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
American work culture is an international standout—and not always for a good reason. For many, working within Corporate America comes with an all-or-nothing approach of bending over backward for minimal thanks and bragging about who has taken the least time off. Across the pond, this mentality is not the norm. Instead, Europeans emphasize and adhere to a healthy work-life balance, take maternity and paternity leave, and refrain from checking work emails after hours. Recently, a new wave has taken over and carried its ripples over to American shores: the four-day work week. Studies have shown that employees who work four days per week without a cut in a pay report increased job satisfaction, higher productivity, and overall greater happiness. But what are the legal implications for such a drastic shift in the traditional work format? Can smaller companies and start-ups keep up with the trend?
Another possible model — and perhaps one that fits more seamlessly into American hustle culture — is a four-day work week in which employees work the same amount of hours spread over longer days. For a traditional forty-hour week, employees need to work ten hours on each of the four days while pay and benefits stay the same. Ten-hour days also pose legal challenges for companies. Will some employees need additional breaks throughout the day, especially minors or those with disabilities? Are all of the employees physically capable of working longer days? A business must consider these factors before implementing change to avoid alienating workers who may have challenges working longer shifts.
If a company does elect to shift to a shortened week, the employee handbook must reflect that change. Any compensation or policy alterations based on this change should be elaborated upon in the employee handbook to ensure employees understand the updates.
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.
Although the above requirements apply to most Nasdaq-listed companies, exemptions exist based on the type of entity or size. Notably, companies with five or less directors are only mandated to have one diverse director. Nasdaq published a helpful 
Implementing a diverse board has countless social and economic benefits. Below are a few advantages to consider when assessing whether your business should diversify the composition of its board.
Research shows that companies with diverse boards experience greater financial performance and pay higher dividends than homogenous boards. Remarkably, companies with diverse boards are 43% more likely to have above-average profits.
Confidentiality clauses that define what employees are forbidden from sharing with the outside world are an important part of employment agreements. Confidentiality policies are a crucial part of any business that has trade secrets to protect from competitors. There is often a significant amount of proprietary information that employers may want to keep locked down. However, some federal government agencies care about what goes into confidentiality agreements and have policies in place to protect employees’ rights. It is important to keep these rights in mind to ensure that employment contracts are not infringing on protected rights.
Section 7 also governs employee criticism of the employer. The NLRB found that overly broad rules that may be construed to ban criticism or protests about supervisors and the employer, in general, are unlawful. This includes statements prohibiting negative comments about the company, “insubordination,” and social media posts that could affect the employer’s business or reputation, to name a few.
Savannah Wilt, at the time of this post, is a third-year law student at Penn State Dickinson Law. She is an MBA student at Penn State Harrisburg and is a graduate of York College of Pennsylvania. Savannah is the current Treasurer of the Business Law Society and is pursuing a career assisting small businesses with legal matters.