Why Women at Work Remains an Issue, 2040’s Ideas and Innovations Newsletter, Issue 134
Issue 134, November 9, 2023
We’re going to tackle an issue that, in our opinion, should no longer be an issue: gender parity in the workplace. McKinsey in its latest Women in the Workplace study reports, “Over the past nine years, women — and especially women of color — remain underrepresented across the corporate pipeline. However, we see a growing bright spot in senior leadership. Since 2015, the number of women in the C-suite has increased from 17% to 28%, and the representation of women at the VP and SVP levels has also improved significantly.”
Honestly? That’s a pretty low bar.
Ironically, there is clearly parity in the gender distribution in the US which has remained steady for several years, with women accounting for approximately 51.1 percent of the population since 2013, according to Statistica.
Our report is by no means comprehensive about this critical issue. It’s our selective canvas of the facts and realities that are holding gender parity back, which is shocking to us in the year 2023. We also have to ask why this was ever an issue, why society is so slow to change, and why gender roles have never reflected a fair and level playing field.
So, why is there still such a leadership gap between women and men? After all these years of advocacy programs and affirmative action initiatives, women still lag behind men in large organizations. And it’s a conundrum since more than 66% of women high school graduates in 2022 were enrolled in college compared to 57 % of male high school graduates, says the Bureau of Labor Statistics.
Brookings reports over 1.1 million women received a bachelor’s degree in the 2018–19 academic year compared to fewer than 860,000 men; simply stated, about 74 men received a bachelor’s degree for every 100 women. Even fewer men graduate with an associate or master’s degree, relative to women. Pew adds, “The shift in the college-educated labor force — as women now comprise a majority — comes around four decades after women surpassed men in the number of Americans earning a bachelor’s degree each year.”
To illustrate the gender parity imbalance, here are a few sobering data points:
· LinkedIn data indicates that the share of women in senior leadership positions defined as Director, Vice-President, or C-suite — is at 32.2% in 2023 nearly 10 percentage points lower than women’s overall 2023 workforce representation of 41.9%.
· Fortune reports women CEOs run 10.4% of Fortune 500 companies and a quarter of those 52 leaders became CEO in the last year.
· Only 16 percent of CFOs at Fortune 500 and S&P 500 companies are women and CFOs overwhelmingly get chosen to fill the CEO position.
· Global gender parity is going to take more than five generations to achieve, as women still lag far behind men in the economy and politics and surging inflation last year disproportionately hurt their financial health in findings by the World Economic Forum. Cut to the chase: Global gender parity will take 132 years.
Even being hired starts on the wrong foot with a baked-in bias. McKinsey reports “Women are often hired and promoted based on past accomplishments, while men are hired and promoted based on future potential.”
Go back and read that last sentence again.
A reasonable person would step back and ask why there are two such different vantage points in the consideration of hiring a woman or a man. What is the thought process and rationale? Sounds like a hidden or unspoken bias. And then because of the gender disparity in early promotions, men end up holding 60 percent of manager-level positions in a typical company, while women occupy 40 percent.”
What’s worse, making it to the CEO spot is no guarantee in the pursuit of parity. Research published in the Journal of Management states female CEOs have a 45% higher likelihood of being fired than their male counterparts. Study co-author Dr. Sandra Mortal, associate professor at the University of Alabama’s Culver College of Business states, “Dismissing the CEO is usually viewed as evidence of good corporate governance as it suggests that the board is taking its monitoring role seriously; however, our research reveals there are invisible but serious gender biases in how the board evaluates CEOs and its decision to retain or fire particular CEOs.” Co-author Dr. Vishal Gupta adds, “The results of this study point to the extra pressure and scrutiny directed at women in senior leadership positions relative to their male counterparts. This is problematic because women face difficult barriers and obstacles in breaking through the proverbial glass ceiling, but they also seem to continue to face additional challenges even after reaching the top of the corporate hierarchy.”
Think about it. Why do we give men more of a free pass? Based on what? Our ingrained perceptions and beliefs are that men are more aggressive and take more risks. Therefore, we must give them more runway? Why aren’t women in the same positions afforded the same credence and runway? Any stakeholder, including a board of directors, wants a CEO to succeed. Criteria in assessing performance should be the same for both. Parity.
Another case in point, McKinsey reports, “For the ninth consecutive year, women face their biggest hurdle at the first critical step up to manager. This year, for every 100 men promoted from entry-level to manager, 87 women were promoted. And this gap is trending the wrong way for women of color: This year, 73 women of color were promoted to manager for every 100 men, down from 82 women of color last year. The workplace is a mental minefield for many women, particularly those with traditionally marginalized identities.
“Women who experience microaggressions are much less likely to feel psychologically safe, which makes it harder to take risks, propose new ideas, or raise concerns. On top of this, 78 percent of women who face microaggressions self-shield at work or adjust the way they look or act to protect themselves.”
The report adds women are 2.5 times more likely than men to experience others commenting on their appearance and twice more to have comments on their emotional state. And the microaggressions target marginalized groups of women even more dramatically. LGBTQ+ women have 6.5 times more experiences than men having comments on their appearance (women with disabilities, six times more) and women of color are 5.5 times more likely to be confused with someone else of the same race or nationality. (McKinsey)
But here’s the kicker. Bank of America data shows that US companies with greater gender diversity have a median 20% higher return on equity since 2005 than those who lack it. Hmm, why is societal action based on ingrained beliefs and perspectives that run counter to reality? Trust the data.
It’s not just C-level leadership with gender gaps, boards are principally male. Harvard Business Review reports in 2022, 45% of new Fortune 500 board appointees were women and the percentage of women on all these boards had risen to almost 30% up from 26.5% in 2020.
Once again, that’s a pretty low bar.
In Europe, where European Union and UK regulators have set a 40% board quota for women, almost 80% of large companies have at least one-third of their board seats held by women. Furthermore, globally, gender inequality in boardrooms will not be eliminated until 2038 (Reuters).
Do the math: there is still a significant gender gap.
Allsorter recently analyzed 1,000 of the world’s largest companies and found just 64 CEOs were female, 94% were men. Reuters reports a JP Morgan study that “Globally, women’s participation in formal labor has made little progress over the last three decades, accounting for just under 47% of the labor force compared to 72% for men while they still perform on average 76% of all unpaid care work.” That may be the case as an average, but Statistica reports specific worldwide female employment rates with Iceland topping the list at 81%, San Marino at 80%, Burundi at 78%, the Netherlands at 78%, and New Zealand at 76%. Uganda, Tanzania, Belarus, Estonia, Moldova, and Vietnam all rank at least 30 percentage points ahead of the US.
What’s going on here? There are economic consequences to the disparity. In the world’s richest economy, women and minorities have lower representation in “high-paying” US industries and jobs that are less affected by inflation pressures, such as technology or finance, states Bank of America Global Research.
Women lost around $800 billion in income globally due to the pandemic, according to the Bank of America report, “Almost half of those employed work in informal sectors, which saw sharp pay cuts since Covid. The income and family responsibility disparities, coupled with a higher cost of living for women than men, mean women are at an even greater risk of real wage losses.”
Yet, women are potentially outperforming men on a meta-level. On the positive side, for 2022 high school graduates enrolled in college, 29% of women were also working compared to 26.6% of men. Some 9.1% of women 2022 high school graduates enrolled in college were unemployed compared to 14% of men.
An Alternative Path
Many women choose to leave the corporate world because of the implicit and inherent bias and the fatigue of competing in a man’s world. McKinsey’s report states, “Women directors are leaving at a higher rate than in past years — and at a notably higher rate than men at the same level. As a result of these two dynamics, there are strikingly fewer women in line for top positions.”
Where are these women going? Quite possibly to start their own businesses. Incfile reports in 2020, 28% of startups had at least one female founder, a six-percentage point increase from 2017. Startups with at least one female founder received 17.2% of venture capital for the first half of 2022. And LinkedIn adds, “Women-owned businesses tend to be more successful than businesses owned by men. Studies have shown that women-owned businesses have a lower failure rate than male-owned businesses. They also tend to generate higher revenues and create more jobs than their male counterparts.”
Investopedia reports although “women entrepreneurs are historically most known for running fashion houses or cosmetic companies, more recently, many have made their mark in other industries, such as real estate and biopharma.” Let us add here that women have founded and are running AI startups, proving the point that there are no female-only types of businesses.
Here’s a shortlist compiled by Investopedia of top female entrepreneurs, and the scope of their companies is impressive by any measure.
· Zhang Xin, co-founder of SOHO China, a real estate development firm in China. Known as “the woman who built Beijing,” she was once a factory worker, later graduating from Cambridge University with a master’s degree in economic development.
· Kiran Mazumdar-Shaw, founder of Biocon, a global biopharmaceutical company began Biocon out of a rented shed and grew it into India’s largest listed biopharma firm in terms of revenue.
· Janice Bryant Howroyd, founder and CEO of ActOne Group, an employment agency and consultancy, is the first Black female-led company to bring in more than $1 billion in annual revenue.
· Oprah Winfrey the media mogul has a net worth of $2.5 billion as of February 2023, according to Forbes.
· Beyoncé through her company, Parkwood Entertainment, produces movies, music, and clothing. Her net worth as of February 2023 is $450 million, according to Forbes.
· Taylor Swift at 33 years old and the youngest on this list earned $4.1 billion from the Eras Tour concerts and her blockbuster film has pulled in over $350 million to date. At the end of 2023, Taylor Swift’s net worth is calculated to be $1.1 billion, according to Bloomberg.
· Rihanna at 35 years old, is a superstar singer and has made most of her $1.7 billion fortune from Fenty Beauty.
· Katie Rodan and Kathy Fields, co-founders of skincare and multilevel marketing company Rodan + Fields, each have a net worth of $530 million.
· Sara Blakely, the inventor of Spanx undergarments for women and men sold more than 50 countries. Her net worth is $1.1 billion.
· Tory Burch founder of her namesake company now brings in $1.5 billion in sales annually.
Next Gen Ambitions
We have reported about next gens lack of loyalty to an organization, developing portfolio careers, and changing up the rules and expectations in the workplace. McKinsey reports, “Young women are especially ambitious. Nine in 10 want to be promoted to the next level, and 3 in 4 aspire to become senior leaders.” And that assumes that they are going to stick with you. To engage them and retain them, “One in 5 women say flexibility has helped them stay at their organization or avoid reducing their hours. A large number of women who work hybrid or remotely point to feeling less fatigued and burned out as a primary benefit. And a majority of women report having more focused time to get their work done when they work remotely.”
To give them a fair chance, McKinsey recommends that organizations and leaders change their outlook and attitudes. As companies work to support and advance women, they should focus on five core areas:
· Tracking outcomes for women’s representation
· Empowering managers to be effective people leaders
· Addressing microaggressions head on
· Unlocking the full potential of flexible work
· Fixing the broken rungs, once and for all
Isn’t it time to take a closer look at ourselves and society as a whole? Is our perceived reality based on faulty assumptions? We would say yes. In our dynamically changing, tech-infused world, we suggest it’s time to dismiss preconceptions and recognize the value that individuals, regardless of their gender, bring to the table. Collectively, there is much we can achieve as an inclusive whole.
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