Since the transition to a market economy three decades ago, Central and Eastern Europe (CEE) has enjoyed what many have called a golden age of growth. However, the factors propelling that growth—such as labor-cost advantages and strong traditional industries—are losing momentum, and the region needs to find new sources of competitiveness.
Our recent study Win-win: How empowering women can benefit Central and Eastern Europe explores one promising source of growth: closing the gender gap in the workplace. Women account for 52 percent of the overall population in the seven CEE countries we analyzed and more than 60 percent of college graduates. Yet they make up just 45 percent of the labor force.
Our research found that stepping up efforts to close the gender gap in CEE could unlock as much as €146 billion in annual GDP by 2030 (Exhibit 1)—an 8 percent increase over a business-as-usual scenario. This could put the region squarely back on a path to dynamic growth following the COVID-19 pandemic.
The benefits of gender equality
Increasing the participation of women in the workforce would go a significant way towards solving CEE’s labor shortage. The region currently has 630,000 job vacancies across its constituent countries, and if it returns to its prepandemic (2010–19) growth rate, this rate could increase to more than two million by 2030. This gap would be more than filled by the extra 2.5 million women who would potentially join the workforce if countries in CEE made efforts to close the gender gap. Moreover, the sectors expecting to see the steepest increase in demand for new employees are healthcare and social work, retail and wholesale, and manufacturing. Given that nearly half the female labor force in CEE today works in one of these three sectors, women are well positioned to fill a large proportion of these vacancies.
Improving the participation of women in the workforce is only part of the value that gender parity can deliver, however. McKinsey research conducted over the past decade indicates there is a business case for diversity. For example, our studies have shown a larger share of women in top management positions correlates to better financial performance by individual companies.
To confirm that this correlation also applies to companies in CEE, we augmented data from a five-year global study by McKinsey that looked at more than 1,000 large companies in 15 different countries by adding new information from more than 200 major companies in the Czech Republic , Hungary, and Poland. Our analysis of the entire data pool revealed companies with the greatest gender diversity in their executive teams were 26 percent more likely to experience above-average profitability than those with the least diverse executive teams or no female representation at this level.