For the first time in history, a woman is the Vice President-elect of the United States. We also have another first: Jane Fraser of Citigroup was the first woman to be appointed as CEO of a top-tier bank.
These are milestones to celebrate in the pursuit of gender parity in both politics and business. More progress is needed, however, given studies demonstrating that companies with higher gender and racial diversity financially outperform their peers.
In the US, 80 percent of the 1.1 million people who left the workforce in September were women
Yet the COVID-19 pandemic threatens to upend these gains: McKinsey Global Institute (MGI) research shows that women’s jobs around the world are 1.8 times more likely to be impacted by COVID-19 than men’s. That is partly because women have the majority of part-time jobs around the world and the minority of full-time jobs. It’s also because the sectors women are concentrated in—such as hospitality and customer service—are disproportionately affected by COVID-19.
In the US, 80 percent of the 1.1 million people who left the workforce in September were women. As schools were restarting—many of them virtually or partially virtually—mothers stepped out of the workforce roughly 4 times more often than fathers to help kids with school and other childcare.
To ensure progress is not undone, and build an even stronger path to parity, we need to act now—and act quickly—to support those who stand to lose the most.
Fix the broken rungs of promotion
Over the last five years, the number of women entering the labor market has been trending upward, rising two percentage points to reach 47 percent of the US labor market pre-COVID-19. Female representation in senior leadership roles rose ~20% over the last 6 years, but women’s progress at earlier levels of the talent pipeline is much slower, and representation across industries varies quite a bit.
Across all industries, a crucial factor limiting representation across the talent pipeline is the very first promotion to manager—what we call the “broken rung.” For every 100 men who are promoted to a manager position, only 85 women are, and the gap widens for women of color—just 71 Hispanic women and 58 Black women are promoted. Compounding this gap over five years equates to a million missing women in leadership roles.
That’s a big driver of today’s lack of diversity in the executive suite comes from. It reflects decades of women who never assumed leadership roles, so that even today, only 20 percent of direct reports to a CEO are women, on average. Even that figure is under threat: MGI found that one in four senior women has considered stepping out of or slowing down in their careers.
There is a silver lining—many companies have taken important steps to support employees during the COVID-19 crisis. Accelerating these efforts can help prevent losing women and women of color in leadership.
Make flexibility a long-term reality
Even before COVID-19, several studies reported flexibility as the top characteristic employees said they wanted from their employer: people want to have more of a say in when, where, and how they work. With work from home becoming standard, and reductions in travel likely to remain for some time, companies can now offer greater flexibility than ever. The question is how much of this will persistent after COVID-19.
Finding new ways to accommodate employees’ needs may prove especially critical at a time when stress, burnout, and related mental-health risks have all increased, and appear to be taking a greater toll on women. Businesses that provide mental-health resources, and support those who feel the pressure most acutely, tend to see increased employee engagement and productivity. Concrete actions, such as training team leaders to recognize the signs of emotional distress, and encouraging people to more openly and safely share the stresses they face, can make a substantial difference in work environments.
****
Supporting women, and particularly women of color, through flexible policies, mentorship and sponsorship, and open communication is essential to retaining top talent and diverse leadership. Companies that invest in building a more responsive and empathetic workplace are better positioned to retain the employees most affected by today’s crisis—and nurture a culture where women have equal opportunity to achieve their potential over the long term. This is how we avoid undermining years of painstaking progress towards greater diversity, and instead build on our progress to date to create a better and more engaging workplace for everyone.
