In 1950, only one in three women was active in the labor force, and by 1998 that changed where we saw three in five women active in the labor force. In 1998 women represented 45% of the labor force which increased to 48% by 2008. As of January 2020, women outnumber men in the workforce since 2010 making up 50.04% of the labor force. However, does this translate to more women in corporate executive roles?
In spite of seeing more women rise to the top levels in corporate roles, according to Women in the Workplace, they still continue to be underrepresented at all levels. There is no question advancement at the top for women has slowed since the 1990s due to the gender wage gap, gender managerial inequality, and occupational gender segregation and they still struggle to land roles at the C-level today.
C-Level Corporate Jobs
High-level managers are often called C-level executives because typically their titles begin with ‘C’ meaning Chief, such as Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operating Officer (COO). Those who maintain C-Level positions are the most influential in a corporation and lead stock decisions, hire and fire authority, and enjoy some of the highest salaries in the country.
Although there is increasing evidence that women in C-level positions can have a positive impact on a company’s performance, according to Korn Ferry only 25% of women hold senior executive positions among the top 1,000 companies in the US. Of those, only 5.8% of women hold the title of CEO. This begs the question why?
Progress at the top is generally seen as the ‘glass ceiling’ or ‘broken rung’ and generally begins in lower levels of management. Women make up 72% of those promoted or hired to manager level resulting in women getting stuck at the entry-level. The ensuing results, of course, is men hold 62% of manager-level positions while women make up only 38%.
Inequality at this level obviously will have a long term impact on the talent pipeline for women.
With fewer women making it through the lower levels of management, it’s no wonder we end up seeing fewer women in senior executive roles for there is a much smaller pool of candidates to choose from.
Women In Executive Management
The landscape for women in executive management has changed over the last five-years where we see the representation of women in Corporate America has grown. Even though the number of women running a Fortune 500 company has hit a new high, there still remains a gender and pay gap for women in senior executive positions.
In 2011 we saw only 12 female CEO’s in Fortune 500 companies increasing to 21 in 2016 topping out at 37 in 2020. According to Fortune magazine, the number of women running these top corporations is influenced by leadership changes and companies either falling off the list or new companies making it onto the list. Regardless, the number of women represented at this level is abysmal. Not one woman in the top 500 companies is a black or Latino woman.
Only 5.8% of women running Fortune 500 companies of which only 7 are in the top 100 companies. Women are more concentrated at the bottom of Fortune 500 companies where they are smaller in size. The leadership gap seems universal although female representation does vary from industry to industry. Women only make up 23% of STEM professionals unlike healthcare with 49% in leadership positions.
Minority Women In Executive Management
Although we have seen more women rise to the top levels in companies in the last five years, women continue to be underrepresented at every level and parity still remains out of reach especially for women of color. They represent only 4% of the highest paid jobs in the US even in industries like healthcare and retail where women significantly outnumber men. Women of color are also less likely to be given opportunities to grow than men where only 18% of new management positions being filled by women of color.
The Gender Pay Gap
The last 20 years show mixed results when you look at women’s earning power with full-time working women making between 76-81 cents in the dollar compared with men. Although women with college degrees have seen a 22% increase in the past two decades, women without a college degree have seen little to no increase. It is thought the pay gap will continue to lag even if women have more education than men.
In 2020 women on average earn 81 cents for every dollar than their male counterparts. This means over a period of 40 years in the workforce, it is estimated that women stand to lose $900,000 due to the gender pay gap on average. Part of the reason for this disparity is that women are more likely to take a break in their careers to have children. Once they have children, they tend to take on lessor roles that give them more flexibility to raise their children.
The gender pay gap doesn’t only extend to women or minorities in lower levels of management, it also extends to the highest levels of the corporate world. ExecThread reports that top male executives are approached more frequently with higher-paying opportunities than their female counterparts. They found that men being recruited for top positions were presented with opportunities that paid an average of $30,000 more than women. Of the 18 members that were approached with a high and low-end salary range of $500,000, 17 of these were men and only one was a woman supporting the premise that more men are approached for high paying top executive roles in Fortune 500 companies.
ExecThread also ran a second analysis on a slightly larger set of offers using statistical analysis combining various job characteristics like seniority level, industry, and job type. The results still found a gender gap where the job opportunities that recruiters offered female executives paid $25,000 less than males.
Gender Diversity and Performance
While it is not proven that women are better at running a business, there is a general consensus that having diversity in the workforce, not just gender but across cultures, improves the performance of a company. Researches are finding that diversity at the senior level leads to better problem solving and greater business benefits.
Women in top roles are keen to accomplish organizational goals just like men, however, there are fundamental differences in their approach. Ragini Verma, an associate professor at the Perelman School of Medicine at the University of Pennsylvania, implies that men are more prone to taking action whereas women tend to carefully analyze a problem and are more conservative in the action they do take.
This premise is supported by Joe Carella, the assistant dean at the University of Arizona, Eller College of Management when he conducted his own analysis of Fortune 500 companies. What he found was companies with women in top management roles experience what he calls ‘innovation intensity.’ He suggests that these “women produce more patents by an average of 20 percent more than teams with male leaders.”
Female leaders tend to be more engaged because they are interested in transforming teams with greater levels of motivation and inspiration. Rather than sit at their desks, they are more likely to interact with employees offering coaching, support, and encouragement as needed whereas men tend to be more transactional.
In general, women tend to give credit away whereas men tend to take personal credit for success. They have a natural tendency to claim success as a result of their own abilities and intelligence and see themselves as having all the answers. On the other hand, women will seek advice from others and consider their views before offering a solution. The ensuing result is that women are not threatened by involving others in the decision-making process which is why we need more diversity in executive roles.
The 2020 COVID-19 Effect
Closing the pay gap is now not the only issue in corporate America. Women and minorities across the board gained 11.1 million jobs between the end of the global financial crisis in 2010, and the start of the COVID-19 crisis in February 2020. During the coronavirus pandemic, women have lost jobs faster than men and at a time when they are having to manage their households and childcare which means these gains were almost wiped out.
We know the pandemic has impacted millions of Americans, yet women have been disproportionately affected. The fallout for women across the board due to COVID-19 is disastrous as an ongoing consequence of longstanding racial and gender inequality. Although women made up 50.04% of the overall workforce at the beginning of 2020, they accounted for 55% of the 20 million jobs lost in April this year.
Women also make up the majority of the frontline workforce risking their lives to provide health-care and other essential services and struggling to make ends meet especially having to manage child-care if working. According to the National Women Law Center, women accounted for 83% of job losses in the education and health-care sectors in spite of representing 77% of the industry workforce.
With statistics like this, how can we close the gender and pay gap for all women, not just women in executive management? If equity is not part of the mindset of Fortune 500 companies right now, this will exacerbate the deepening gender and racial wage gaps we are already struggling with. Fortune 500 companies can treat diversity like the business initiative it should be and build on gains over the last five years or treat it as an option and lose momentum in gaining more diversity in the workforce.