The purpose of this section of the SG2X Playbook, which we call the Employee Handbook, is to provide SME entrepreneurs, executives and managers (collectively “management”) with a tool to house and implement their HR policies. Do not let the term “gender-smart” lead you to believe that this is only for women-owned companies or policies for women. As you will learn, building a gender-smart business offers shareholders significant advantages. Unfortunately, most management teams either do not know about or refuse to adopt these policies despite the overwhelming evidence that, if done correctly, the company will achieve superior results.
WHAT IS THE SG2X PLAYBOOK EMPLOYEE HANDBOOK?
In the SG2X Playbook, we aim to guide SME owners through a process that helps them make the right, strategic choices that will help their company grow. This begins with strong HR policies that entrepreneurs and executives tailor to their company’s specific needs and then actually use to create a high-performing culture and workforce.
Please note, this document is not an exhaustive list of policies and others may need to be included in your company’s Employee Handbook based on the needs of the company or the laws of the country in which it operates. Rather, this is a template.
We use the term “Employee Handbook” to mean a tool a company uses to communicate and implement its HR policies. The reality is that most employees and managers never read the dense HR policies – who has the time? But they are very important. So, the Employee Handbook summarizes them, and then provides guidance about how the policies are actually implemented on a day-to-day basis. The Employee Handbook should be given to all new employees when they are hired, and updated and reviewed periodically. Employees use the handbook to understand their rights, and managers use the handbook to protect their employees and ensure everyone understands the rules and policies that govern how people work at the company.
Poor management is one of greatest barriers that holds companies back from growing, but it is also one of the areas SME entrepreneurs and executives have the most control over and ability to change. By adopting and implementing this Employee Handbook and policies, entrepreneurs and executives can take a huge step away from being an SME and towards becoming a worldclass company.
INTRODUCTION TO THE SG2X PLAYBOOK EMPLOYEE HANDBOOK
We begin the SG2X Playbook with a focus on human capital and human resource (HR) management. We have learned that one of the greatest barriers to growth that keeps SME stuck in the “missing middle” is not a lack of financial capital, but a lack of quality human capital. While access to capital is certainly a barrier for many SMEs, we have found that when SMEs do obtain a loan or an equity investment, entrepreneurs and executives would rather use those funds to purchase physical assets or raw materials. Most entrepreneurs and executives fear that if they invest and train their best performers, those employees will leave them or, worse, become their competitor. While some turnover and employee issues are unavoidable, we have found that SME owners consistently under-invest in their human capital.
Management should seek guidance from their fund managers or lawyers before adopting the policy language or linked policy templates included below. Most importantly, managers should understand the policies in plain language so that they could describe them to an outsider, such
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We believe that a key factor that drives the success of an SME is people management. And because women make up 50% of the market and in many cases 50% of the workforce, having a people management strategy that is intentionally designed to be “gender-smart” is simply a smarter way of doing business. And while we all may think we do not have biases towards different sexes, think again. One of the reasons why women are underrepresented in leadership positions or face discrimination in hiring and promotions is unconscious biases in decisionmaking. Gender-smart policies can help to illuminate and address unconscious bias and promote equality in employee recruitment and progression. Thus, before you read any further, we want to make sure that you, as either an SME manager (or fund manager), truly understand the importance of why adopting and implementing gender-smart policies are so important. Below, we’ve outlined some key facts and figures that will not only support but will drive your company to support gender equality and women’s economic empowerment.i
WHY IS THE SG2X PLAYBOOK EMPLOYEE HANDBOOK IMPORTANT?
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SG2X EMPLOYEE as a potential investor or a future hire. Understanding these policies in plain language will also help you develop unique strategies to implement the policies, which could make your company stand out amongst its competitors. Our aim is that by using the policy language and templates, you can save time and money and focus on the important task at hand: adoption of the policies so that your company will be able to realize improved employee satisfaction and create an environment for sustainability and growth. Adoption into your company’s culture is the real work in achieving gender equality within your company (and for fund managers to achieve it within their portfolios). We provide some strategies and ideas below to help you get inspired, and we hope you will dedicate the time and resources to make it happen in your organization.
Women are more likely to express interest in an organization and perceive it as fair when women are highly represented in top management positions.
Companies with higher levels of gender diversity and with HR policies and practices that focus on gender diversity are linked to lower levels of employee turnover.
Women experience less discrimination and sexual harassment in inclusive workplace cultures. On average, 34% of women employees experience sexual harassment in the workplace, which not only deeply affects their lives, but also negatively impacts the company’s overall performance and culture. a. Further, this is one of the biggest risks for investors and fund managers under their due diligence criteria and screening – the existence of discrimination and sexual harassment will make or break a decision on whether to invest in a company or trigger disciplinary action/penalties for existing investee companies that could lead to divestment.
WHY ARE THEY IMPORTANT?
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Employee experiences of inclusion contribute to engagement and retention - 35% of an employee’s emotional investment to their work and 20% of their desire to stay at their organization is linked to feelings of inclusion.
Create a Positive Work Culture and Increase Employee Productivity
Gender diverse corporate boards are associated with fewer financial reporting mistakes and controversial business practices such as fraud and earnings manipulation.
Companies rated in the top quartile for ethnic/cultural diversity on executive teams were 33% more likely to have industry-leading profitability.
THE IMPORTANCE OF ADOPTING GENDER-SMART POLICIES AND BUILDNG A GENDER-SMART WORKFORCE
Paid family leave offers clear advantages to both employers and families. A study by the Institute for Women's Policy Research found that paid family leave helps employers because it can increase employee morale, productivity, and labor force attachment once new parents (particularly mothers) return to work.
Engage a Wider Customer Base In general, women either make or influence up to 80% of household buying decisions.
Increase Company Revenue and Profit and Reduce Costs
Access a Wider Pool of Investment Capital Impact investors, including DFIs, are investing in companies and SME portfolios that can demonstrate a commitment to gender equality through
When employees feel both included and that their employer supports diversity, they report experiencing trust and increased engagement at work.
HOW DOES ADOPTION MAKE A DIFFERENCE?
Attract Top Talent and Retain Employees
Companies rated in the top quartile for gender diversity on executive teams are 21% more likely to outperform on profitability and 27% more likely to have superior value creation.
Diversity is a key ingredient for better decision-making among teams –while homogenous groups may be susceptible to groupthink, diverse teams can leverage a greater variety of perspectives and are likely to consider information more thoroughly and accurately.
Diverse management teams are innovative and earn a premium for their innovation - companies with higher diversity in management earn 38% more of their revenues, on average, from innovative products and services than those companies with lower diversity.
A 10% increase in perceptions of inclusion improves absenteeism, adding nearly one day a year in work attendance per employee.
HOW TO USE THE SG2X PLAYBOOK EMPLOYEE HANDBOOK
SG2X EMPLOYEE HANDBOOK | 4 pools of capital earmarked for gender-lens investing. Through the 2X Challenge alone, more than $4.5B in capital has been committed to gender-lens investing.
1. Read through the Employee Handbook language and linked policy templates (below).
3. Convene a working group of four to six employees, ideally 50% men and women from different areas of the company, to review and discuss the HR policies identified as needing an upgrade or missing. Then, ask them to prepare a list of questions and recommendations that management will review when designing the fulsome HR policy.
2. Analyze existing policies and levels of adoption within your company (see the immediate next section on how to do this).
To use this Employee Handbook template, the SME manager should:
4. Hold a working session with management to update the Employee Handbook based on the working group’s feedback.
6. Prepare a roll-out plan to share with employees and staff, as well as a monitoring plan to ensure key policies are being implemented.
HOW TO ANALYZE YOUR CURRENT HR POLICIES
5. Hire a local lawyer to review and approve the draft Employee Handbook.
To analyze existing policies and level of adoption within your organization, we recommend managers use one of the following scorecards or frameworks. These can be daunting and overwhelming. So, to help you, we have put the page number in of where you can find the scorecard in the document. If you want more information on the background of these tools, we suggest you read the entire document.
The SG2X Playbook Employee Handbook is designed to help a company quickly and smartly adopt best practices in HR management and gender equality. Light on theory, heavy on practical implementation, this handbook should be reviewed, then customized based on the company’s size, sector and specific laws in the country in which it operates.
SEAF Gender Equality Scorecard: investors, including fund managers and development finance institutions (DFIs) use this tool to assess investee companies (potential and existing), and SMEs use this tool to benchmark their performance against key areas and identify priorities for growth. See Safe & Healthy Workplace Environment (pages 56-57) for the relevant assessment questions and scoring instructions.
GEM Framework Full Assessment: MEDA’s GEM Framework has an extensive assessment, a part of which evaluates the presence of gender-smart practices and policies. Given that the assessment collects a range of information and seeks to understand employee and manager opinions, MEDA recommends that it is conducted by a capacity builder with gender; environmental, social, and governance (ESG) and
SG2X EMPLOYEE HANDBOOK | 5 business experience who is less likely to be skewed by gender and other biases. The Full Assessment instructions start on page 33 of the framework with the Interview Tool starting on page 51 of the framework.
The Women's Empowerment Principles Gender Gap Analysis Tool: this online assessment helps companies identify strengths, gaps, and opportunities to improve their performance on gender equality. Developed by the United Nations and IDB Invest, the assessment questions are based on real-life company practice, international standards, and indicators.
i The language included in this section was sourced from Deloitte, Catalyst and McKinsey