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Why We Need More Women in Management Roles

Industry News

While the number of women in the workplace has steadily increased overall, the percentage of women in management at the upper levels – such as female C-Suite executives and corporate board members – continues to lag behind. Does this type of gender discrimination represent a missed opportunity for Corporate America? 


courtesy to Beste Erener @ TBWA
Courtesy to Beste Erener @ TBWA

A Short History of Women in the Workplace and Gender Discrimination


While the recorded history of women in Western society working in the home goes back several millennia, the history of women in the workplace is a relatively recent phenomenon.


At the dawn of the Industrial Revolution in the United Kingdom’s Victorian era, very few women held positions of power outside the home – with one notable exception: the top-level executive position held by Queen Victoria!


Indeed, during the second half of the 19th century, jobs at the new industrial factories (blue collar jobs) as well as the emerging class of administrative, legal and commercial functions (which soon became known as white-collar jobs, thanks to the prominent fashionable white colors attached to men’s shirts at the time) were nearly all held by men.


This began to change dramatically in the mid-20th century. Labor shortages during World War II marked a start in the reversal of gender discrimination in the American workplace.


According to statistics published in The American Economic Review, the rate of employment of married white women in the workplace began to rise dramatically during 1940, as men were called into the armed services. In the post-war era, many women gave up their “Rosie the Riveter” jobs and returned to the home — nonetheless, the percentage of married white women in the workplace continued to increase at the faster rate. By 1960, the percentage was 30%, nearly double the rate in 1940.


A study on Gender Inequality in the Workforce published in the Journal of Business Studies Quarterly indicates that by the year 2000, the percentage of women in the workplace had risen to 48%, achieving near parity with men. But before we can celebrate the success of ‘women empowerment’ across the board, the study authors point out that gender inequality remains a fact of life when it comes to top management positions* — a situation described since the 1980s as the “Glass Ceiling” phenomenon.


(*Compensation is another area of widespread gender discrimination. According to the study, on average, women make less than men working in equivalent positions holding similar responsibilities.)


How Much Disparity Exists for Women in Management Positions?


According to a report by The Wall Street Journal, the percentage of women in the workplace is highest among entry level positions (mid 40%). However, as the seniority of the jobs increase — from entry level, to manager, to senior manager/director, to vice president, to senior vice president to the C-Suite – the corresponding percentage of women in those positions decreases in a nearly straight line. Women represent less than 20% of the top C-Suite executive positions.


The CEO position is even more elusive for women. An analysis by Catalyst of the women who currently hold the title CEO among the Standard and Poors (S&P) 500 top companies indicates that, as of January 2017, there were only 29 women CEOs out of the entire S&P 500 company list. In other words, women hold the title of CEO at fewer than 6% of S&P 500 companies.


This number corresponds to survey results published in a Peterson Institute for International Economics working paper. Among nearly 22,000 firms surveyed around the world in 2014, fewer than 5% had a woman CEO, and nearly 60% had no female corporate board members at all.

Women In Leadership
Image by Equilar – January 24, 2017


Why Aren’t There More Women in Upper Management Leadership Positions? Is It Due to Gender Discrimination Alone?


There are many possible reasons why women are less likely to be in senior management roles. Here are three to think about:


1.       Are There Enough Women in the Career Pipeline to Fill Future Executive Roles?


One line of reasoning is that the ability of any woman candidate to rise to a top position, such as CEO or corporate board member, is dependent upon having as large a number of female candidates moving up the same career ladder pipeline as male candidates.


However, given that women are now awarded more than half of all college degrees, the percentage of female MBA graduates and managers should continue to rise closer to parity with that of male MBA graduates and managers.


2.      Do Disparities Between the Type of Degrees Earned by Men and Women Make a Difference?


The relative percentage of MBA graduates and managers doesn’t tell the whole story, however. By other measures, there are even greater differences between men and women, starting as early as high school.


Studies by the National Center for Educational Statistics indicate that male high school students were more likely to earn STEM (science, technology, engineering, and mathematics) credits in physics, engineering, engineering/science technologies, and computer / information science.  (Female high school students, on the other hand, earned more credits in Algebra II, pre-calculus, advanced biology, chemistry, and health science technologies)



Gender Distribution of Bachelor's Degrees
Gender Distribution of Bachelor’s Degrees, image by The Washington Post



As these students enter university programs, the disparity in Bachelor of Science degrees becomes quite pronounced in favor of male graduates. The National Student Clearinghouse’s Science and Engineering Degree Attainment report shows that the percentage of women graduating with a BS in computer science dropped from 23% in 2004 to just 18% in 2014. Only 19% of engineering BS degrees were awarded to women in 2014.

Because technology industries are growing quickly, it’s possible that these relatively low graduation rates will reduce the relative number of women candidates climbing the career ladder in these key sectors for years to come.


3.      Are Men Preferentially Selected for Positions That Lead to Senior Management?


Another concern for women advancing to higher levels of management is the apparent tendency for female job candidates to be diverted away from jobs with profit-and-loss (P&L) responsibility in favor of management roles in human resources and investor relations departments. While these roles are important, they are less likely to serve as stepping stones to top level C-Suite positions (compared to candidates who have P&L responsibilities on their resume), giving male candidates a leg up in the career pipeline.


Why We Need More Women in Management Roles


As we discussed in a previous article on women in manufacturing, our changing manufacturing economy needs as many qualified, talented candidates as we can get. The shortage of candidates is not limited to manufacturing alone; in fact, the entire information technology (IT) sector faces a severe shortage.


Despite the need, many IT companies (or companies with mission-critical IT departments) need to learn ways to attract and retain women in management careers.


Not only will attracting more women help fill skill shortages, women in leadership roles bring other benefits as well. Indeed, business analysts are just beginning to quantify the concrete benefits that women in leadership roles bring to the table.


According to the Peterson Institute for International Economics working paper mentioned above, companies that hire 30% or more of women in corporate leadership roles (such as C-Suite executives, CEO, or corporate board members) are more profitable — achieving 1% increased net margins compared to companies with fewer women in leadership. (This 1% margin of net margin is quite significant overall – it’s equivalent to a 15% increase in profitability on average.)


Despite the statistical evidence that a higher number of women in leadership positions can be a net benefit to the bottom line, Americans surveyed by the Pew Research Center continue to hold a variety of opinions about women in both business and political leadership positions. Interestingly, most of the respondents believe that women in leadership roles are held up to a “higher standard” than men — a form of gender discrimination that most felt was responsible for keeping women from reaching top executive positions.


What do executives who work with women in leadership positions think?


In a survey of nearly 2,000 executives (including men and women) by Weber Shandwick and KRC Research, the survey respondents felt that male and female CEOs had more leadership traits in common than not.


Among the few outstanding differences, women leaders were seen to be more open and accessible, caring about others and more willing to speak to the media, including via social media platforms.


Given the current business climate and high expectations on social media, these characteristics seem like good reasons for promoting more women in leadership roles.


What do you think?


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