How empowering women can benefit Central and Eastern Europe
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How empowering women
Win-win
can benefit Central and
Eastern Europe
Copyright © McKinsey & Company 2021
How empowering women
Win-win
can benefit Central and
Eastern Europe
Joanna Iszkowska Paweł Nawrocki
Kamila Kawecka Jurica Novak
Júlia Lázár Dániel Róna
Márta Matécsa Iva Štverková
About McKinsey & Company
McKinsey & Company is a global management consulting firm committed to
helping organizations create change. In more than 130 cities and 65 countries our
teams support clients across the private, public and social sectors. We help them
shape bold strategies, transform the way they work, embed technology where it
unlocks value and build capabilities to sustain change—not just any change, but
change that matters: for their organizations, their people and for society at large.
About McKinsey in Central Europe
McKinsey & Company opened its first offices in Central and Eastern Europe
in the early 1990s, soon after the momentous democratic changes that took
place across the region. We played an active role in the region's economic
rebirth, working with leading business organizations, governments and nonprofit
organizations. With offices in Belgrade, Bucharest, Budapest, Kyiv, Prague,
Warsaw and Zagreb, we serve clients across a wide range of industries, including
automotive, banking and insurance, retail, heavy industry, high tech, media and
telecommunications.
McKinsey research into diversity and inclusion
Over the past decade, McKinsey has invested around $20 million in research into
diversity and inclusion (D&I), publishing groundbreaking reports such as Diversity
wins (2020), The economic impact of closing the racial wealth gap (2019), the
annual Women in the Workplace study and the Power of Parity series (both since
2015). Our research demonstrates that diversity and inclusion go hand in hand
with business performance. Our own experience of cultural transformation also
informs our Diversity & Inclusion service line, which has advised clients since 2015
as they address relevant issues within their own organizations, using innovative
capabilities based on behavioral psychology, proprietary tools and technology-
driven solutions.
2
Contents Preface 4 Executive summary 7 Key numbers 12 Chapter 1: Benefits of gender parity in Central and Eastern Europe 15 Chapter 2: Gender parity in Central and Eastern Europe 25 Chapter 3: Reasons for modest progress in Central and Eastern 35 Europe Chapter 4: Accelerating women's empowerment in Central and 43 Eastern Europe Methodological appendix 54 Endnotes 56 About the authors 58 Win-win: How empowering women can benefit Central and Eastern Europe 3
Preface
This study investigates the topic of graduates. Yet, they make up just 45
gender equality in Central and Eastern percent of the labor force and even less
Europe (CEE), both in companies and in management positions. According to
more broadly within society. our analysis, closing the gender gap in
CEE could unlock as much as 146 billion
In recent publications, such as Digital
euro in annual GDP by 2030.
Challengers in the next normal,
our analysis has shown that CEE In the following pages we look at the
urgently needs to find new sources potential benefits of greater gender
of economic competitiveness. Other equality for businesses and for society
McKinsey research and that of many in general, identify barriers to progress,
other organizations has found that and pinpoint potential actions that
diversity and inclusion could be a could help shift the needle on equality.
source of competitiveness, driving
This study builds on earlier publications
economic growth and enabling better
by McKinsey & Company, in particular
performance by individual companies.
Diversity Wins, Women in the Work-
As fundamental European values, place, Women Matter, Women and
diversity and inclusion are the the Future of Work, and the Power of
subject of a range of European Union Parity series, also the Polish and Czech
legislation, covering topics varying reports in this series published in the
from gender equality and sexual local languages.
orientation to ethnic origin and
We would like to take this opportunity
disability.1 There are many aspects
to thank the authors of these publica-
of diversity and inclusion in the CEE
tions and the leaders of diversity
region where attention and additional
and inclusion at McKinsey for their
research may be needed, such as the
expertise, inspiration, and guidance.
inclusion of the LGBTQ+ community 2,3
Our particular thanks are due to Jess
and of millions of Roma people 4.
Huang (Partner, Silicon Valley), Lungile
In this study, however, our analysis Makhanya (Manager, London), Maria
focuses on the women’s empowerment del Mar Martinez Márquez (Senior
and the economic activity of the Partner, Madrid), Anu Madgavkar
approximately 67 million women in (Partner, New Jersey), Sandra Sancier-
seven countries in CEE: Croatia, the Sultan (Senior Partner, Paris), Julia
Czech Republic, Hungary, Poland, Sperling-Magro (Partner, Frankfurt)
Romania, Slovakia and Ukraine. Women and Alix de Zelicourt (Associate
account for 52 percent of the overall Partner, Paris).
population of these nations and more
Work on this report was led by Jurica
than 60 percent of all of university
Novak (McKinsey’s Managing Partner in
4 Win-win: How empowering women can benefit Central and Eastern Europe
Central Europe), Dániel Róna (Partner,
Budapest), Márta Matécsa (Associate
Partner, Budapest) and Paweł Nawrocki
(Associate Partner, Warsaw). These
individuals worked with a team consisting
of Kamila Kawecka, Júlia Lázár, and
Iva Štverková (Consultants), Joanna
Iszkowska (Head of Communications
in CEE) and Małgorzata Leśniewska
(Graphic Designer).
To validate our findings and act as
a sounding board for our insights,
we created a panel of CEE leaders
at McKinsey consisting of Eleonóra
Bacsó (Director, Diversity & Inclusion
in EMEA), Agnieszka Czabańska-
Zielińska (Associate, Warsaw), Gosia
Gontarz (Director of the Client Capability
Hub, Wrocław), Olga Gordusenko
(Senior Knowledge Expert, Kyiv),
Wojciech Kazanecki (Capabilities
and Insights Team Leader, Wrocław),
Martina Konecna (Diversity & Inclusion
Specialist, CEE), Evgenia Novikova
(Professional Development Manager,
CEE), Ivana Novosel (People Director,
CEE), Helena Šarkanova (Partner, Czech
Republic) and Ivana Valachovicova
(Manager, Prague). We are grateful for
their inspiration and guidance.
We would further like to express our
gratitude to the many executives and
experts from across the region who
shared their personal stories and
perspectives on gender parity, provided
insights and data, and helped advance
our thinking.
Win-win: How empowering women can benefit Central and Eastern Europe 5
6
Executive
summary
Since the transition to a market growth: closing the gender gap in the
economy three decades ago, Central workplace. In the seven CEE countries
and Eastern Europe (CEE) has enjoyed analyzed here—Croatia, the Czech
what many have called a golden age Republic, Hungary, Poland, Romania,
of growth. The region recorded an Slovakia, and Ukraine—women account
increase in per capita GDP of around for 52 percent of the overall population
110 percent in the 15 years between and more than 60 percent of college
2004 and 2019.5 However, the factors graduates. Yet, they make up just 45
driving that growth— such as labor- percent of the labor force.8
cost advantages and strong traditional
The reasons for this gap are complex,
industries—are now losing momentum.
but consider the impact: a significant
CEE needs to find new sources of
part of the population of CEE is failing
competitiveness.6
to realize its full potential contribution
In our recent publications we have to the region’s economy. That potential
investigated the case for digitization, contribution is huge, our research
automation, and a new focus on shows. According to our calculations,
sustainability.7 The current report stepping up efforts to close the gender
explores another promising source of gap in CEE could unlock as much as
Win-win: How empowering women can benefit Central and Eastern Europe 7
44%
€146 billion in annual GDP by 2030, individual companies.15 To confirm
or roughly the size of the economies that this correlation also applies to
of Slovakia and Croatia combined.9 companies in CEE, we augmented
That could put the region squarely data from a five-year global study by
of leading companies in CEE do not
back on a path to dynamic growth McKinsey that looked at more than
have a single woman in an executive
after the challenges of the COVID-19 1,000 large companies in 15 different
role
pandemic.10 countries by adding new information
from more than 200 major companies
Female empowerment unlocks in the Czech Republic, Hungary, and
value Poland. Our analysis of the entire
An additional €146 billion a year data pool revealed that companies
represents an 8 percent increase over with the greatest gender diversity
a business-as-usual scenario. Analysis in their executive teams have shown
by the McKinsey Global Institute above-average profitability 26 percent
(MGI) indicates that this extra GDP more often than those with the least
could be achieved with three factors: diverse executive teams or no female
greater participation of women in the representation at this level.
workforce, increased paid hours worked Further evidence for the value of
by women, and better representation closing the gender gap at a leadership
of women in high-productivity sectors.11 level comes from the McKinsey
A “full parity” scenario, where women Organizational Health Index (OHI),
match men across all three indicators, based on survey responses from
would more than double that impact. more than 1 million employees across
Increasing the participation of 350 companies.16 The OHI shows
women in the workforce would go a that workplaces with more women in
considerable way toward solving CEE's executive positions are characterized
expected labor shortage. The region by leadership styles and management
currently has 630,000 vacancies practices that are well suited to the
across its constituent countries.12 organizations of the future.17 That
If CEE returns to its pre-pandemic includes factors such as a more
(2010–19) growth rate, this vacancy open and trusting environment, a
rate could increase to more than two shared vision and clear purpose, and
million by 2030—less than the extra 2.5 supportive leaders who empower their
million women who would potentially employees.
join the workforce if countries in CEE
made efforts to close the gender gap.13 CEE started out strong, but
Moreover, the sectors expecting to progress has been modest
see the steepest increase in demand
Equality at work and equality in society
for new employees are healthcare and
go hand in hand. The MGI Gender
social work, retail and wholesale, and
Parity Score (GPS) looks at 15 different
manufacturing.14 Given that nearly half
indicators related to workplace and
the female labor force in CEE today
social factors, shedding light on where
works in one of these three sectors,
the greatest challenges lie.18 While
women are well positioned to fill a large
the CEE region scores well above the
proportion of these vacancies.
global average on gender equality
Improving the participation of women in in terms of its GPS, it trails Western
the workforce is only part of the value Europe and especially the Nordic
that gender parity can deliver, however. countries. The greatest inequalities
McKinsey research conducted over in CEE relate to leadership positions,
the last decade indicates that there unpaid work, legal protection, and
is a business case for diversity. For political representation. In this report
example, our studies have shown we focus on the first two areas: the
that a larger share of women in top underrepresentation of women in
management positions correlates leadership positions and the challenge
to better financial performance by of unpaid work placed upon them.
8 Win-win: How empowering women can benefit Central and Eastern EuropeAs mentioned above, women make after Western Europe and more
up more than 60 percent of college than two decades after the Nordic
graduates and 45 percent of the countries.23 While the progress has
workforce of CEE. Around 37 percent been modest, CEE has a high chance
of all managers are female.19 The of improving gender balance at the top
higher up the corporate hierarchy, executive level given the relatively high
the more evident the lack of gender percentage of women at managerial
equality. Thus, women hold 20 percent positions. This however, requires active
of executive roles in CEE and eight effort and commitment.
percent of CEO positions. 44 percent of
leading companies in CEE do not have Ambition is not a challenge
a single woman in an executive role.20 To find out why there are so few
This finding may be surprising because women in executive positions in CEE,
CEE is coming from a position of we surveyed more than 3,000 women
relative strength. In 2012, the share and men working at companies with
of female executives in CEE was 14 more than 500 employees in the Czech
percent, just one percentage point Republic, Hungary, and Poland. The
behind the Nordic countries and a results were as follows:
full five percentage points ahead of — Women are as ambitious as men,
Western Europe.21 Fast forward to but they perceive more barriers
2020, however, and the gap between to promotion. Men and women
CEE and the Nordic countries had showed almost the same level
grown sixfold, while Western countries of interest in getting promoted
had reduced the amount by which they (57 percent of women versus 56
trailed CEE to just three percentage percent of men). However, 28
points.22 The pace of change has percent of women said that their
differed significantly between the gender made it harder for them
various regions, and progress in CEE to secure a raise or a promotion.
has been modest. Indeed, if CEE And while 66 percent of men were
continues improving at its current confident that they could make it to
pace, it will be overtaken by Western the top leadership positions, only 62
Europe in 2028 and will not achieve percent of women thought that they
full parity until 2062—almost a decade could do so.
Stepping up efforts to close the
gender gap in CEE could unlock
as much as EUR 146 billion
in annual GDP by 2030. That
could put the region squarely
back on a path to dynamic
growth after the challenges
of the COVID-19 pandemic
Win-win: How empowering women can benefit Central and Eastern Europe 9— Women blame themselves, women provide daily unpaid care work
men blame others. Women who (looking after children, the elderly, or
thought that they were unlikely people with disabilities).24 This is twice
to make it to the top said it was as many as men. Essentially, female
because they lacked the necessary employees are still working a “double
skills (43 percent) or the right shift”.
leadership style (38 percent), or
that promotions to top executive COVID-19 has meant changes
positions were not based on merit The effects of the COVID-19 pandemic
(33 percent). When we asked men have meant that both women and
why they thought that they—men— men are now spending more time on
were unlikely to make it to the top, a household chores and unpaid care
far smaller proportion said that they work, as many employees and schools
lacked the necessary skills for the sent workers and children home to
job (eight percentage points less work and learn remotely. However,
than for women) and a much larger the increased burden has fallen more
share said that it was because on women than on men. More than
promotions were not based on 40 percent of female respondents
merit (ten percentage points more in our survey said that the pandemic
than for women). In other words, has meant that they are more likely
women are more likely to blame to consider scaling back on their paid
their own shortcomings for their work—reducing their working hours,
failure to become executives, while changing to a part-time role, switching
men are more likely to blame the to a less demanding job or leaving the
shortcomings of their company. workforce altogether, for instance.
For women with children under the
Unpaid work is a major age of ten the figure was as high as
barrier 54 percent. Interestingly, we found
In our survey of more than 3,000 the opposite pattern for men: just 25
employees, 27 percent of women gave percent of men with children under the
another reason for why they were age of ten said they considered scaling
unlikely to make it to the top: the lack of back, compared with 34 percent of men
work-life balance. Just one-fifth of men overall.25 It would appear that fathers
said the same. According to a 2018 with young children in CEE have not
survey by Eurostat, almost 70 percent felt pressured to cut down on their
of women in CEE perform household paid work so much, implying that their
chores daily, compared to 22 percent of female partners have shouldered the
men. In addition, nearly 40 percent of burden of scaling back for them.
Women make up more than
60 percent of college graduates
and 45 percent of the workforce
of CEE. Yet, just 37 percent
of all managers are female
10 Win-win: How empowering women can benefit Central and Eastern EuropeThe time to act is now in professional capability building,
Action to improve gender such as management training
representation in the work place in programs, and set up sponsorship
CEE could help the economy. As we schemes to help women, as well as
have seen, COVID-19 poses additional other underrepresented groups,
challenges. If the countries of CEE now move up the corporate ladder.
hope to return to the macroeconomic Special skills training courses and
growth trajectory that they were recruiting programs for women
enjoying prior to the pandemic and can help correct the gender
keep up with or even overtake their imbalance in specific industries.
peers in the rest of Europe, they may Complimentary efforts may also
need to consider how to course correct be needed to educate younger
the current imbalance. generations about their study and
career choices.
With this in mind, we have identified
four distinct areas that could help III. Work-life balance: Progress on
policy makers and businesses facilitate gender parity depends critically
gender parity: on women and men both being in
I. Shared vision: Closing the gender a position to balance their private
gap is a complex process, and and professional lives. Efforts could
governments and companies would be made to improve the availability
be well advised to take a structured of flexible work arrangements
approach. Ideally, this would include (part-time work, remote work,
formulating an aspiration, creating flexible working hours), introduce
an agenda of goals and actions or increase paternity leave,
addressing the gaps identified, and improve the availability of
and measuring and regularly affordable, high-quality childcare
communicating the progress. Broad services. In addition, companies
coalitions between the public and could strengthen their return-to-
private sectors can be especially work programs to help people
powerful here, as shown by the maintain networks, skills and
Chefsache26 initiative, a network of knowledge during periods of care
public and private-sector leaders leave.
in Germany committed to making
IV. Social norms and attitudes:
gender balance a top management
Shifting the cultural factors
priority, and the Champions of
underlying gender inequality is a
Change program in Australia27 and
complex undertaking. Our research
Poland.28
shows that ensuring that the
II. Career support schemes: To leaders of companies and public
bring more women into the labor institutions are visibly engaged
force and realize the goal of in efforts to reduce the gender
generating an additional €146 imbalance, rather than delegating
billion in annual GDP by 2030, this work to “diversity officers,”
special support schemes for can make a real difference.
underrepresented talent could The leadership should build an
be launched. Policymakers understanding of benefits their
could consider monitoring which organization can gain from having
industries are growing the fastest more diverse teams among
and which will be the most affected their employees and actively
by automation; they could then tackle gender stereotypes and
decide on that basis where best unconscious bias in recruiting and
to invest in vocational training promotions. Female role models at
schemes. Companies can invest the highest level are also essential.
Win-win: How empowering women can benefit Central and Eastern Europe 11CEE could add €146 billion a year to GDP by 2030 by tapping into
Key numbers women’s potential
Women’s contribution
to GDP in CEE, € billion
1,070
rio
ena
sc 846
ity
scen
ario +€146 billion
r
o n
pa
gi or 8.3% annual
ll- -re
t-in
Fu
s increase in GDP
Be
scenario
s-as-usual 700
Busines
550
2019 2030
2.5 million more Women able to work More women employed
women in the workforce ~2 paid hours more per week in most productive sectors
CEE lags behind on gender equality CEE businesses could
in society, while keeping up with benefit from higher gender
the rest of Europe on gender parity in leadership
equality at work positions
Gender Parity Score (GPS) Share of companies with above-average
profitability grouped by gender diversity
of executive team, 2019
Overall At work In society
0.73 0.70 0.75
CEE
+26%
Nordics 0.84 0.76 0.89
Western
0.76 0.67 0.82
Europe
World 0.61 0.52 0.67
Level of gender equality
High: 0.95–1
Medium: 0.75–0.94
Low: 0.50–0.74
Extremely low: 0–0.49
55% 44%
Companies with Companies with
more than 30% no female
female executives executivesWomen are underrepresented in leadership positions, despite Higher than CEE
a high share of labor force and graduates Lower than CEE
Female representation along the corporate ladder in CEE Western Nordics
% Europe
Male Female
CEOs 92 8
Executives 81 19 16 25
Managers 63 37 32 36
Labor participation 55 45 47 48
Tertiary education graduates 39 61 57 63
CEE is coming from a strong position, but the modest progress in
female executive representation will likely take away the advantage
Change, Full
Average female representation in executive positions 2012–20, parity
%, 2012–20 and extrapolated pp achieved
40 Nordics 11.1 2039
0.0
0.2
0.4
0.6
0.8
1.0
35
Western
30 Europe 8.5 2053
6.4 pp
25
CEE 24%
6.3 2062
20
Western Europe
15 2.6 pp may overtake
1.6 pp
CEE in 2028
10
4.8 pp If it continues at this
pace, CEE could
5 achieve full parity
Forecast in 4 decades!
0
2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Women are as ambitious as men, but they perceive more barriers
to promotion
Share of women and men who want to… Share of those who want to become a
n = 3,082 top executive yet consider it unlikely
n = 1,110
... get promoted ... become a top
executive
56% 57% 66%
36% 30%
62%
Women
Men
Men Women
Source: McKinsey Global Institute analysis; Diversity Matters dataset; OECD; Eurostat; Ukrstat; UNDP Ukraine; McKinsey CEE Diversity Survey, 2021; company
annual reports; company websites14
1
Benefits of gender
parity in Central and
Eastern Europe
Since the transition to a market competitiveness: closing the gender
economy three decades ago, Central gap. In the seven CEE countries
and Eastern Europe (CEE) has enjoyed analyzed here—Croatia, the Czech
what many have called a golden age Republic, Hungary, Poland, Romania,
of growth. The region recorded an Slovakia, and Ukraine—women
increase in per capita GDP of around account for 52 percent of the overall
110 percent in the fifteen years population and more than 60 percent
between 2004 and 2019.29 However, of college graduates. Yet, they make
the factors driving that growth—such up just 45 percent of the labor force.32
as labor-cost advantages and strong A significant part of the population
traditional industries—are now losing of CEE is thus failing to realize its full
momentum. CEE needs to find new potential contribution to the region’s
sources of competitiveness.30 economy.
In our recent publications we have Research led by McKinsey and many
investigated the case for digitization, other institutions has indicated
automation, and a new focus on that narrowing the gender gap has
sustainability.31 The current report a number of advantages for entire
explores another promising source of economies, societies, and individual
Win-win: How empowering women can benefit Central and Eastern Europe 15companies. Not only does it benefit Impact on the economy
a country’s economy, it also helps The McKinsey Global Institute Power
address challenges such as the aging of Parity publication series models the
population and shortages in the labor contribution of women to individual
force. In addition, our research shows countries’ GDP. It focuses on three
that at the level of individual companies, main indicators: female population
having a higher proportion of women and labor participation, total hours
on the leadership team correlates worked (based on the employment
with improved financial performance. rate and the average weekly hours of
Not only that, companies with more paid work by men and women), and
diverse executive teams tend to average productivity (meaning the GDP
embody a variety of leadership styles contribution per worker) of the sectors
and practices and benefit from greater in which men and women work.33
agility, putting them in a superior
position to cope with the challenges of According to the MGI model, women
tomorrow’s workplace. In this report, currently contribute around 40 percent
we validate these findings for Central of GDP in the CEE region. This is
and Eastern Europe, we look at CEE- higher than the global average of 36
specific barriers to greater gender percent (Exhibit 1) and the average
equality, and we provide region-specific for Western Europe (38 percent) and
recommendations. the Nordic countries (38 percent).
Exhibit 1
Women’s contribution to GDP ranges from 38–43 percent across CEE, slightly above the
global average of 36 percent.
GDP in 20191 Women's share
%, € billion2 of labor force
Female Male
World 36 64 73,220 42%
Czech Republic 38 62 209 45%
Western Europe 38 62 15,025 46%
Nordics 38 62 1,576 47%
Poland 39 61 559 44%
Romania 39 61 208 43%
CEE 40 60 1,384 45%
Croatia 41 59 55 46%
Hungary 41 59 143 45%
Slovakia 41 59 98 45%
Ukraine 43 57 112 47%
36%
Global average
1
Contribution to GDP by gender for each country is based on the most recent population data, labor force participation
rate, employment rate, hours worked and productivity per broad sector.
2
All calculations are based on real GDP values at $ 2014 base for the years 2000–30, using the latest $–€ conversion
rate (0.83).
Source: IHS; ILO; national statistical agencies; Oxford Economics; World Input/Output Database; McKinsey Global
Institute analysis; McKinsey Global Growth Model
16 Win-win: How empowering women can benefit Central and Eastern EuropeHowever, women also account for in-region scenario, and a full-parity
around 45 percent of the labor force scenario (Exhibit 2).
in CEE—a higher percentage than In the business-as-usual scenario, we
their contribution to the region’s GDP. assume until 2030 labor participation,
At a country level, Ukraine has the hours worked and change in the
highest female contribution to GDP (43 sector mix of employment will follow
percent), while the Czech Republic has consensus forecasts and historical
the lowest (38 percent), despite the trends in each country, with women’s
fact that 45 percent of the Czech labor current contribution to GDP remaining
force is female. This disparity between roughly the same in 2030.
the share of women in the labor force
In the best-in-region scenario, we
and their contribution to GDP is due
assume that in the period to 2030,
to a number of factors, including the
labor participation, hours worked, and
fact that women work fewer paid hours
change in sector mix of employment
than men, their employment rates are
will grow at the level of the country
different, and a disproportionately large
with the fastest historical growth rate
proportion of women work in lower-
for each of these three parameters.35
productivity sectors—all areas that
In this scenario, the region’s annual
CEE countries would be well advised to
GDP would increase by €146 billion
address going forward.
by the year 2030—an 8.3 percent
To get a clearer picture of the potential improvement on the business-as-usual
impact of improving gender parity scenario. This represents an uplift
in CEE, we developed a specific roughly the size of the entire 2019 GDP
methodology for use in this report. Our of Slovakia and Croatia combined.
approach allows us to model the impact The main driver of this potential
of improving gender parity in three key improvement would be the increase in
areas: labor participation, hours worked female labor participation, which would
and the sector mix of employment account for 39 percent of the impact on
for men and women (that is, the GDP, followed by 35 percent from the
representation within each sector, improved sector mix, so the shifting of
and the average productivity of those women into work in higher-productivity
sectors).34 Using these parameters, sectors, and around 26 percent from
we posit three potential scenarios: a the increase in the number of paid
business-as-usual scenario, a best- hours worked by women.36
€146bn
additional GDP could be
achieved in the best-in-region
scenario, yielding up to the
level of 2019 GDP of Slovakia
and Croatia combined
Win-win: How empowering women can benefit Central and Eastern Europe 17Exhibit 2
CEE could add €146 billion a year to GDP by 2030 by tapping
into women’s potential.
Women’s contribution to GDP in CEE, The additional
€ billion €146 billion would
1,070 come from 3 factors
2.5 million more
women in the
o workforce
i
ar
en
sc
846
+146 billion
ty
o
nari
ari
sce
ll-p
on or 8.3% annual
egi Women able to
n-r
Fu
i increase in GDP
st- work ~2 hours
Be more per week
al scenario
siness-as-usu 700
Bu
550
More women
employed in most
2019 2030 productive sectors
Source: IHS; ILO; national statistical agencies; Oxford Economics; World Input/Output Database; McKinsey Global
Institute analysis; McKinsey Global Growth Model
In the best-in-region scenario, 2030—a 9.2 percent improvement on
female labor participation rises from the business-as-usual scenario. The
48 percent in 2030 (business-as-usual next biggest beneficiaries would be
scenario) to 52 percent. This equates to Romania (an 8.7 percent additional
approximately 2.5 million more women GDP) and Slovakia (8.6 percent), with
in the workforce. In addition, female the Czech Republic (7.8 percent) and
working hours increase from around Hungary (7.6 percent) falling slightly
38 hours per week to around 40 hours below the regional average. The
per week, the equivalent of around two smallest improvement would be seen in
additional paid work hours per week Ukraine (6.4 percent) and Croatia (5.6
per woman. Female representation percent). In the case of Ukraine, this
in higher-productivity industrial and is likely due to the country’s stronger
service sectors (for example, utilities, starting point in terms of female
manufacturing, financial services, labor participation and hours worked.
real estate, or public administration) Croatia, on the other hand, has the
is also greater, and the employment highest rate of historical growth in the
rate of women is around one percent region for female labor participation
higher than in the business-as-usual among 25- to 54-year-olds and better
scenario.37 sector mix in any case, resulting in a
smaller relative increase in GDP in our
At a country level, the economic impact
projections.
varies across countries. Poland would
see the biggest improvement in our While an additional €146 billion in GDP
best-in-region scenario, enjoying in the best-in-region scenario might
an additional €66 billion of GDP in seem difficult to attain, it is in fact just
18 Win-win: How empowering women can benefit Central and Eastern EuropeExhibit 3
Best-in-region scenario could add €146 billion a year to GDP by 2030, an 8.3 percent
improvement on the business-as-usual scenario.
Extra annual GDP
% gain in GDP vs business-as-usual1 by 2030, € billion2
From an increase
World 8.9 8,646 From a change in the labor-force
in sector mix participation rate
CEE 8.3 146
Poland 9.2 66
35% 39%
Romania 8.7 24
Slovakia 8.6 11
Czech Republic 7.8 20 26%
Hungary 7.6 14
From an increase in
Ukraine 5.8 9 the paid hours
worked
Croatia 5.1 4
Note: Numbers may not sum due to rounding.
1
In the best-in-region scenario, the female-to-male rate for each factor (labor force participation, number of paid
working hours, sector mix) is adjusted to the highest level found among CEE countries. A similar methodology is
used in the MGI global Power of Parity report from 2015 and regional Power of Parity from 2015–20.
2
All calculations are based on real GDP values at $ 2014 base for the years 2000–30, using the latest $–€
conversion rate (0.83).
Source: IHS; ILO; national statistical agencies; Oxford Economics; World Input/Output Database; McKinsey Global
Institute analysis; McKinsey Global Growth Model
a fraction of what could be achieved contribution to GDP would additionally
in a full-parity scenario. According to require the burden of household
our analysis, this scenario could result chores and unpaid care work to be
in an annual increase in GDP of €370 shared more equitably between men
billion—a 21 percent improvement on and women, freeing women to engage
GDP in 2030 on the business-as-usual in higher-paid professions. CEE
scenario. The female contribution countries would also be well-advised
to the region’s GDP could even to implement policies on the “demand
potentially surpass that of men’s, as side,” for example targeting job creation
women account for a larger share of efforts to women specifically.
the population. As we acknowledge,
In the meantime, according to our
achieving full parity would be difficult
research, activating women could be
to reach in CEE within the next decade,
a solution to labor shortages across
and so we take the best-in-region
the CEE region. In the last quarter
scenario as the target ambition level for
of 2019 around 630,000 positions
the region.
were unfilled in Croatia, the Czech
Women could solve the labor Republic, Hungary, Poland, Romania,
shortage Slovakia, and Ukraine.38 This compares
It is important to note that all three to just 215,000 vacant posts nearly
of our scenarios focus exclusively on a decade earlier in 2010. Of these
the “supply side” of the labor market, vacancies, about 62 percent were in
meaning the number of women the broader service sector, a further 35
available for paid work. Righting the percent were in industrial sectors (for
gender balance in the workforce and example, manufacturing, construction,
Win-win: How empowering women can benefit Central and Eastern Europe 19energy, and utilities) and 3 percent in for by three sub-sectors: healthcare and
agriculture. The subsectors accounting social assistance, manufacturing, and
for the largest share of these vacancies retail and wholesale trade.39 Due to the
were services (such as transportation aging population and growing need for
and storage, accommodation and care staff, vacancies in the healthcare
food service, real estate, and other sector are expected to increase
service activities), manufacturing, fast. In 2019, women represented an
wholesale and retail trade, public overwhelming share (81 percent) of
sector and education, and healthcare. people employed in this sector in CEE.
Assuming the same rate of growth Women also accounted for over half
as in the years prior to the COVID-19 (55 percent) of people employed in
pandemic, the number of all unfilled the wholesale and retail sectors, and
jobs could reach around 2.3 million by more than one-third of those working
2030 in the region. Increasing female in manufacturing—areas that are also
labor participation and women’s share expected to see a strong increase in
in higher-productivity sectors could new jobs. These three sub-sectors
therefore represent an important part already accounted for a considerable
of the solution. share of the vacancies in CEE in 2019,
and given that nearly half of the female
Research by MGI into the future of workforce in CEE works in one of these
women at work finds that a majority three subsectors, women are clearly
of the global job gains for women well positioned to fill a considerable
expected through 2030 are accounted share of these vacancies.
Exhibit 4
Services, thepublic sector, and manufacturing are theindustries with the most women.
The first two are dominated by women, the last one is 65 percent male.
Share of men and women in different industries, Share of Jobs
%1 the female Share of potentially
workforce per vacancies displaced by
industry, % 1 in 2019, % automation, % 2
Male Female
Industries Healthcare and social work 19 81 12 6 41
dominated by
women Public sector & education3 36 64 20 8 36
Financial & insurance
services 39 61 3 1 40
Industries Wholesale & retail trade 45 55 16 10 61
with equal
representation Services4 50 50 21 34 58
Industries Manufacturing 65 35 17 22 23
dominated by
men Information &
68 32 2 3 12
communication
Agriculture 69 31 6 3 12
Energy & utilities 76 24 1 2 27
Mining and
quarrying 85 15 1 0 N/A
Construction 93 7 1 11 61
1
Data includes Croatia, Czech Republic, Hungary, Poland, Romania, Slovakia.
2
Based on the findings of the McKinsey report “Digital Challengers in the next normal: Central and Eastern Europe on a path to digitally-led growth,”
October 2020, McKinsey.com.
3
Includes public administration and defense, compulsory social security; activities of extraterritorial organizations and bodies; and education.
4
Includes transportation and storage; accommodation and food service activities; real estate activities; professional, scientific, and technical activities,
administrative and support service activities; arts, entertainment, and recreation; activities of domestic personnel and other service activities.
Source: Eurostat and Ukrstat statistics, 2019
20 Win-win: How empowering women can benefit Central and Eastern EuropeHowever, McKinsey’s “Digital Diversity and inclusion (D&I) practices,
Challengers in the next normal” including gender-related initiatives,
publication shows that some of these are becoming increasingly prevalent
sectors also score considerably high in today’s business world. However,
in terms of the share of jobs that could not all organizations have already
potentially be displaced by automation mastered D&I. Common pitfalls can
in the future, with around 60 percent include an incomplete understanding of
of wholesale and retail jobs, and 40 the underlying principles, an excessive
percent of healthcare and social- focus on short-term outcomes,
work jobs expected to be affected by and overreliance on piecemeal
advancing technologies.40 Therefore, commitments.
in order to achieve the potential
Clearly, it is essential that companies—
economic impact and to account for
at all levels of the organization —
the technological changes altering the
understand the positive impact of
nature of work and the types of jobs
increased gender parity. Evidence
in demand, both short and long-term
suggests that good leaders will
solutions would be required.
typically ensure that those benefits
In the short term, CEE countries are clear to everyone within their
would need to make investments for organization as part of their change
providing incentives and training, management programs. Below, we look
in order to increase the share of at key aspects of that positive impact
women in industries of moderately on business.
high productivity and high expected
The business case for diversity
job gains, such as manufacturing,
McKinsey research conducted over
healthcare, and wholesale and retail.
more than a decade proves that there
In the long term, the education of girls is a business case for diversity globally
and women should increasingly target and in many regions of the world. To
sectors that are expected to be less substantiate this claim for Central
affected by job displacement through and Eastern Europe, we built on data
automation, and which already account from a five-year study by McKinsey
for a relatively lower share of the that looked at more than 1,200 large
female workforce, such as information companies in 18 different countries with
technology and telecommunications, new CEE region information from 223
financial services, utilities, and public major companies in the Czech Republic,
administration. Governments would Hungary, and Poland.41 We examined the
need to invest in education and correlation between gender diversity
vocational training, as technological on companies’ executive teams and
advances are increasingly altering the financial performance. Our analysis
nature of work and the types of jobs in revealed that the best-performing
demand. Therefore, incentivizing and companies in terms of gender diversity
supporting women to make the shift among their executive teams (top
would not only create more gender- quartile) have shown above-average
balanced workplaces and increase profitability 26 percent more often
parity in economic output, but would than companies with the least gender
also be key to preparing for future diversity on their executive teams
changes in the job market. (bottom quartile) (Exhibit 5).42
We also found that the same top quartile
Impact on organizations is 12 percent more likely to experience
Besides the overall benefits to the above-average profitability when
economy, gender parity also brings compared to all companies in our sample
added value to organizations. In (second, third, and fourth quartiles).
the following section we review the Moreover, there is an even bigger
ways these benefits translate into disadvantage for the companies are at
tangible advantages for companies the bottom: companies that lag the most
and increase their likelihood of better on gender diversity on their executive
financial overperformance. teams (fourth quartile) were 19 percent
Win-win: How empowering women can benefit Central and Eastern Europe 21Exhibit 5 less likely to outperform financially than
CEE businesses could benefit from higher gender all the others (first, second, and third
parity in leadership positions. quartiles). These findings also held true
when we assessed gender diversity on
supervisory boards. We acknowledge,
however, that diversity on boards on
it’s own is not enough. The corporate
Share of companies with above-average profitability grouped by
culture should also be inclusive so that
gender diversity of executive team1 , 20192
diverse individuals can stay and thrive.
%
Impact on organization health and
culture
+26% Additionally, increasing the number
of women in leadership positions has
potential benefits that go beyond
improved financial performance. In our
2018 report “Women and the Future
of Work,” we discuss how women’s
leadership styles tend to align with the
agile workplace of the future.43 This
leads us to identify four key tasks for
future leaders.44 They are:
— to foster cooperation and
collaboration, acting as an
“integrator” within organizational
networks. This is in line with the
notion of “breaking silos” and
creating more cross-functional
teams
— to empower employees to make
important decisions and to
be accountable for them—this
is pivotal to flattening steep
organizational structures, increasing
ownership among employees, and
creating more autonomous teams
— to be more transparent about key
55 44 strategic shifts and their purpose
so that the organization shares
Companies with more Companies with
than 30% female no female a common goal and vision—this
executives executives can increase engagement and
instill a sense of belonging among
employees
In our sample of more than 1,200 companies, firms with a more — to build ecosystems based on
gender-diverse leadership team were more often showing above- business partnerships rather
average financial performance. than focusing solely on internal
Companies at the bottom (no women on executive team) are 19% less capabilities and services—this
often outperforming the market financially. helps create compelling end-to-end
solutions for customers and enables
companies to capture a larger share
1
Compared to national industry median; p-valuerespondents from 56 companies by contrast, more often rely on
around the globe measuring overall innovating from the top (top-down
organizational health.45 The OHI innovation, rank difference: 29),
shows that companies with a higher building a performance-driven
proportion of women in leadership culture (performance transparency,
positions employ management rank difference: 20; consequence
practices that are better aligned with management, rank difference: 20),
the future needs of organizations and standardizing knowledge and
(Exhibit 6). Those practices include a processes (process-based capabilities,
more employee-centric approach rank difference: 24).
to communication, engaging and
The evidence is clear that increased
supporting colleagues (open and
gender parity at the executive level
trusting environments, rank difference:
is correlated with better financial
29; supportive leadership practices,
performance. Naturally, that is not to
rank difference: 29; consultative
say that women’s leadership style and
leadership, rank difference: 21; and
values are better than those of men.
personal ownership, rank difference:
Rather, the true potential of diversity
18), creating a clear purpose and
and gender parity lies in giving those
compelling vision of the future
differing styles and values an equal
(shared vision practice, rank difference:
voice in the running of the company.
21), and building strong business
Bringing additional and more diverse
partnerships (business partnerships
perspectives into decision making
practice, rank difference: 33).
results in a stronger, more resilient and
Companies with the lowest flexible organization that is fit for the
level of female representation, future.
Exhibit 6
Greater gender parity also helps align leadership styles to the changing demands of the
workplace.
Employee ranking of management practices in companies Practices with largest rank differences in
with high and low share of female leaders employee ranking (>15) 3 between top and
bottom quartiles
(1 = highest ranking, 40 = lowest ranking)
Ranking of management practices in firms with high share of female leaders (top quartile1)
1
Shared vision Business
Future- partnerships
Consultative Supportive 5
oriented leadership Open and
management leadership
More trusting 10
traditional practices Talent Personal
management development ownerships
Performance 15
practices
contracts Government Professional
Performance & community standards 20
transparency relations
People perfor-
Customer
mance review 25
Consequence focus
Inspirational
management 30
leaders
Process based
Top down capabilities Operational Role 35
innovation management clarity
40
1 5 10 15 20 25 30 35 40
Ranking of management practices in firms with low share of female leaders (bottom quartile2)
1
Top quartile: companies in the top quartile in proportion of women in leadership positions.
2
Bottom quartile: companies in the bottom quartile in proportion of women in leadership positions.
3
Each of the 37 managerial practices (that impact a company's financial and operating performance) is ranked according to its
level of importance in the company. The highlighted practices are the ones showing the largest ranking difference between the
two groups (more than 15 ranking grades between top and bottom quartile companies, in absolute values of rank difference).
Source: McKinsey, Organization Health Index database
Win-win: How empowering women can benefit Central and Eastern Europe 2324 Win-win: How empowering women can benefit Central and Eastern Europe
2
Gender parity in
Central and Eastern
Europe
Following its emergence from the Soviet parity is true or not. We also present
Bloc in early 90s, CEE faced the task of findings from our own study of more
catching up with the West economically. than 360 companies in CEE, as part of
CEE countries are still generally which we examined those companies’
viewed as being at a disadvantage top management teams to determine
as compared to the West given their the level of female representation. We
past of planned economies. However, start by assessing the state of gender
this same history does not appear to parity in CEE compared with other
apply to the question of gender parity. regions in Europe and the rest of the
In our interviews, business leaders in world, before turning to the question of
CEE often mentioned that countries in female representation at different levels
the region are in fact more equal than of the corporate hierarchy.
others today due to CEE’s history of
women at work. Gender Parity Score
In this chapter, we present a series of In Chapter 1 we looked at the size of
macroeconomic analyses to determine the gender gap in economic terms.
whether the notion that CEE countries However, this is just the tip of the
are more advanced in terms of gender iceberg. To give a fuller picture, we
Win-win: How empowering women can benefit Central and Eastern Europe 25used a Gender Parity Score (GPS), a parity, but some are doing better than
metric first used in a global study of ten others. Poland stands out from its peers
regions and 95 countries carried out by with an overall score of 0.77, followed
the McKinsey Global Institute, to further by Slovakia (0.74), Ukraine and Romania
assess the gap.46 The GPS measures (both 0.72), and Hungary, Croatia, and
how far a country has traveled along the the Czech Republic (all at 0.70). In terms
road to gender parity, with a GPS of 1.00 of equality in the workplace, Poland,
representing full gender parity. Viewed Ukraine, and Hungary are in the lead.
through this lens, our analyses show that In terms of equality in society, Poland,
CEE has not improved as fast as the rest Slovakia, and Romania are ahead.
of Europe, and that key discrepancies lie
Gender equality at work
in societal factors.
Looking more closely at the situation
A country’s GPS is based on 15 in the workplace, we find that CEE as
indicators across four dimensions. The a whole scores 1.0 for the indicators
first dimension is gender equality at “formal employment” and “female-to-
work, which is driven by the choices that male ratio in professional and technical
women (and men) make about their lives jobs.” This implies full equality, both
and work. The other three dimensions across the region and in individual
relate to gender equality in society: countries (Exhibit 7).49 By contrast,
essential services and enablers of “leadership positions” and “unpaid
economic opportunity, legal protection work” show low levels of equality.
and political voice, and physical security Yet, although the region’s rate of 0.61
and autonomy. These three factors are for leadership positions is low, it is
necessary for people of all genders to still higher than in Northern Europe
have access to the resources needed to (0.54) and Western Europe (0.46).50
live a life of their own making. Previous Additionally, women in CEE spend more
McKinsey Power of Parity reports on time doing unpaid care work (looking
different countries and regions have after children and the elderly) than
established a clear link between gender women in the Nordic countries, but the
equality at work and in society: almost amount is similar to that of women in
no countries exist that have high gender Western European countries. A smaller
equality in society but low gender share of women in leadership positions
equality at work, and vice versa.47 is usually regarded as a key symptom
of gender inequality, while women
In the coming pages we focus on the doing the larger share of housework
seven CEE countries—Poland, the and unpaid care work is seen as one
Czech Republic, Slovakia, Hungary, of the causes of that inequality. In the
Romania, Croatia, and Ukraine.48 In following section, we examine women’s
2019, the overall GPS of the CEE region career progression in more detail; in
was 0.73, indicating medium-level Chapter 3 we look at unpaid work and
gender equality (Exhibit 7). This is well other barriers to equality.
above the world average of 0.61, and
Gender equality in society
puts CEE in fourth place globally, just
Where CEE clearly trails its northern and
below the Nordic countries (0.84),
western neighbors is on gender equality
North America and Oceania (0.76) and
in society. The region’s overall score of
Western Europe (0.76). This means that
0.75 here is below both the scores of
CEE can realistically aspire to close the
Northern Europe (0.89) and Western
gap and become an example for others
Europe (0.82), with the most substantial
to follow. However, between 2015 and
gap in the dimension of “legal protection
2019, CEE’s score improved just by
and political voice.” This dimension is
0.02 percentage points, which is slower
based on two specific indicators, of which
progress than in other parts of Europe
“political representation” is the source of
(0.03), although slightly faster than the
the problem: of the 15 indicators included
global improvement (0.01).
in the GPS, political representation is the
All the countries of CEE have some way only one where CEE shows “extremely
to go before they achieve full gender low equality.” The average share of
26 Win-win: How empowering women can benefit Central and Eastern EuropeExhibit 7
CEE trails European countries on gender equality in society, while keeping up with the
rest of Europe on gender equality at work.
Level of gender equality
High 0.95–1 0.90–0.94 Medium Low 0.50–0.74 Extremely low 0–0.49
0.85–0.89
0.80–0.84
0.75–0.79
Gender equality at work1 Gender equality in society
Essential
services
Overall and ena- Legal
Overall Labor- Professio- gender blers of protection Physical
Female Overall gender force- Formal nal and Unpaid Leader- equality economic and security
population, gender equality participa- employ- technical care ship in opportu- political and
million equality at work tion rate ment jobs work positions society nity2 voice3 autonomy4
Croatia 2.1 0.70 0.64 0.79 1.00 1.00 0.50 0.41 0.74 0.86 0.47 0.98
Czech
5.3 0.70 0.61 0.77 1.00 0.95 0.50 0.33 0.76 0.91 0.49 0.98
Republic
Hungary 5.1 0.70 0.72 0.74 1.00 1.00 0.54 0.65 0.70 0.87 0.36 0.96
Poland 19.6 0.77 0.73 0.75 1.00 1.00 0.55 0.70 0.79 0.92 0.55 0.99
Romania 10.1 0.72 0.63 0.70 1.00 1.00 0.47 0.43 0.78 0.94 0.51 0.95
Slovakia 2.8 0.74 0.66 0.77 1.00 1.00 0.50 0.49 0.78 0.93 0.53 0.96
Ukraine 24.1 0.72 0.72 0.81 1.00 1.00 0.50 0.70 0.72 0.93 0.38 0.93
CEE 69.0 0.73 0.70 0.76 1.00 1.00 0.53 0.61 0.75 0.92 0.46 0.96
Western
201.0 0.76 0.67 0.82 0.99 0.95 0.54 0.46 0.82 0.90 0.65 0.97
Europe
Nordics 13.0 0.84 0.76 0.91 1.00 1.00 0.73 0.54 0.89 0.92 0.82 0.97
Note: The Gender Parity Score (GPS) measures distance from parity. Color coding is illustrative and based on actual, not rounded, values. All GPS
calculations are conducted using a sum-of-squares method with equal weighting across indicators for the year 2019. Numbers are rounded to two
decimal places.
1
Comprising labour-force participation, professional and technical jobs, perceived wage gap for similar work, leadership positions, and unpaid care work
2
Comprising unmet need for family planning, maternal mortality, education, financial inclusion, and digital inclusion.
3
Comprising political representation and a legal protection index (including, for example, legislation protecting against domestic violence, providing equal
inheritance rights and paternity or parental leave, and mandating non-discrimination in hiring).
4
Comprising sex ratio at birth, child marriage, and violence against women.
Source: McKinsey Global Institute
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