by Nitya Bodavala
According to a 2022 study by McKinsey and LeanIn.org that surveyed more than 40,000 employees, women hold 40% of entry-level positions but only 26% of C-Suite positions. The higher you go on the corporate ladder, the fewer women you see. For every woman at the director level that gets promoted, two female directors choose to leave the company. The case for more women in leadership positions is evident in the value that female leaders bring. The 2022 study found that companies with more women on their boards invest more in innovation, have higher company performance, and de-risk by contributing more to CSR (Corporate Social Responsibility) and ESG (Environmental Social and Governance). Overall, workforce equality in participation, recognition, and pay would make the world economy $28.4 trillion richer.
Why Are Women Leaving the Workplace?
There are three main reasons why women have been leaving the workplace by droves: (1) lack of pay and recognition, (2) toxic work cultures, and (3) lack of choices.
Unrecognized Work
Although women in leadership do more than their male counterparts to promote Diversity, Equity, and Inclusion (DEI) in the workplace and support employee well-being, they are recognized less for their efforts. Employee satisfaction and DEI efforts retain employees and attract new talent. By 2025, 47% of millennials will actively seek diversity in a potential workplace. With the next generation of leadership actively seeking diversity in the workplace, these policies and initiatives make a huge difference in attracting and retaining top talent. However, the time and energy spent on these efforts are not factored into women’s performance reviews and do not help them advance their careers. Further, women still make only 86 cents for every dollar a man makes, while black women make even less, at 68 cents for every dollar a man makes.
Toxic Work Culture
An MIT Sloan Management Review study found that toxic work culture was a big factor in high attrition rates. The study analyzed the language used by over 3 million U.S. employees in Glassdoor reviews to describe their employer between 2016 and 2021. The study defined toxic culture as disrespectful, non-inclusive, unethical, cutthroat, or abusive. Non-inclusive environments and disrespectful leadership were major factors in responses with the largest gender gaps. The disrespect that women face spans microaggressions, gaslighting, unfair hiring and promotion decisions, outright misogyny, sexual harassment, and sexism. Non-inclusivity may present itself in hiring practices, schedules, or allyship efforts. The study found that women are more averse to joining companies they perceive as non-inclusive, and prefer to find an organization that reflects their values.
Lack of Choice
Women want agency and choices. The option of a more flexible schedule goes a long way in providing a safe work environment. Only one in ten women prefer to spend most of their time on-site, citing work-from-home or hybrid work options as one of their top criteria while choosing an employer. Working from home allows for fewer microaggressions, which is especially obvious to women of color, LGBTQ+ women, and women with disabilities. These are the segments of women who are more likely to face demeaning or disrespectful treatment. Over 70% of HR leaders have said that offering remote work options has allowed their companies to hire and retain employees from diverse backgrounds. Lastly, remote work also keeps women from choosing between their personal and professional identities. They can be parents and employees without sacrificing one for the other.
What Can You Do as an Employer to Retain Female Talent?
Now that you understand what women bring to the table and why they are leaving, here is what you can do to prevent it.
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- Conduct sensitivity and sexual harassment training for all employees and have an action plan for dealing with sexual harassment complaints. Showing your employees that a process exists to help them allows them to feel safer and like they can trust you to deal with issues fairly.
- Be more diverse in your hiring policies. It benefits you when your clients see themselves represented in your workplace. Plus, when you have a diverse workforce, your employees have a breadth of experience to capitalize on.
- Have more holistic performance metrics. Accurately evaluate the place women occupy in your company, the work they do, and the value it results in. Get rid of outdated performance metrics and adapt to the changing needs of your employees.
- Try to have flexible work schedules and offer childcare services for your employees who have young children. If that is not possible, provide dependent care assistance. No employee should feel punished for deciding to have children. Remember that even if these employees take some time off, they return with the knowledge that they have a supportive employer and will be happier, more productive employees. Not supporting them during this time will result in high employee turnover rates and endless hours of training new employees.
- Offer more leadership training opportunities and pathways for women. Informal pathways for mentorship are fewer for women, so making initiatives like this a part of your institutional structure will make a significant positive impact.
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This post has been reproduced and updated with the author’s permission. It was originally authored on March 28, 2023 and can be found here.
Nitya Bodavala, at the time of this post, is a 3L of Penn State Dickinson Law. She is from Hyderabad, India, and comes from a family of entrepreneurs. It was natural to gravitate toward working with entrepreneurs even within the law.
Sources:
https://www.forbes.com/sites/tomaspremuzic/2022/03/02/the-business-case-for-women-in-leadership/?sh=7d74b5769cbb
https://www.mckinsey.com/featured-insights/diversity-and-inclusion/women-in-the-workplace#/
https://www.forbes.com/sites/forbescommunicationscouncil/2022/03/03/the-importance-of-diversity-and-inclusion-for-todays-companies/?sh=5bd9569649df
What image comes to your mind when you think of a Board of Directors? Let me guess—old, white men. Unfortunately, most boards looked that way not too long ago. But thanks to legal progress and social awareness, companies are taking strides to diversify the composition of their boards.
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The words “diversity” and “inclusion” have become buzzwords in the past couple of years and particularly, since George Floyd’s murder. Hashtags like #BlackLivesMatter, #MeToo, #StopAAPIHate and similar catchy phrases have exemplified the rhetoric taking place all over the world today. The COVID-19 pandemic has also highlighted economic disparities between different racial groups in the United States. A 2020 poll by the Washington Post found that 20 percent of Hispanic adults and 16 percent of Blacks had been laid off or furloughed during the pandemic, compared to 11 percent of White employees. Responding to the public outcry for a more diverse workforce, several companies scrambled to create diverse and inclusive teams. Did your company jump on this bandwagon? Has your business integrated a diversity and inclusion strategy into its business plan ? How should your business think about diversity and inclusion?
A McKinsey study revealed that racially and ethnically diverse companies outperform industry norms by 35%. Additionally, according to Boston Consulting Group, companies that have more diverse management teams have 19% higher revenue. This data demonstrates the importance of a diverse workforce. Diversity efforts at the workplace, however, should not only be reduced to a business strategy with positive outcomes that translate into high dividends for a company’s shareholders; they should be used as a tool and a means to empower minority groups that have been excluded from accessing markets and services so that they can also empower their communities. Before delving deeper into diversity and inclusion efforts that empower underrepresented groups, let’s take a look at some of the underlying legal structures and laws regarding hiring and keeping a diverse employee base.
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To make your diversity and inclusion efforts an empowering tool, consider making diversity and inclusion a part of your company’s mission and vision, creating task forces to hone in on the strengths and weaknesses of your diverse employees, keeping your leaders accountable and investing in your diverse employees.
Maame Boateng, at the time of this post, is a third-year law student at Penn State Dickinson Law. Maame is from Ghana and is interested in corporate and international law. Maame currently serves as a Senior Editor of the Dickinson Law Review.