Women Leaders

Why Companies Lose 17 Percent of Women Employees at Mid-Career

While many women, for many different reasons, take a career off-ramp for a number of reasons, most don't want to be stuck in a cul-de-sac.
Why Companies Lose 17 Percent of Women Employees at Mid-Career
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7 min read
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With unemployment at a low of 4.3 percent and the battle for talent only intensifying, organizations can’t afford to lose high-performing employees if they want to stay competitive and innovative in today’s economy. And yet, women’s participation in the U.S. workforce dwindles during the mid-career stage, from 46 percent at entry level to a mere 29 percent by the time they reach VP status. That’s a 17 percent decrease, and no small matter. For an organization of 500 employees, that’s 85 employees over a span of a few years. While women drop-out for a number of reasons, most don’t want to remain on the sidelines.

In fact, research found that 93 percent of highly qualified women who leave want to return to their careers, but find it increasingly difficult to do so. This consistent cycle of women dropping out of the workforce creates detrimental losses for companies and women alike.

How does the women's departure affect organizations?

From lower revenues to loss of innovation, women’s departure from the workplace can affect a company’s bottom line far beyond the fairness of gender parity. McKinsey & Company found that companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective industry medians. Additionally, Catalyst determined companies with the most women on the board of directors had 16 percent higher return on sales than those with the least.

Related: Why Is This VC Firm Doubling Down on Women Entrepreneurs? Because It's Good for Business.

Gender diversity among all ranks has become an increasingly competitive driver for acquiring new talent. Seeing women playing a role at every level of the company allows new hires to see themselves building a career and advancing with the company. Few examples of women in leadership can lead new talent to see themselves elsewhere, possibly in a competing organization.

Women’s mid-career drop off can also result in a loss of company creativity and innovation. Researchers from Carnegie Mellon found that once women make up more than 50 percent of a team, the collective intelligence rises above the average, which leads to greater ingenuity, collaboration and decision-making. As companies move to improve gender diversity, it’s important to understand why and where these mid-career drop-offs happen in the first place.

Why does mid-career drop-off occur?

For many women, the middle part of a career is where long-term relationships and life decisions start to play a larger role, compared to the earlier years of their 20’s and 30’s. Sally Blount, dean of Northwestern University’s Kellogg School of Management, calls this the “Mid-Career Marathon.” This is when matters of marriage, having children, caring for aging parents and pursuing more education start to add diversions to a woman’s career path.

Although men often experience similar life pivots during this timeframe, Blount notes that “by choice, necessity, or fault, women typically pick up more of the burden for meeting their families’ growing non-work needs during this phase.” In fact, the Center for Work-Life Policy found the number one reason women leave the fast lane is family time, while the number one reason men leave is to change careers.

Women who take off-ramps to have kids or care for elderly parents can be stranded in the race to the C-Suite, feeling pressure to put in the same office face time as they had previously established. Fear of asking for adjusted work hours or more remote working days can leave those 93 percent of highly qualified women stuck on the off-ramp, while companies lose out on growing talent.

How do firms avoid losing women employees mid-career?

If organizations want to ensure future business success and innovation, action needs to be taken. There are ways organizations can enable women to advance in their careers.

Provide mentoring opportunities.

Learning from and acting on the guidance of others through mentoring is the most powerful tool women have at their disposal throughout their careers. And women want it. One survey found 67 percent of women rate mentorship as highly important in career advancement. Finding the right mentor or mentors can provide women with a sounding board for challenges, and a supportive network for growth.

But accessing mentorship can be especially difficult for women. Whether it’s not being sure how to establish mentoring relationships, or being hesitant of the response they’ll receive, women can shy away from mentorship. To solve this, many organizations are turning to formal mentoring programs to take away this barrier.

Related: A Girl's Guide to Finding an Awesome Mentor (and Being One)

With a formal mentoring program, organizations establish a pool of mentors from which mentees can select, or in some cases, the organization matches pairs based on profile characteristics, eliminating the hesitation women feel around establishing the relationship. In doing so, one Catalyst survey found that women who found a mentor through a formal program were 50 percent more likely to be promoted than those who found mentors on their own.

Through mentoring, an opportunity to develop leadership skills, tackle tough subjects like negotiations and promotions, and initiate networks puts women in more advantageous positions to progress through the mid-career drop off and into leadership.

Create career and schedule flexibility.

Demands upon women, between family commitments outside the office and time spent at work, cannot be eradicated overnight, but companies can help to lessen the predicament of having to pick one or the other. More flexibility in work schedules and working remotely helps to harmonize the noisy chaos of balancing work, picking kids up from school or taking an aging parent to a doctor appointment.

Maternity leave requires a similar consideration. But the issue isn’t just maternity leave. It’s re-entering the workplace as well. This is a vulnerable time when a woman needs to reestablish her routine between work and her growing family. Too much rigidity on re-entry can push many women to believe that they can’t or won’t do both, causing them to drop out of the workforce indefinitely. Designing a re-entry plan or even a staggered re-entry can help both organizations and women set up a regimen for getting reacquainted with the workload.

Organizations also need to re-think the rigidity of career trajectories for employees. Advancement in an organization is no longer limited to the proverbial “career ladder.” Today’s modern corporation offers employees the chance to move laterally, vertically, and sometimes diagonally -- more like a career lattice -- to explore new skills, projects and positions. Establishing and allowing flexibility will enable longer, more diversified careers within a company, equating to greater employee loyalty and engagement over time.

Related: Models Turned Millionaires: 10 Women Who Launched Their Careers From the Pages of 'Sports Illustrated' 

With women making up almost half the workforce, new policies and standards must be instated in order to provide them the opportunity to stay and grow in their companies. The time, effort and money it takes to enable and grow women employees just to see 17 percent leave before they reach the leadership level is not just careless, it’s bad business.

Organizations can unlock this talent pipeline with the right mindset, strategy and programs to enable women to excel right through the mid-career marathon, and into the final leg of the workplace journey.

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