Productivity potential of the female workforce

The role of women in unlocking Australia’s productivity potential

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The broad business benefits of greater female workforce participation are well documented. Women are a much needed addition to Australia’s labour force, not just making up numbers, but bringing valuable skills and diversity of thought.

Now, new research from the Pulse suggests an additional factor: women in flexible roles (part-time, contract or casual) appear to be the most productive members of our workforce.

Women in flexible roles waste only 11.1%, compared to an average of 14.5% for the rest of the working population. Given 43.2% of women in the workforce work part-time, compared to 13.5% of men4, this translates into an important productivity bonus that few employers recognise.

Thanks to these more productive flexible workers, the Pulse found that collectively Australian and New Zealand workers could save at least $1.4 billion5 on wasted wages by employing more productive female employees in flexible roles.

In essence, flexible work is about an employee and an employer making changes to when, where and how a person will work to better meet individual and business needs.

Doing it well results in a massive productivity potential across the female workforce.

In an average year, these women effectively deliver an extra week and a half of productive work, simply by using their time more wisely. In other words, for every 71 women employed in flexible roles, an organisation gains a productivity bonus of one additional full-time employee.

The study shows that the biggest drain on female time is ‘work that is not used’ or low value non-impactful work. The next biggest drain on female time is ‘waiting for other people’ — which is also the biggest drain on male time.

Flexible work practices boost productivity

The Pulse found that women with a high level of job flexibility: waste less time, are more productive and have more clarity over their career direction. Women in the age group of 20 to 34, who consider they have high flexibility assess they have 13% unproductive time whereas women who assess they have a low level of flexibility assess they have 19% unproductive time. And for this age group, of those women who consider they have high flexibility, 64% have a clear career direction, whereas of those who consider they have low flexibility, only 10% have a clear career direction.

This is in sharp contrast to common assumptions about women in flexible roles, who are often accused of ‘not pulling their weight’ and can be excluded from communications about what is happening in the organisation or from receiving invitations to events.

Rating of flexibility women feel they have at work (high/medium/low)

EY - Rating of flexibility women feel they have at work (high/medium/low)

Source: Ernst & Young Productivity Pulse Wave 3 data

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Rating of flexibility women feel they have at work (high/medium/low)

EY - Rating of flexibility women feel they have at work (high/medium/low)

As a priority, organisations should introduce or expand flexible work options to attract and retain highly motivated, productive women. There is a risk that women in flexible roles are sidelined from career-making roles, opportunities and promotion rather than being rewarded for their increased productivity. Shouldn’t they, at the very least, be put on an even footing with their less productive full-time colleagues?

Reducing pressure on the public purse

Currently, women are poorly placed to fund their retirement, with 38% having no superannuation savings and the median superannuation accumulations for those who do being $17,2256. If women earn more, either by working longer hours or in higher value jobs, they will end their working lives with higher levels of superannuation savings, reducing their reliance on the age pension and other benefits.

One of the biggest hurdles for women trying to accumulate sufficient super is the penalty of the interrupted work patterns often required by mothers7. For example, a 32 year old woman leaving the workforce for two years to care for young children, and intending to retire at age 65, will reduce her superannuation savings by the following amounts:

a. $65,000 salary = $28,000 Superannuation debt
b. $85,000 = $36,500 Superannuation debt
c. $115,000 salary = $50,000 Superannuation debt8

Given this, increasing workforce participation is a key mechanism to secure retirement incomes for women. By working an additional three years across working life, women have the potential to accrue $237,000 of additional income at today’s average earning rates9.

Based on:

  • Australian Treasury’s 2010 Intergenerational report cost estimates of age pension provision in 2010 and 2050
  • FaCHSIA 2013 Pension Review Background Paper

4 ABS, Jan 2012 Cat: 4125.0, Gender Indicators Australia
5 Further analysis of Ernst & Young Australian Productivity Pulse™ Wave 3, November 2012
6 ABS Cat: 4125.0 - Gender Indicators, Australia, Jan 2013
7 Suncorp-ASFA, (2012). Suncorpo-ASFA Super Attitudes Survey, Suncorp-ASFA, 1-16
8 Comparisons were made to a 32 year old woman, who has the same salary and super balance, and takes no time out of the workforce. This assumes parental leave is taken from ages 32-33, and retirement is at age 65.
9 6302.0 - Average Weekly Earnings, Australia, Nov 2012