Imagine that you are the leader of a community supported by agriculture. You have developed a system of pipes that carries water from its source to locations all around your community, delivering the ideal amount of water to ensure you are able to grow and harvest world-class produce. During a particularly dry growing season, you discover that your water pipeline has a substantial leak. By the time you discover it, you have lost a tremendous amount of water, and your community is facing significant loss of both money and resources. This leak will affect your community for years to come. What do you do?
Simple…you fix the leak.
You would fix that leak as quickly as possible, understanding that the health and livelihood of your entire community depends on your pipeline remaining intact and delivering water all the way from its source to its destination.
Our country is facing a similar problem, though not with water. We have a leaky leadership pipeline, and it is affecting nearly every aspect of business. Women are hired at the same rate as men for entry level positions, yet only 28% of senior management positions and 4.8% of CEOs are female, a smaller percentage than those same numbers just two years ago. There are missed opportunities at every level to invest in and leverage the talents of women that are causing them to exit the workforce entirely. In the past four decades, only 60 women have managed to shatter the glass ceiling and take control of Fortune 500 companies; that’s an average of only 1.3%. The number of women in leadership positions will likely continue its downward trend if we don’t begin to work diligently to seal our leaky pipeline.
The problem is complex and cannot be solved overnight, and while there is some progress being made, it is not widespread enough to realize any significant change. Our companies are losing employees, and along with them the talent and opportunity for growth and innovation. Economically, it is causing a $2 trillion GDP gap in the United States. Put simply, businesses are losing money because they are not embracing the full capacity and capability of the female workforce. A study by the McKinsey Global Institute estimates that we could add up to $4.3 trillion in annual GDP by 2025 if women attain gender parity. This is an unrealistic goal, but the potential economic impact cannot be overlooked.
If you are involved in discussions about gender equality in the workplace, you’ve likely heard people talk about the differences between men and women and what women need to change to be successful in business. Women are more risk-averse, we don’t negotiate well or advocate for ourselves…and the list goes on. I disagree. Instead of focusing on “fixing” women, we need to focus on fixing the broken system that is keeping us out of boardrooms and C-suites. Focusing on these perceived gender differences has staying power not because they are accurate, but because they uphold gender norms, preserve the status quo, and require no real change to existing workplace structures or work arrangements.
American workplaces have not kept pace with our changing workforce. Since the 1960s, our workforce has seen an influx of women, yet our workplaces are the same antiquated places designed for a predominantly male workforce. It is widely known that companies with women in leadership positions are more successful. A 2015 study by the University of California, Davis found that the 25 companies (out of the 400 studied) with the highest percentage of women executives and board members had median returns on assets and equity that were 74% higher than their male-dominated counterparts. A Nordea study did not mince words when announcing their results: “The results are clear: companies run by women perform far better than the market.”
So how do we keep women in the workforce, fixing our leaky pipeline? I believe the first step is fundamentally changing our workplaces to match our ever-evolving workforce. One change that we must make is building flexibility into our workplaces. Women, even when working full-time, still bear the brunt of household responsibilities and caregiving duties. In many situations, because of gender pay inequality, women make less money and are therefore the ones to sacrifice their career for caregiving. By providing flexible work opportunities, including remote work, job share opportunities, and flexible work hours, companies will retain more of their talent, have happier employees, and be more successful in the long-run.