Despite the common belief that women are risk-averse, research has shown that women are just as likely to take risks as men - they do it in their own way. Therefore, the myth that women are more risk-averse than men is untrue and can also be harmful in perpetuating gender stereotypes that limit women's opportunities in the workplace.
The study published in Psychology of Women Quarterly found "no evidence" for gender differences in risk-taking at work. These findings starkly contrast with previous studies that found women were more unlikely to be risk-takers.
Women are just as likely to take risks as men, and they are also just as likely to succeed or fail when taking those risks. The only difference is that women tend to be more calculated in their risks, while men tend to be more impulsive.
Women take risks differently
There are many ways that women and men approach risk. For example, some research has suggested that women are more likely to take risks when they perceive the potential rewards to be higher than the potential costs, while men are more likely to take risks when they perceive the potential costs to be lower than the potential rewards.
Whatever the cause of these differences, it is clear that they exist and can have significant consequences on how women are perceived and promoted at work.
Research from Boston University found that the idea that "women are more risk-averse than men" is a metaphysical claim that refers to unobservable qualities or traits. When we examine the research literature, we must consider the potential for generic beliefs and statements to mislead us, the correct way to interpret statistical findings, and the detectable size of differences and similarities. Given these factors, whether statements like this should play a role in empirical science that aims for objectivity is uncertain.
Accepting such claims is based more on confirmation bias than actual evidence.
Women take calculated, strategic risks
Women take risks, but they are often more calculated and strategic in their approach than men, which is better for organisations. They are also more likely to seek input from others before deciding. Women tend to be more risk-averse than men overall, but this does not mean that they cannot or do not take risks. It simply means that they approach risk differently.
Women take risks every day of their lives. The risk of pregnancy alone is staggering. Consider how many women are entrepreneurs. Therefore, to claim that women are universally risk-averse would be a gross misrepresentation.
The case for women in leadership
There is a growing body of evidence that diversity in teams drives profitability. For example, a study by McKinsey & Company found that companies in the top quartile of gender diversity on executive teams were 25 percent more likely to experience above-average profitability than peer companies in the fourth quartile. Another study found that ethnically diverse companies are 35% more likely to have higher than average profitability.
There are several reasons why diversity is good for business:
- It leads to better decision-making. Studies have shown that diverse teams make better decisions because they consider a broader range of perspectives.
- Diversity fosters creativity and innovation. When people with different backgrounds and experiences come together, they bring other ideas and perspectives to the table, which leads to new and innovative solutions.
- A more diverse workforce helps an organization tap into new markets and better understand the needs of its customers.
- Companies with diverse employees can better understand and relate to the needs of their diverse customer base.
So why aren't more companies taking advantage of the benefits of diversity? One reason may be that some leaders mistakenly believe women are less capable than men regarding risk-taking leadership. The research shows this couldn't be further from the truth.
In conclusion
Women are often seen as risk-averse, a negative bias impacting their career trajectory. However, as evidenced by various studies, women can be just as capable of taking risks in pursuit of their goals and ambitions. Furthermore, they assess risk differently than men, considering the potential reward and consequences when making decisions. This shows that women are not only capable of taking risks but also have unique perspectives on them – perspectives which should be respected and embraced.
Let RecruitMyMom help you build a diverse team by partnering with you to find the best candidates for your diversity strategy. Please contact us to have a one-on-one discussion.
