By: Michelle Bogan
I recently analyzed the data in McKinsey’s Lean In reports, Best Places to Work lists and publicly available company annual reports to develop deeper insights on why companies have such a difficult time moving more women into leadership roles. What struck me is that the majority of the workforces at top-rated companies for women have been with those companies for less than 2 years. This points to three key things:
- There is a lot of newness in the workforce, and it takes time and focused effort to make “stickiness” happen — clearly there is an engagement opportunity
- Turnover is still high in these companies — and most top places to work have much lower turnover than industry average, so for most companies this is even worse
- There is a huge cost to these companies in replacing their employees that has a direct impact to the bottom line and stock performance
On average, entry level corporate employees cost 50% of their salary to replace; middle managers cost closer to 100% and executives up to 200% of their salary. For simple math, let’s assume a mid-level manager is making $100k a year. It will cost $100k to replace her, on top of the replacement person’s $100k salary. So that’s $200k — plus the lost productivity, lost business and hit to morale that will occur with her walking out the door.
If I were a leader in one of these companies, I would be terrified that the time and resources I have dedicated to women’s initiatives would be wasted because so many women are leaving.
So how do you make sure your investment in women pays off? Look at your tenure and time to promotion data for the first clues. Are your women staying as long as men? Are they getting promoted at the same rate and within the same amount of time as men? If you answered yes, then your investments are probably in the right places. If not, there are operational and/or cultural elements holding women back, related to some combination of evaluations, staffing, promotions, succession planning, mentoring and sponsorship.
Focusing on recruiting more women without focusing equally, or more, on how to make it work for them to stay, succeed and be promoted multiple times in their careers will only provide a temporary bandaid to a gender parity problem. And with all the online forums for women to share openly about their experiences with companies, it will make it harder to recruit other women in the future because the secret will be out on the lack of a path to seniority. Investing in making it work for talented women to stay, thrive and contribute at higher and higher levels is the key to success.
Throughout her twenty-five-year career, Michelle Bogan has mentored colleagues and clients, founded and led women’s groups, and helped promote many women and men to leadership positions. In 2018, she founded Equity for Women to advance the mission of empowering women at work.
Previously published on www.ellevatenetwork.com.