Women’s Empowerment and Its Economic Impact

Part 6: Necessity to Transform Corporate Culture at the Same Time

Consulting Fellow, RIETI

In 2013, the OECD reported that Japanese women have high levels of proficiency in literacy and numeracy but low rates of participation in the labor force, representing an underutilized resource of skill. The report states that Japanese employers do not appear to be making the best use of their workforce's competencies. With the working-age population dwindling, it is essential to promote the inclusion of women in labor force. What kinds of companies are linking women's empowerment to their business performance?

Recent studies have shown that merely introducing WLB-oriented systems would not boost corporate performance, but that reviewing gender-equality measures and the mechanism of human resource evaluation/remunerations at the same time would improve business performance in the long term. Needless to say, WLB measures including the parenting leave system and shorter working hours are important in helping women to stay in the workforce. However, some say that these programs have the downside of preventing women from building up sufficient experiences to be selected for managerial or decision-making positions.

There are initiatives that may appear to be counter to the concept of WLB but are actually designed to help women assume greater work responsibility. This includes the cases of companies reducing the parenting leave from three years to one year due to a low ratio of leave claimants returning to work afterwards. Some companies that are helping women returning to work after parenting leave envisage their future career path in seminars, so as to encourage them to use the shorter working hours program only as needed, rather than almost universally post parenting leave prior to that. Other companies have discontinued the exemption of female employees with small children from late-time or weekend shifts.

When Norway made it obligatory for listed companies to increase the ratio of female directors to at least 40%, the share values of applicable companies plummeted, keeping their corporate value low over several years. Companies wishing to improve their business performance through women's empowerment should not only increase the number of female employees, managers, and directors, but also adopt WLB measures while changing the HR evaluation/remuneration systems and corporate culture at the same time. In order to change corporate culture, government and corporate leaders must continue to express their "commitment" to changing Japanese people's working styles and promoting women's empowerment.

>> Original text in Japanese

* Translated by RIETI.

August 29, 2016 Nihon Keizai Shimbun

September 29, 2016

Article(s) by this author