The effects of women in the workforce
The effects of women in the workforce
Women in the workforce earning wages or a salary are part of a modern reality, one that developed at the same time as the growth of paid employment for men; yet women have been challenged by inequality in the workforce. Until recently, legal and cultural practices, combined with longstanding religious and educational conventions, restricted women’s participation in the workforce. Dependency upon men, and consequently the poor economic status of women, have had the same impact.
Women’s lack of access to higher education had effectively excluded them from the practice of well-paid and high status occupations. Entry of women into the higher professions like law and medicine was delayed in most countries due to women being denied entry to universities and qualification for degrees; for example, Cambridge University only fully validated degrees for women late in 1947, and even then only after much opposition and debate. Women were largely limited to low-paid and poor status occupations for most of the 19th and 20th centuries, or earned less pay than men for doing the same work. However, through the 20th century, public perceptions of paid work shifted as the workforce increasingly moved to office jobs that do not require heavy labor, and women increasingly acquired the higher education that led to better paying, longer-term careers rather than lower-skilled, shorter-term jobs.
The increasing rates of women contributing in the work force has led to a more equal hours worked across the world.However, in western European countries the nature of women’s employment participation remains different from that of men. For example, few women are in continuous full-time employment after having a first child.
Women are today a permanent part of the waged workforce and the union movement. But women’s work remains generally low paid and undervalued. Sexist attitudes and practices are rampant in and out of the workplace, and the majority of domestic labour, especially childcare, is still done by working class women. The shift away from stereotypes of the past is clear enough that even social conservatives notice it. Speaking about paid parental leave, one said, “There are very few women not in some form of paid employment. The vast majority of modern women are going to be in the workforce for most of their lives, including their child-bearing years.”
It was already the case 20 years ago that a majority of women with children were in the paid workforce. Today that figure is over 60 percent. Even what appear to be incentives for mothers to stay at home full-time. No-one is going to give it up and run home for the temptations of $40 a week. While some of the rights that women have won have come under pressure, things are not going back to where they were. Despite considerable changes, two things remain constant. One is the role of the family in raising the next generation of workers and maintaining the ability to work of the existing generation, of both sexes, at little cost to employers. The other constant is the employers’ need for women’s labour as a source of profit. It is this which means that childcare is not going to totally disappear.
From the earliest demands for equal pay, campaigns by unions have always been necessary to get any recognition let alone redress for the undervaluing of women’s work by employers. The recent campaign by Australian Services Union members in the female-dominated social and community work sector forced Fair Work Australia to recognise that at least part of their low wages was due to gender. No other force in Australian society has the inclination or the power to do this.
The key factor in this is the impact of women’s changing role in the workplace. Women are now a permanent and significant part of the workforce. The mass employment of women over the past half century has affected the relations between men and women and undermined the stereotypical model of the working class family.
Over the past 50 years, millions of women previously dependent on men decided to take control of their economic fates and work towards their economic empowerment. An increasing number of women have joined the labor market.
Through higher education, women improved their job market value, thus increasing their prospects for better jobs. Therefore, they managed to shift their long-standing role model from stay-at-home mothers to qualified career women. An increasing number of educated female employees have been integrated into the labor market with higher participation rates than their less educated peers. This huge social change took place quite smoothly as a result of growing demand for women’s labor as well as growing supply.
Over the past 25 years, the increased participation of women in the labor force has led to higher profitability for most businesses. This happened because women address a different target audience and know to market and sell a firm’s products and services quite differently than men. Therefore, by entering the labor market, they have addressed the needs of a diverse consumer population thus leading to an improved economy.
The combined effect of economic development and higher education prospects for most women along with increased economic opportunities and greater economic integration has lead to considerable business growth in most sectors including manufacturing and services as well as to stronger market incentives for women to participate in the labor force.
The industrialized world faces declining fertility rates as more and more women are entering the labor market. This is only natural as nowadays nearly 60 percent of families have both parents employed and therefore women work much more than they used in the 1960s.
Although the transition and the acceptance of women in the labor market has happened quite smoothly, conflicts have increased between male and female employees, especially in the higher levels of management. It all started as constructive disagreements but it gradually evolved into office politics driven by project advancements.
Women are more likely to select flexible working hours as they are the primary child caregivers and they bare the brunt of the household. Typically, this leaves them with lower wages than men and they are more likely to enter and exit the labor market at a lower cost.
In short, the feminization of the workforce has both advantages and disadvantages. Women have entered the service sector but they have also occupied managerial positions, often quite successfully. This means they have invested more time and effort in honing their skills than getting married and having families. On the other hand, from an organizational perspective, they have efficiently managed to bring innovation in the corporate environment.
Women have been a growing factor in the success of the US economy since the 1970s. Indeed, the additional productive power of women entering the workforce from 1970 until today accounts for about a quarter of current GDP. Still, the full potential of women in the workforce has yet to be tapped. As the US struggles to sustain historic GDP growth rates, it is critically important to bring more women into the workforce and fully deploy high-skill women to drive productivity improvement.
Creating the conditions to unlock the full potential of women and achieve our economic goals is a complex and difficult challenge. There is significant potential to raise the labor participation rates of women across the country. At a corporate level, where many high-skill women are employed, the opportunity is to continue to advance women into leadership positions where they can make the greatest contributions. Despite the sincere efforts of major corporations, the proportion of women falls quickly as you look higher in the corporate hierarchy. Overall, this picture has not improved for years.
There is an opportunity to make substantial progress in developing and advancing women on the path to leadership. Companies have become very good at recruiting women—many major corporations recruit their “fair share” or more of women. Moreover, many companies have introduced mechanisms such as parental leaves, part-time policies, and travel-reducing technologies to help women stay the course. While the many barriers that remain are substantial, interventions at critical career points can have outsized impact.
For example, with a focus on middle management to increase the number of women who advance to the vice-presidential level, corporations could substantially improve the odds of achieving real gender diversity in top management. We found that more women in middle management roles are focused on leading than their colleagues at the entry level. And they have already demonstrated enough to advance and acquire managerial skills. Moreover, many are younger women with relatively light work and family concerns. If companies can win their loyalty at this stage of their careers, they will be more likely to stay the course.
Women don’t opt out of the workforce; most cannot afford to. They do leave specific jobs for others in pursuit of personal achievement, more money and recognition—just like men. They do hold themselves back to pursue greater satisfaction across all parts of their lives—but not only to fulfill family responsibilities. Indeed, a sizable percentage of the male college graduates who took our survey reported the same motivation to gain greater balance.
The specific barriers that women cite as factors that convince them that the odds of getting ahead in their current organizations are too daunting. The reasons why women choose to remain at their current level or move on to another organization—despite their unflagging confidence and desire to advance—include: lack of role models, exclusion from the informal networks, not having a sponsor in upper management to create opportunities.
Another phenomenon that limits diversity at the top: Women often elect to remain in jobs if they derive a deep sense of meaning professionally. More than men, women prize the opportunity to pour their energies into making a difference and working closely with colleagues. Women don’t want to trade that joy for what they fear will be energy-draining meetings and corporate politics at the next management echelon.
Of all the forces that hold women back, however, none are as powerful as entrenched beliefs. While companies have worked hard to eliminate overt discrimination, women still face the force of mindsets that limit opportunity. Managers male and female continue to take viable female candidates out of the running, often on the assumption that the woman can’t handle certain jobs and also discharge family obligations. In our Centered Leadership research, we found that many women, too, hold limiting beliefs that stand in their own way—such as waiting to fill in more skills or just waiting to be asked.
These imbedded mindsets are often institutional as well as individual—and difficult to eradicate. A CEO’s personal crusade to change behavior does not scale. A diversity program by itself, no matter how comprehensive, is no match for entrenched beliefs. Targeting behavioral change generally leads only to an early burst of achievement followed by reversion to old ways.
Evidence points to the need for systemic, organizational change. Companies that aspire to achieve sustained diversity balance must choose to transform their cultures. Management needs a powerful reason to believe such as the potential competitive and economic advantage from retaining the best talent.
Between 1970 and 2009, women went from holding 37% of all jobs to nearly 48%. That’s almost 38 million more women. Without them, our economy would be 25% smaller today an amount equal to the combined GDP of Illinois, California and New York.
GDP growth is driven by two factors—an expanding workforce and rising productivity. Back in the 1970s when women and a huge cohort of baby boomer men were entering the workforce, 65% of GDP growth arose from workforce expansion. Today, nearly 80% of growth is related to productivity increases.
To sustain the historic rate of GDP growth of approximately 3% and maintain the United States’ leadership in the global economy, MGI reports that the nation will need a combination of some workforce expansion and a burst of productivity driven by innovation and operational improvements. Women are critical to both forms of growth.
About 76% of all American women aged 25-54 are in the workforce. That compares with about 87% in Sweden. Underneath the US average, there is considerable variability among the states, and the top 10 states have participation rates at 84%. This suggests an opportunity. Getting all states up to an 84% participation rate would add 5.1 million women to the workforce. This is equivalent to adding 3-4% to the size of the US economy.
In 2010, 58% of all undergraduate degrees in the US were awarded to women. As a result, women accounted for 53% of the total college educated population in the US However, only 50% of the college educated workers were women. Simply said, we don’t have the full amount of female college educated talent in our workforce. Changing this could improve corporate performance and help raise national productivity. But doing so will depend on finding ways to keep ambitious, well-qualified women moving up the management ranks. Women can also contribute to the productivity challenge by training in disciplines with impact on increasing productivity, such as finance, professional services, and science & technology. How women contribute at the corporate level: The business case for diversity.
As has been well documented, Corporate America has a “leaky” talent pipeline: At each transition up the management ranks, more women are left behind. According to Sylvia Hewlett, founder of the Center for Work-Life Policy, women represent 53% of new hires. Catalyst estimates that at the very first step in career advancement—when individual contributors are promoted to managers—the number drops to 37%. Climbing higher, only 26% of vice presidents and senior executives are female and only 14% of the executive committee, on average, are women. At this point women are doubly handicapped because, as our research of the largest US corporations shows, 62% are in staff jobs that rarely lead to a CEO role; This helps explain why the number of women CEOs in Fortune 500 companies appears stuck at 2-3%.
While data shows that women even mothers retain strong conviction about their abilities and a desire to advance, when they look at the odds of making it through the pipeline, many make a well-reasoned decision: They stay put, look for a job elsewhere that will fulfill their ambition, or seek careers outside large corporations. We found four kinds of barriers in their way:
Specific factors hold women back or convince women that their odds of advancement may be better elsewhere. Lack of access to informal networks where they can make important connections, a lack of female role models higher up in the organization, and a lack of sponsors to provide opportunities, which many male colleagues have.
Some interesting insights relate to the role that life outside work plays in career choices. These insights counter much of the conventional wisdom. Diversity officers said that motherhood rarely prompts a woman to stay put, downshift or look for work elsewhere. No surprise, many women expressed a concern about the always on 24/7 executive lifestyle and travel requirements. Notably, attitudes among fathers and mothers are converging: Half of fathers with one child say they will not accept a new job that reduces work and life balance; 55% of women without children say the same thing. This suggests that companies have even more to lose from the talent pipeline than highly-qualified mothers.
The biggest barriers for women are imbedded mindsets that halt their progress. Managers men and women still tell diversity officers that “Everybody ‘knows’ you can’t put a woman in that particular slot.” Or “That job could never be done part-time.” Even at major corporations, not-so-subtle differences linger. Despite their best efforts, women are often evaluated for promotions primarily on performance, while men are often promoted on potential. Management may be acting with best intentions—to prevent women from failing—yet another mindset that forms a barrier to advancing women.
The effect of women’s own mindsets cannot be discounted. While women remain highly confident of their qualifications throughout their careers, women are, on average, less satisfied than men with their chosen professions and jobs. Moreover, as women get older, their desire to move to the next level goes away faster than men’s desire. At all ages, more men want to take on
more responsibility in their organizations and have greater control over results.
No matter how they feel about their current situation, women never lose their belief in their abilities. Women are ambitious and believe they have the qualifications—they want to make a contribution to the success of the organization. Over time, however, the barriers seem to get larger and women’s belief that there is opportunity ahead diminishes—and along with it their willingness to keep pushing.
Knowing what we know about the role of women in driving macroeconomic growth and how women can contribute to corporations, it is clear that the US must make far better use of women in the workforce. Plugging the leaks in the talent pipeline is clearly a top priority and there are opportunities at every transition point in the pipeline. But we believe companies have a promising opportunity to capture by focusing on the transition from mid-level manager to senior management which is typically the vice president role.
Having survived the first cut in the talent pipeline—from individual contributor to manager— women have already demonstrated superior capability. They retain their ambition and confidence and are quickly acquiring skills and know-how. They also have a better understanding of what it takes to succeed than when they entered the workforce—and have a stronger belief that opportunities for promotion exists. A greater portion of middle management women aspire to top management roles versus entry-level women.
If companies could raise the number of middle management women who make it to the next level by 25%, it would significantly alter the shape of the pipeline. More women who make it to senior management share an aspiration to lead, and more believe that getting to senior leadership is worth the cost. Advancing more women into these positions would in time help companies rebalance their executive committees, which in turn increases the likelihood of sustaining gender diversity at every level to the top.
Addressing the barriers that convince women that they can’t make it is far more complex. As chief diversity officers told us, there are a thousand reasons for a thousand little leaks in the talent pipeline. This means that one-off solutions will never succeed. Comprehensive change is required.
This systemic challenge can be met only through organizational transformation. This is a tall order. 70% of transformation efforts fail. However, the same research tells us that the transformations that succeed have strong leadership from the top and a comprehensive plan to shift mindsets and behaviors. Getting people to think and act differently is one of the most difficult management challenges, but it can be done. 3269
Women working for the federal government earn less than men overall but the gap is shrinking, and most of the difference is the result of women being concentrated in lower-paying jobs with too few occupying the top ranks, a government report issued Friday found.
The Office of Personnel Management’s study showed an overall gender pay gap for white-collar occupations of 12.7 percent in 2012, down from 19.8 percent in 2002 and 30 percent in 1992.