Why You Need a New Strategy for Retaining Female Talent
There are big changes coming to American companies. While many business leaders look to the economy for trends and forecasts — closely following any promising signs as we recover from the 2008 crisis — there's another change brewing right under their noses. And it doesn't take knowledge of the stock market to understand.
The change is a massive shift in workplace demographics. Four shifts, in fact: Women are leaving the corporate world; nearly half of Americans will be retiring from the workforce in the next decade; minorities are now the majority; and freelancing is the new 9-to-5.
Is your organization prepared for the shifts to come? Developing successful organizational strategies is hard enough, but if you develop a strategy without understanding workforce demographics, you're shooting in the dark. This is the first post in a series exploring each demographic trend. Here, a closer look into the first of four: How will the changing gender dynamics of corporate America impact the workforce, and what can you do to prepare?
Women Are Becoming Your Competition
After years of bumping their heads on glass ceilings, women have had enough of the corporate world. In fact, studies show that more than half of women who start out in Fortune 500s leave before they reach the executive level.
Women who leave large companies often join upstart competitors or become new competitors by launching their own businesses. As of 2010, there were more than 8 million women-owned businesses in the U.S, and women-owned firms were growing at twice the rate of all other groups.
Why are women leaving? In 2012, women held 14.3 percent of executive positions at Fortune 500 companies, yet were paid only three-quarters of what their male colleagues earned. The wage gap does not reflect a skills or needs gap: Today, young women are just as likely as men to hold a bachelor's degree, 50 percent more likely to have a graduate degree and more than 40 percent are their families' main breadwinners.
So, why does this matter?
Gender Diversity Improves Performance
One reason your organization should pay attention to gender demographics at work is purely economical. Two recent high-profile studies have found that having even just one woman on a company's board correlates with significantly better performance.
Credit Suisse evaluated more than 2,400 global corporations over eight years and found that large-cap companies with at least one woman on their boards outperformed comparable companies with all-male boards by 26 percent. Catalyst found that Fortune 500 companies with women on their boards had significantly higher returns on equity (53 percent), better sales (42 percent), and a two-thirds greater ROI than companies with all-male boards.
Female leadership is not a "nice-to-have." It's a must-have for companies to survive and thrive.
Organizations that understand the value of diversity need to step up to the plate if they want to attract and retain women. Here, three tips for creating a structure for gender parity success at your company:
How to Retain Female Talent
1. Start a formal mentoring program. People tend to network and develop mentorships with people of their own gender. If men have more opportunity for leadership roles and they network with other men, men will continue to dominate leadership roles. Women, who have mentors with less clout and are sponsored significantly less than men, need access to mentors and sponsors of both genders.
2. Institute flexible work arrangements. Fear of negative career consequences, manager skepticism, excessive workload and a "face time" culture are among the barriers that prevent employees from adopting flexible work arrangements.
Set standards for both genders and give managers the training they need to be comfortable managing flextime workers. This removes the barrier for women who are the primary caretakers in their family of children or elderly relatives, which is a significant amount, according to the Bureau of Labor Statistics. It reports women do 54 percent more of childcare than men, and 50 percent of elder-care.
3. Function as a results-only work environment (ROWE), and create formal compensation policies with clear criteria. ROWE-type policies can help with turnover caused by work-life conflict, one of which is family burdens. The traditional solution to work-life challenges is the decision to have women stay home. This reinforces gender inequality, and subtly disadvantages women, particularly mothers. Judging women by the quality of their work rather than whether or not they are physically present can increase retention.
When it comes to attracting and retaining women, good intentions aren't enough. You need an action plan to prepare for the future of work, and you need one now.
Stay tuned for the next post in this series about how to thrive amid shifting workplace demographics.