adopting quotas can be a winning strate-gy in the short term -- a way to jump the cultural bias barrier by “forcing” the trend. This should be done hand-in-hand with initiatives mentioned in the previ-ous chapters and is not effective as a standalone initiative. Many of the inter-viewed organizations view quotas as a way to establish a minimum female pres-ence in the organization and, once a minimum number is achieved, would prefer to remove them.

The focus on role models with the promotion of female CEOs and the inclu-sion of women in governments has achieved impressive results in the GCC.


In addition to organizations, governments have been active in promoting quotas. Norway, for example, introduced in 2003 a 40% gender quota for the Board of Directors of public, limited, state-owned, and inter-municipality companies. Leg-islated board quotas have been implemented, on listed and state-owned compa-nies, in Spain, France, Iceland, the Netherlands, Italy, and Belgium since then.

In Bahrain and the UAE, the debate over legislated board quotas has raised dif-ferent views. While the UAE Cabinet in 2012 enacted a law requiring listed com-panies and government agencies to reserve at least 30% of their board seats for women, the Bahrain Business Women Society declared recently that women in Bahrain have made it to leadership, both in public and private sector, without the help of quotas. Still, the Bahrain Business Women Society supports a legisla-tive quota to open even more opportunities to women in the country.

b. Regulatory barriers: the case of the Kingdom of Saudi Arabia

Saudi Arabia is a perfect example of a country where regulations shape gender diversity initiatives. Some organizations in Saudi Arabia have managed to push this “regulatory obstacle” as far as possible to improve gender diversity in the workplace. In the past few years, the government has set ambitious targets for women’s participation in the workforce and has loosened some of the labor laws related to working women. According to Vision 2030, 30% of women are ex-pected to participate in the labor force in 2030 (today it is around 20%). The per-ception of working women is also changing among employers and Saudi citizens in general.

Context Social media in KSA has been influential in creating role models and awareness of what Saudi women can do – this is true for GCC in general, but even more so in KSA. Due to the high penetration of smartphones with internet connections in the country (180 mobile broadband internet subscriptions per 100 people in 2014, according to the World Bank versus 147 in Singapore and 110 in the US), social media became the main communication tool; one that is less regulated and more accessible. Organizations are using social networks to promote their gender programs as well to attract more women.

Recent social changes (such as the urbanization of the Saudi society, and an in-creasing number of couples without children) and the rise of social media have been conducive to attracting more women to jobs.

Almost 18% of all women above age 15 are economically active (Exhibit 3), al-though the annual unemployment rate for women has been increasing at around 3% on average since 2006, as opposed to the declining unemployment rate for men (down 5% since 2006). Saudi women’s unemployment rate reached 34% in 2016 compared with 6% for Saudi men. The fact that more and more women have entered the labor force in the last few years in Saudi Arabia, with increasing levels of education, explains the increase in the unemployment rate, as the number of jobs available to women has not kept up with the growth in demand.

In Saudi Arabia, according to Vision

2030, 30% of women are expected to

participate in the labor force in 2030 (today it is around

20%). The perception of working women is

also changing among employers and Saudi

citizens in general.


Education has not been an obstacle for women in getting a job. Employers in GCC acknowledge that women are adequately educated to perform the required jobs. Students graduating from higher education institutions last year were 50% men and 50% women (KSA Ministry of Education data).

Among employees with bachelor’s degrees, there were more than half as many women as men, with around 544,000 women (versus 993,000 men) with degrees employed, representing 35% of all employees holding a bachelor’s degree. Across all other education levels, the number of employed males dominates the number of women. Part of the problem is the fields of education chosen by or available to women (such as humanities) are not necessarily the ones that pro-vide the jobs needed by the economy.

Regulatory barriersIn addition to the cultural bias, some regulatory barriers in the Saudi Labor Law may demotivate organizations to hire and retain more women. Those regula-tions are evolving significantly: cultural changes and mindsets are changing rap-idly, and regulation itself is much more open than it was a few years ago. How-ever, in some case, it can still be perceived as a major constraint for gender diversity.

The idea of working women is relatively new in KSA and is still emerging. In the past, Labor Laws were very strict about not mixing genders in the workplace. For example, women and men had separate entrances, elevators, hallways, and rooms. This discouraged employers from hiring women because doing so re-quired significant changes in working style and infrastructure. The cost of hav-ing dedicated spaces and structures for women was often mentioned as a barri-er for gender diversity in Saudi Arabia in the BCG interviews.

440

Unemployed Employed

Thousands of Saudi women (age 15 and above)

66%

836 1,275

Labor force

19%

5,454

34%

Total

81%

Out of the labor force

Source: Labor Force Survey, Q3 2016 – General Authority for Statistics – Saudi Arabia

Exhibit 3 | Saudi Women Labor Force (15+ years), latest official num-bers, Saudi citizens - 2016


The situation has evolved significantly, but gender segregation rules remain am-biguous. For instance, some organizations choose to have separate rooms for men and women, but employees can share the same elevator or use the same hallway. Officially, all organizations are required to have a women-only elevator, so that women may choose between that one and the “general access” one. And women themselves disagree about their rights. Some women feel more comfort-able when they are provided with dedicated facilities. Others perceive this as an-tithetical to an environment conducive to growth and development.

In addition to the ambiguous rules on gender mixing in the workplace, the La-bour Law in Saudi Arabia imposes other restrictions on working conditions for the organizations that employ women:

• It is prohibited to employ women in hazardous jobs or industries (such as construction and jobs requiring heavy lifting)

• Women may not work during the night or for the 11 hours around and including nighttime

• Women should be provided with space for resting

In order to encourage gender diversity despite those constraints, some organiza-tions limit their gender diversity efforts to specific business units or depart-ments as opposed to the entire organization. In those, they adjust the workplace to accommodate women. While this may increase the number of women in en-try-level positions, it restricts the advancement of women to leadership positions because of their limited exposure to the full range of functions in the organiza-tion.

Another challenge for both women and employers in Saudi Arabia is the lack of transportation options. By law, women are not allowed to drive; existing trans-portation options are limited and not accessible to all women and their cost of-ten discourages women from working. Most organizations committed to attract-ing female talent provide a transportation allowance to their employees. This, together with the emergence of ride-hailing services over the past three years (Careem and Uber), provides a viable and safe alternative for women.

While these regulations are still in place, and given the ambiguity of some ques-tions, CEOs and senior leaders in Saudi Arabia must set realistic yet ambitious targets and, where possible, invest to ensure ambiguity is limited as much as possible.

Gender diversity is an important topic for the senior leadership of all the or-ganizations BCG interviewed. In the past decade, most CEOs and decision-mak-

ers have focused their efforts on creating an attractive place for women to work. These measures have been successful and have contributed to growth in women’s participation across all countries.

Another challenge for both women and

employers in Saudi Arabia is the lack of

transportation options. By law, women are not

allowed to drive; existing transporta-

tion options are limited and not accessible to all

women and their cost often discourages

women from working.

Most organizations committed to attract-

ing female talent provide a transporta-

tion allowance to their employees. This,

together with the emergence of

ride-hailing services over the past three years (Careem and

Uber), provides a viable and safe alternative for

women.


Our study reveals that creating a pleasant working environment is not enough to develop senior female leaders in the long run and to attract the women for whom working conditions are not a key concern.

In a cultural and regulatory context that can be constraining, setting targets and quotas could be a successful short-term solution for CEOs. However, to achieve long-term changes at all levels and across all industries, CEOs must be committed to achieving those targets, to engaging with the entire organization, and to employing high-potential women at the top.

The six actions identified in the previous chapter could be leveraged by CEOs to achieve their respective organizations’ ambitions in gender diversity: (a) Include gender diversity as a strategic objective; (b) Ensure engagement of the senior lead-ership and middle management; (c) Foster retention of high potential women; (d) Promote development of women; (e) Advocate for female leadership through the positive promotion of role models; (f ) Ensure fairness and remove any conscious and unconscious biases.

In addition, the significant progress made over the past few years and the success-ful case studies we explored in this report suggest that organizations are able to set ambitious targets and achieve them , as long as their leaders and management are committed to making the change happen.


BCG wishes to thank the following organizations for participating in this study:

Al Rajhi Bank

Bank Muscat

Dubai Women Establishment

GCAM - General Commission for audiovisual Media

GIB Capital

Kuwait Petroleum Corporation

Majid Al Futtaim

Saudi Aramco

The Saudi Investment Bank

Other participating organizations chose not to be named


About the AuthorsJoerg Hildebrandt is a Senior Partner and Managing Director in the Dubai Office of The Boston Consulting Group. You may contact him by email at [email protected]

Leila Hoteit is a Partner and Managing Director in the Dubai Office of The Boston Consulting Group. You may contact her by email at [email protected]

Pamela Merlino is a Principal in the Dubai Office of The Boston Consulting Group. You may con-tact her by email at [email protected]

Anna Chiara Tortorella is a Consultant in the Dubai Office of The Boston Consulting Group. You may contact her by email at [email protected]

Beatrice Lemucchi is a Principal in the Dubai Office of The Boston Consulting Group. You may contact her by email at [email protected]

Wieske Heinen Elgun is a Principal in the Dubai Office of The Boston Consulting Group. You may contact her by email at [email protected]

Elsa Haddad is a Consultant in the Dubai Office of The Boston Consulting Group. You may con-tact her by email at [email protected]

AcknowledgmentsThe authors offer their sincere thanks to their BCG colleagues Alexander Tuerpitz, Bjorn Evers for their contribution to this report. They also thank Katie Davis for writing assistance, Kim Friedman and Tobias Zoellkau for design, editing and publishing contribution.

For Further ContactIf you would like to discuss this report please contact one of the authors.

To find the latest BCG content and register to receive e-alerts on this topic or others, please visit bcg.com. Follow The Boston Consulting Group on Facebook and Twitter.

© The Boston Consulting Group, Inc. 2017. All rights reserved.9/17

bcg.com

how organizations in the middle east can stretch their ......4 how organizations in the middle east...

Documents