A new report from McKinsey& Company titled, “Unlocking the full potential of women in the U.S. economy,” delivers little we didn’t already know about why women aren’t advancing to the tops of organizations but it offers great analysis on why we should care.
The global management consulting firm surveyed 2,500 men and women and interviewed 30 chief diversity officers and experts about why highly capable and motivated women reject top positions in organizations and either pursue jobs outside corporations or leave corporate America altogether. A key objective of the report, however, was to understand how women contribute to the U.S. economy.
The lack of women at the top isn’t a recruitment problem. It’s a retention problem. There is a healthy pipeline of talented and ambitious women. Last year 50 percent of all undergraduate degrees in the U.S. went to women, however only 50 percent of the college educated workforce was made up of women. And companies are good at recruiting women, according to the report. Parental leave, flex schedules, part-time options all make work more appealing for women.
But what’s happening is women are dropping off at each rung on the corporate ladder. According to Sylvia Hewlett, from the Center for Work-Life Policy (CWLP), women comprise 53 percent of new hires, but only 37 percent of managers, 26 percent of vice-presidents, and just 14 percent of executive committees.
Why? We’ve heard it before –too few of role models, exclusion from networks, not having a sponsor, lack of meaningful work, aversion to corporate politics and subtle but deeply ingrained discrimination.
We’ve also heard before the reason gender diversity matters. There is a large, and growing, body of research connecting women at the tops of organizations to a strong bottom line performance. But the McKinsey report makes a fresh and compelling case for why women matter to the overall health of the U.S. economy.
In 1970, women held 37 percent of all jobs. In 2009, that number grew to 48 percent, equaling 38 million more women at work. According to McKinsey, without these women, “our economy would be 25% smaller today—an amount equal to the combined GDP of Illinois, California and New York.” In order for the country to sustain its historic GDP growth rate of three percent, we need to expand the workforce and increase productivity. And women are key to both.
According to McKinsey’s data, approximately 76 percent of American women between the ages of 25 and 54 are in the workforce, compared to 87 percent in Sweden. If the U.S. could increase the workplace participation rate of women in each state to 84 percent, it would add 5.1 million women – the equivalent of three or four percent GDP growth.