Job Market: Good News, Old News, and Something Else

April 4, 2024

By Megan Nash, Director of Education and Talent

There’s good news, there’s old news, and there’s something else.

Let’s start with the good news.

Women’s labor force participation is back and with many age groups at pre-pandemic levels. You may recall that the pandemic disproportionately impacted women in the workplace, so this is especially important. This was not just a domestic issue, this was global. McKinsey research tells us that while women made up 39% of the workforce worldwide, they represented 53% of job losses.

So that takes us to the old news.

We are still dealing with a gender pay gap and issues that arise from segregated occupations. For example, industries that saw the most uncertainty and pressure – hospitality, education and healthcare – are industries with great female representation. We also know that universally, there were other inequities that affected women including the fact that women are more likely to be responsible for a greater share of caregiving and home care responsibilities.

Before the pandemic, diversity, equity and inclusion were hot topics. Research showed that a diverse workforce was a key for success and businesses were striving to increase representation of women and others at all levels. McKinsey’s research as recently as 2020 looked at companies over 6 years and found that companies with the most gender diversity were 48% more profitable than the least diverse businesses.

The pandemic didn’t cause these problems and we certainly are not closer than we were before the pandemic to solving them, however, here’s something new to consider.

We’ve heard of the “Big Resignation” but we’re also amid what LeanIn.org is calling “the Great Breakup.” Women are demanding more from their employers, and more than ever before, they’re leaving their jobs to find it and doing so at an even higher rate than men.

With an increased sense of self-worth, women are exploring their options. They are looking to work for a company that aligns with their priorities. One that offers flexibility or focuses on well-being or promises the kind of reward structure that is important to them. It is, however, a big flashing sign for employers.

The question is, is it a warning sign, or a sign of opportunity?

Women are already underrepresented in businesses for a variety of reasons, and we know that representation is one of the key components of retention. This means that if women begin to leave a company because they’re offered a better option elsewhere, a company will likely see more women follow in those footsteps. Retention is important for any employee, but losing women leaders may put a company at risk for losing their next generation of women leaders as well.

For all our women in the industry, this is your reminder that your skills are valued, and you would not be alone if you were seeking opportunities that aligned with and supported the priorities you share.

For all our employers, here are some important things to consider about retention during the “Great Breakup”.

Look at your company data and inspect your pipeline: Researchers agree that the “broken rung” is still broken. This refers to the first step up to manager. For every 100 men promoted from entry level to manager, only 87 women are promoted. That drops to 82 for women of color. This means that immediately, men outnumber women at the manager level and that repeats itself exponentially with each promotional level. This is a pipeline problem which means your company may not have enough women available to promote to senior leadership positions. See what your data says about your promotion patterns.

Ask the hard questions: Ask yourself what your promotional patterns means about your review processes, representation across different segments of your business and policies around flexibility and development. Also ask your employees the hard questions. What is it like being a woman in your workplace? Women are 2x more likely to be mistaken for someone junior in their workplace. 32% of women in technical and engineering roles said they were often the only woman in the room at work. Do you know if their experience lines up with your goals for your company culture?

Review your compensation process: The research confirms that companies are more profitable if they are more diverse. Women are 2x as likely as men leaders to spend substantial time on DEI work for their companies but 40% of women leaders say that their DEI work isn’t acknowledged at all I their performance reviews. Women are also more likely to be asked to do the “culture” tasks at work even those these are not roles that are recognized when it comes time for promotions and raises. For all supervisors: is the work that your team member is doing or being asked to do valued by the organization? Should it be if it isn’t?

Create a space for allies and mentors. Employees seek connections to others that have been through or are going through the same process as them. Make it a safe place for employees to ask questions or acknowledge inconsistencies. Allow your employees to advance and advocate for one another. This may help bring to light problems or issues that would have otherwise stayed hidden.

On a final note, the pandemic did not create these challenges but there is an accelerated sense of urgency. For Young women advancement is a priority and they are actively seeking it. The same report from Lean In tells us that more than two-thirds of women under 30 want to be senior leaders. Half of them have said it’s become more important over the past 2 years.

If you consider this, along with the larger trend of the Great BreakUp, if you are not working to create a retention strategy that supports your company’s values, you could be losing talent who are far more comfortable seeking new opportunities than ever before.

Job Market: Good News, Old News, and Something Else

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