It will take more than a century to reach gender parity in the C-suite, and a quarter-century to achieve equality even at the senior VP level, according to a report by McKinsey & Company. “We’re moving at a glacial pace,” said McKinsey associate Rachel Valentino. “We need to be doing more to address this issue faster.” Among the 50 new CEOs hired by Fortune 500 companies over the past year, not one is female.
These and other surprising statistics can be found in the report “Women in the Workplace 2015,” which Valentino presented at this year’s Wharton Women’s Summit. The report concluded that “corporate America is not on a path to gender equality” and revealed that “women are still underrepresented at every level in the corporate pipeline.”
The study is part of a long-term partnership between McKinsey and LeanIn.Org, the nonprofit founded by Facebook COO Sheryl Sandberg in 2013. The research analyzed 118 companies and nearly 30,000 employees.
Valentino asserted that advancing women up the corporate ladder, besides being the ethical thing to do, would boost the U.S. economy by $2.1 trillion. Forty percent of the economic gain would come from increased workforce participation, 30% from increased full-time employment, and 30% from a changing sector mix. Gender parity in business would represent 10% more U.S. GDP growth through 2025 than business as usual.
Held Back at the Starting Gate
It is conventional wisdom that only a few women have broken the glass ceiling for CEOs — 4% to 5% among the Fortune 500. But what is often overlooked is just how early in their careers women appear to start falling behind. Indeed, a main culprit appears to be the slower rate of promotion.
“If you look at the entry-level-to-manager transition, for every 100 men who are promoted across that level, maybe 75 women are. And this pattern holds across all levels of the organization,” Valentino said. If you think of this as a lifetime effect, women can expect to be a full corporate level below men over the course of their working years, she added. They are either advancing more slowly or never reaching that first promotion.
“As you get higher up in the organization, it’s a tap on the shoulder, it’s who knows who, it’s more of the boys’ club.” –Jenni Allen
But isn’t this situation partly because women leave companies more frequently than men? Valentino said the McKinsey data show otherwise. “Women are actually leaving at a similar, or if anything slower, rates than are men.” That includes upper management: SVP-level women are 20% less likely to leave as men, and women in the C-suite are half as likely to exit.
Digging back to before women are hired, Valentino said the report shows that women are under-represented even at entry level jobs. There is a 10 percentage-point difference between the sexes. And “there are gaps early on, even in education,” she said. “The pipeline that is feeding the workplace is uneven before we’re getting there.”
At McKinsey, Valentino said, the company historically has “disproportionately recruited from schools of engineering and science” where there happen to be fewer female candidates. She said the company is now trying to diversify its recruiting efforts in order to “have a balanced playing field very early on.”
Credit Suisse executive Priyanka Verma said that in finance many women tend to leave the workplace at mid-level, and cited a lack of mentoring as one factor for the exodus. “You don’t have anyone to turn to at those mid-levels.… There’s very few senior women to turn to.” She appreciates that her company has recognized the need to offer support.
The investment bank’s formal “Banking on Women” program provides both male and female mentors, “giving you that network amongst yourselves … making sure you have the tools and skill set to succeed and move on to the next level,” Verma said. She added that Credit Suisse now provides five months of paid maternity leave, and offers paternity leave as well. So in some ways, she says, “we’re getting there.”
Jenni Allen, a commercial manager at Dow Chemical, described how a male R&D director at the company made a small change that had a big impact on female employees’ chances of being promoted. “At the more junior levels within the firm, job openings tend to be posted on the internal job network, so everybody can see what the opportunities are,” she said. “But as you get higher up in the organization, it’s a tap on the shoulder, it’s who knows who, it’s more of the boys’ club.”
Among the 50 new CEOs hired by Fortune 500 companies over the past year, not one is female.
The new R&D director at Dow Chemical announced that every job in his organization would be posted for all to see. “I think within a year they saw an over 30% increase in women applying for senior R&D roles, just by making those opportunities transparent,” Allen said.
Mindsets Matter
For the McKinsey report, researchers also tried to capture attitudes, unconscious biases, and other psychological factors, according to Valentino. What was revealed are some big differences in how people think about gender diversity. For example, she said, when you ask companies whether their CEO prioritizes gender diversity, about three-quarters of companies agree. But when you survey the employees, just 37% of women and 49% of men feel that way. Also, while 43% of women believe women are given fewer opportunities than men, only 12% of men agree.
Ruchika Lal, a vice president at American Express, said 95% of her company’s senior leaders undergo formal gender bias training. She believes this is a positive step toward raising awareness. “We’re a global company,” Lal said. “If we don’t have very fair representation across different communities or even genders, we’re not going to be successful.” Her CEO is “a big advocate of diversity in every form,” she added.
If there is gender bias at the institutional level, it often gets internalized at the individual level, the panelists agreed. Valentino talked about widespread “micro-inequities” that occur on a daily basis in most companies, and how she tries to remain vigilant and combat them. “For example if a male colleague takes credit for the idea of a female colleague, I’ll say [something like], ‘Yeah, actually I heard Jane saying that earlier. I think it was a really good point. I think since we all agree, let’s build on that.”
Valentino said she has noticed unconscious gender bias in herself: feeling like she needs to be “perfect” before going for a promotion, or feeling somehow “selfish” when asking for a raise. “Getting over that has been really important,” she said, noting that she tries to build her confidence by placing herself in business situations outside her comfort zone. Lal agreed, “The more I have been fearless, the more I’ve been able to take chances … the more it’s worked for me.”
“The more I have been fearless, the more I’ve been able to take chances … the more it’s worked for me.” –Ruchika Lal
On the subject of asking for promotions, American Express’ Lal has seen a big difference between men and women. “[Men will say,] ‘Ruchika, I think I’m ready for it. I think I’ll do a kick-ass job. I think I’m the best candidate you can get’ … There is no doubt in their minds. And women will come in and they might want the job, but I have rarely … seen them ask for it or close it.” Instead, they will dance around the question. When she coaches women, she points out that men, by exuding confidence, often beat them to a job.
Credit Suisse’s Verma added that women need to ask not only for the promotions and compensation they want, but also for spots on leadership committees and for high-level recruiting positions. Women don’t typically get considered for these positions, but they are critical to advancement.
A Seat at the Table, Literally
Many of the panelists remarked on how difficult it can be to detect gender bias in oneself. “My friends and I will be talking and say to each other, ‘Why didn’t you say that to your boss?… This is where you could’ve made a difference, this is how a man would’ve handled it.’ Yet I haven’t advocated for myself as much as I should,” Verma said.
Dow Chemical’s Allen said she never thought of herself as a shrinking violet: “Oh, that’s not me, I’m sticking my hand up, I’m competitive.” But she described how she once hadn’t tried for a particular role because she assumed she didn’t have enough experience. She found out much later that the hiring manager had actually thought it would be a step back for her. “I’m really struck by the mismatch between our own perception and what people around us are thinking,” she said.
For women in business, having a seat at the table can be important literally as well as figuratively. American Express’ Lal recalled a mentor once telling her that when there are a few seats left at a conference table and also chairs around the side of the room — women will automatically gravitate to the side chairs. Make sure you don’t do that, she was told by her mentor. “‘When you have a seat at the table, your voice matters. So speak up.’”
Monica McGrath, a former Wharton vice dean, said she felt optimistic despite McKinsey’s projection that a century-long battle for gender parity awaited women. She cited the experience of the historic Union League of Philadelphia — the venue of the summit — as an example of the gains women have made. “In 1983, when I first came into this building, I had to come in the side [entrance] because women were not allowed to be members,” she said. With attendees of the Wharton Women’s Summit now filling its rooms, “there are more women in this building today than in the last 200 years.”