Before International Women’s History Month ends, I wanted to acknowledge the many uplifting posts about women in the workplace, but also point out some conflicting, and quite confusing, findings from articles and studies published or reposted this month. I couldn’t help but notice several contradictions about women’s evolving roles, so I attempted to look beyond the headlines to see if there might be commonalities, despite the obvious differences, that may shed light on how we address the future of work and even the future of business.
Here’s a quick summary of some key published pieces:
- The first is the highly respected 2022 edition of Women in the Workplace, an annual report from LeanIn.Org and McKinsey & Company. This is the largest study on the state of women in corporate America, based on data from 333 companies employing more than 12 million people. This year’s theme, “The Great Breakup,” points to how women are demanding more from work and leaving their companies in unprecedented numbers to get it. Women leaders are switching jobs at the highest rate ever recorded.
- Next is research from Morgan Stanley Capital International (MSCI), also released in late 2022, that tracks the progress of women on boards. This year’s findings state that while the global growth rate of women on boards is gradually recovering post-pandemic, board posts for women in the US has declined.
- A March 8th Wall Street Journal article titled Women’s Return to the Workforce Piles Momentum on a Hot Economy outlines how “American women are staging a return to the workforce that is helping propel the economy in the face of high inflation and rising interest rates.” It goes on to say that women have gained more jobs than men for four straight months, and now hold more than 49.8% of all nonfarm jobs.
- GoDaddy in the UK released their “Unstoppable Women” data on March 20th announcing, “Cost-of-Living Crisis Unleashes New Generation of Female Entrepreneurs.” The information underscores how the proportion of British micro businesses owned by women has surged since the start of the pandemic. (Micro businesses in the UK are defined as having less than 10 employees with a turnover of under £2 million.)
So, what can we assume from this information?
And, perhaps most importantly, what does it mean to the future of work and ultimately to the future of business? Are women returning to work or quitting their jobs? Are they becoming entrepreneurs, while not joining boards? Granted, the pieces that caught my attention this month were somewhat weighted toward to the US, although one study was global and another from the UK. While it may be difficult to compare board members, entrepreneurs, and employees, all of this information does tell us something about general trends, obstacles, and opportunities for women in the overall workforce.
Here’s what I discovered…
- The priorities around work are changing, as is business’ understanding of employee needs. This was accelerated by Covid-19’s deep impact on women in the workforce throughout the world. One in four women in the US, for example, became unemployed due to childcare needs.
- The combination of greater job flexibility, along with remote and hybrid work, has been positive for women. In fact, it’s now a priority for women to find companies that not only emphasize flexible work but consider employee well-being, while fostering supportive environments.
- To balance home life and work life, many women suffer burnout from management responsibilities, unsustainable workloads, or cultures that don’t appreciate their contributions. As a result, women are now choosing work options that they find to be more meaningful or personally rewarding.
This can mean that more woman are launching their own small business.
However, GoDaddy’s “Unstoppable Women” study also shows that female founders face different challenges than their male counterparts. While 78% of female entrepreneurs believe there are more opportunities for women owning a business rather than working for someone else, many still contend with pressures outside of work. Over four fifths of female business owners (82%) say they are responsible for most domestic household duties, while 44% say the costs and expectations associated with childcare are a barrier to female entrepreneurship. Plus, roughly half cited set-up costs (52%) and time commitments (48%) as obstacles to women starting a business, even though 72% of female founders created their business for under £1,000, according to the study.
The Wall Street Journal feature about women’s return to the workforce notes that Covid-19’s social-distancing measures affected female-dominated jobs in sectors that require close personal contact, such as housekeepers, nurses, and daycare instructors. Many mothers in white-collar jobs also left the workforce to care for their children after schools moved to remote instruction.
It emphasizes that the return of women to the workforce is powering the US economy’s underlying source of strength, the services sector. For now, demand is strong. Women hold 66% of all jobs in leisure and hospitality, private education, health, and other services— large sectors of the labor market that are staffing up. Women’s employment in these sectors grew by 719,000 in the six months ending in January, accounting for 38% of all private-sector job gains during that period.
Men account for a dominant share of jobs in many smaller sectors such as transportation and warehousing, manufacturing, and construction. Those sectors surged earlier in the pandemic but have more recently slowed. The tech-heavy information sector, where men hold roughly 60% of positions, cut jobs for two straight months.
Many couples are trying to balance their industries as various sectors expand or contract. Childcare remains out of reach for many families due to both the high costs and a lack of open spots at many daycare centers. In early February, nearly five million people in the US weren’t working because they were caring for children who weren’t in daycare or school, according to the US Census Bureau.
Understanding the drop in US board seats is more difficult to interpret.
There has been a 1.9% year-on-year increase globally in the number of women serving on boards, according to the Morgan Stanley Capital International (MSCI) report. The study also found that the percentage of director seats held by women globally continued to increase, from 22.6% in 2021 to 24.5% in 2022. The percentage of the world’s companies with at least 30% of their boards made up of women also increased to 38% in 2022, compared to 33% the previous year.
Although director seats held by women at US companies surpassed 30%, the rate of increase has declined over the past three years, from 2% in 2020 to 1.5% in 2022. By stark contrast, European companies have seen the highest increases in women on boards. (Danish companies, for example, went from 35% of board seats held by women in 2021 to 42.4% in 2022.) However, most European countries have mandatory gender quotas, which comparatively explains why companies based in Europe ranked in the top 15 in terms of the number of women serving on boards.
So, what are the lessons we can take away from all this varied information?
Certainly, no company wants to lose ambitious and experienced female leaders, nor do they want to risk the departure of young women who are the rising stars of their generation. It seems that some modest changes in company culture, along with basic social considerations, particularly around childcare for younger workers, could attract and retain more women.
I found it extremely interesting is that the current Morgan Stanley Capital International (MSCI) Report cited several earlier studies from Credit Suisse, McKinsey, and Morgan Stanley about how gender inclusion in corporate governance might be associated with positive financial performance. While MSCI emphasizes that “no clear causal link has been established,” these studies found significant correlations between the presence of women on corporate boards and strong financial performance using various financial metrics.
Additionally, companies with a higher percentage of women on boards also performed better on all three pillars of ESG (Environmental, Social and Governance). Female corporate directors are more likely to prioritize long-term societal issues, especially climate change. Without question, the balance of long term and short term can only help corporate longevity.
Women’s progress may seem slow, but the impact has been significant.