The State of Women in Business
Women across all levels of organizations are switching jobs, leaving, and starting companies at the highest rates we’ve ever seen, and ambitious young (the Next Gen) women are prepared to do the same.
To make meaningful and sustainable progress toward gender equality, companies need to go beyond table stakes. (“Women in the Workplace 2022 report from McKinsey & Co., in partnership with LeanIn.org)
We’re seeing serious implications for companies because women are already significantly underrepresented from Manager on up the ladder.
For years, fewer women have risen through the ranks because of the “broken rung” at the first step up to management. Now, companies are struggling to hold onto the relatively few women leaders they have, and all of these dynamics are even more pronounced for women of color.
One reason for women leaving? PAY DISPARITY!
In a collaborative survey between Bizwomen.com and The Business Journals found that only 54% of women say compensation has kept pace with inflation. By contrast, about 60% of men said their pay has kept pace with inflation.
When asked to identify the top-of-mind concerns for women in the workplace today, pay equity was one of the top choices, along with respect & equality, child care, work-life balance, career advancement, compensation, and opportunity.
With regard to hard DOLLAR compensation…
Only about 36% of women said their company provided compensation packages higher than average for their area or industry — compared to 51% of men. 68% of women said their companies provided monetary bonus or incentive programs, compared to 78% of men. (The Business Journals Research)
“The vast majority of companies in the U.S. aren’t disclosing whether they’re analyzing the gender pay gap among their employees, and even fewer are publicly sharing what that gap is.”Bloomberg, March 2022
So, what does this mean for future women in business?
The factors that prompt current women leaders to leave their companies are even more important to the next generation of women leaders.
Young women care deeply about the opportunity to advance as more than two-thirds of women under 30 want to be senior leaders. Young women are also more likely than current women leaders to say they’re increasingly prioritizing flexibility and company commitment to well-being and DEI&B.
Companies that don’t take action may struggle to recruit and retain the next generation of women leaders. Plus, the Next Gen is watching senior women leave for better opportunities (starting their own businesses and joining more diverse leadership teams at startups), and they’re prepared to do the same.
The State of Women in Leadership
Despite modest gains in representation over the last five years, women— and especially women of color— are still dramatically underrepresented in corporate America. And this is especially true in senior leadership where only one in four C-suite leaders is a woman, and only one in 20 is a woman of color.
This lack of representation is causing two main pipeline problems:
1. The “broken rung” remains unfixed.
For the 8th consecutive year, a broken rung at the first step up from associate to manager is holding women back.
For every 100 men who are promoted from entry-level roles to manager positions, only 87 women are promoted, and only 82 women of color are promoted.
Results? Men significantly outnumber women at the manager level, and women can never catch up from both from a title (authority / gravitas) AND wealth accumulation upon retirement perspective.
Because enough women aren’t making it past the first rung, there are simply too few women to promote to senior leadership positions.
2. More women leaders are leaving their companies.
Now, companies have an additional pipeline problem…. Women leaders are leaving their companies at the highest rate we’ve ever seen.
For every woman at the Director level who gets promoted to the next level, two women directors are choosing to leave their company leaving fewer and fewer “mentorship / sponsorship” examples to younger women.
What’s the Case for Action on these Fronts?
Addressing gender inequality in leadership is not just a moral imperative… It can also lead to wider benefits.
There is a bottom-line business case for improving diversity in senior management and on corporate boards:
- Companies with at least 1 female director generated, on average, 3.5% higher returns on equity than those with 0 female leaders.
- Companies with more than 15% female senior managers had 50% higher profitability compared to those with less than 10% female managers.
- Having more women in leadership position contributes to better corporate governance and firm performance.
Yet, women’s leadership skills are currently underutilized across all capital markets.
Women represent only a small fraction of the individuals making the financial decisions that impact domestic and global economies. This under-utilization leads to inefficiencies and missed opportunities in the market.
Women’s financial leadership leads to more innovation, stronger investment returns, and accelerated economic growth. And, years of research and data indicates that more diversity in leadership brings additional talented people into company decision rooms, investment committee meetings, and public policy forums.
What are Women’s Unique Perspectives?
Women tend to prioritize long-term outcomes and take on risk in a different way than men.
Women bring distinct types of innovation and creativity to problem-solving because they directly experience (i.e. make the buying decisions around) the impact of the challenges that need to be addressed.
Women tend to exhibit collaborative network leadership styles that are well suited to our changing global economy.
When all members of the business community prioritize companies and investments that place female talent at the table, demand for women board directors and C-Suite executives will grow.
This state will drive pay equity at the top and throughout organizations and will generate a bigger pipeline of talent in middle and lower management and universities leading to an increased demand for female fund managers and entrepreneurs who bring untapped venture capital to the hands of more female innovators and disruptors.
Which in turn will result in product development, services, and strategies that cost-effectively meet the needs of all.
When women sit at the table, we ALL benefit… The social, environmental, and economic benefits are clear… Women make “the pie” bigger for all of us.
(For more information, see the “Resources” links to the right of this post)