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Revisiting the Pipleline

Progress on gender diversity at work has stalled. To achieve equality, companies must turn good intentions into concrete action.

Companies report that they are highly committed to gender diversity. But that commitment has not translated into meaningful progress. The proportion of women at every level in corporate America has hardly changed. Progress isn’t just slow. It’s stalled.
That’s what we found in Women in the Workplace 2018, a study conducted by McKinsey in partnership with LeanIn.Org. In the fourth year of our ongoing research, we probe the issues, drawing on data from 279 companies employing more than 13 million people, as well as on a survey of over 64,000 employees and a series of qualitative interviews.

Women are doing their part. For more than 30 years, they’ve been earning more bachelor’s degrees than men. They’re asking for promotions and negotiating salaries at the same rates as men. And contrary to conventional wisdom, they are staying in the workforce at the same rate as men.

Now companies need to take more decisive action. This starts with treating gender diversity like the business priority it is, from setting targets to holding leaders accountable for results. It requires closing gender gaps in hiring and promotions, especially early in the pipeline when women are most often overlooked. And it means taking bolder steps to create a respectful and inclusive culture so women—and all employees—feel safe and supported at work.

Revisiting the pipeline

Based on four years of data from 462 companies employing more than 19.6 million people, including the 279 companies participating in this year’s study, two things are clear: one, women remain underrepresented, particularly women of color. Two, companies need to change the way they hire and promote entry and manager-level employees to make real progress.

Women remain underrepresented

Since 2015, the first year of this study, corporate America has made almost no progress improving women’s representation. Women are underrepresented at every level, and women of color are the most underrepresented group of all, lagging behind white men, men of color, and white women (Exhibit 1).

For the fourth year in a row, attrition does not explain the underrepresentation of women. Women and men are leaving their companies at similar rates, and they have similar intentions to remain in the workforce. Over half of all employees plan to stay at their companies for five or more years, and among those who intend to leave, 81 percent say they will continue to work. It’s also worth noting that remarkably few women and men say they plan to leave the workforce to focus on family.

Hiring and promotion will be crucial to progress

The two biggest drivers of representation are hiring and promotions, and companies are disadvantaging women in these areas from the beginning. Although women earn more bachelor’s degrees than men, and have for decades, they are less likely to be hired into entry-level jobs. At the first critical step up to manager, the disparity widens further. Women are less likely to be hired into manager-level jobs, and they are far less likely to be promoted into them—for every 100 men promoted to manager, 79 women are (Exhibit 2). Largely because of these gender gaps, men end up holding 62 percent of manager positions, while women hold only 38 percent.

For the fourth year in a row, attrition does not explain the underrepresentation of women. Women and men are leaving their companies at similar rates, and they have similar intentions to remain in the workforce. Over half of all employees plan to stay at their companies for five or more years, and among those who intend to leave, 81 percent say they will continue to work. It’s also worth noting that remarkably few women and men say they plan to leave the workforce to focus on family.

Hiring and promotion will be crucial to progress

The two biggest drivers of representation are hiring and promotions, and companies are disadvantaging women in these areas from the beginning. Although women earn more bachelor’s degrees than men, and have for decades, they are less likely to be hired into entry-level jobs. At the first critical step up to manager, the disparity widens further. Women are less likely to be hired into manager-level jobs, and they are far less likely to be promoted into them—for every 100 men promoted to manager, 79 women are (Exhibit 2). Largely because of these gender gaps, men end up holding 62 percent of manager positions, while women hold only 38 percent.

This early inequality has a profound impact on the talent pipeline. Starting at the manager level, there are significantly fewer women to promote from within and significantly fewer women at the right experience level to hire in from the outside. So even though hiring and promotion rates improve at more senior levels, women can never catch up—we’re suffering from a “hollow middle.” This should serve as a wake-up call: until companies close the early gaps in hiring and promotion, women will remain underrepresented.

If companies continue to hire and promote women to manager at current rates, the number of women in management will increase by just one percentage point over the next ten years. But are companies start hiring and promoting women and men to manager at equal rates, we should get close to parity in management—48 percent women versus 52 percent men—over the same ten years.

To read the complete article:

https://www.mckinsey.com/featured-insights/gender-equality/women-in-the-workplace-2018 

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