Women leaders are switching jobs at the highest rates we’ve ever seen, and ambitious young women are prepared to do the same. To make meaningful and sustainable progress toward gender equality, companies need to go beyond table stakes.
We’re amid a “Great Breakup.” Women are demanding more from work, and they’re leaving their companies in unprecedented numbers to get it. Women leaders are switching jobs at the highest rates we’ve ever seen—and at higher rates than men in leadership. That could have serious implications for companies. Women are already significantly underrepresented in leadership. For years, fewer women have risen through the ranks because of the “broken rung” at the first step up to management. Now, companies are struggling to hold onto the relatively few women leaders they have. And all of these dynamics are even more pronounced for women of color.
The reasons women leaders are stepping away from their companies are telling. Women leaders are just as ambitious as men, but at many companies, they face headwinds that signal it will be harder to advance. They’re more likely to experience belittling microaggressions, such as having their judgment questioned or being mistaken for someone more junior. They’re doing more to support employee well-being and foster inclusion, but this critical work is spreading them thin and going mostly unrewarded. And finally, it’s increasingly important to women leaders that they work for companies that prioritize flexibility, employee well-being, and diversity, equity, and inclusion (DEI).
If companies don’t take action, they risk losing not only their current women leaders but also the next generation of women leaders. Young women are even more ambitious and place a higher premium on working in an equitable, supportive, and inclusive workplace. They’re watching senior women leave for better opportunities, and they’re prepared to do the same.
The state of the pipeline
Despite modest gains in representation over the last eight years, women—and especially women of color—are still dramatically underrepresented in corporate America. And this is especially true in senior leadership: only one in four C-suite leaders is a woman, and only one in 20 is a woman of color (Exhibit 1).
Moreover, most companies are grappling with two pipeline problems that make achieving gender equality in their organizations all but impossible:
1. The ‘broken rung’ remains unfixed. For the eighth consecutive year, a broken rung at the first step up to manager is holding women back. For every 100 men who are promoted from entry-level roles to manager positions, only 87 women are promoted, and only 82 women of color are promoted. As a result, men significantly outnumber women at the manager level, and women can never catch up. There are simply too few women to promote to senior leadership positions.
2. More women leaders are leaving their companies. Now companies have a new pipeline problem. Women leaders are leaving their companies at the highest rate we’ve ever seen—and at a much higher rate than men leaders. To put the scale of the problem in perspective: for every woman at the director level who gets promoted to the next level, two women directors are choosing to leave their company.
Why women leaders are switching jobs
Women leaders are demanding more from their companies, and they’re increasingly willing to switch jobs to get it. Three primary factors are driving their decisions to leave:
1. Women leaders want to advance, but they face stronger headwinds than men. Women leaders are as likely as men at their level to want to be promoted and aspire to senior-level roles. In many companies, however, they experience microaggressions that undermine their authority and signal that it will be harder for them to advance. For example, they are far more likely than men in leadership to have colleagues imply that they aren’t qualified for their jobs. And women leaders are twice as likely as men leaders to be mistaken for someone more junior. Women leaders are also more likely to report that personal characteristics, such as their gender or being a parent, have played a role in them being denied or passed over for a raise, promotion, or chance to get ahead.
2. Women leaders are overworked and underrecognized. Compared with men at their level, women leaders do more to support employee well-being and foster DEI—work that dramatically improves retention and employee satisfaction but is not formally rewarded in most companies. Indeed, 40 percent of women leaders say their DEI work isn’t acknowledged at all in performance reviews. Spending time and energy on work that isn’t recognized could make it harder for women leaders to advance. It also means that women leaders are stretched thinner than men in leadership; not surprisingly, 43 percent of women leaders are burned out, compared with only 31 percent of men at their level.
3. Women leaders are seeking a different culture of work. Women leaders are significantly more likely than men leaders to leave their jobs because they want more flexibility or because they want to work for a company that is more committed to employee well-being and DEI. And over the last two years, these factors have only become more important to women leaders: they are more than 1.5 times as likely as men at their level to have left a previous job because they wanted to work for a company that was more committed to DEI.
The factors that prompt current women leaders to leave their companies are even more important to the next generation of women leaders. Young women care deeply about the opportunity to advance—more than two-thirds of women under 30 want to be senior leaders. Young women are also more likely than current women leaders to say they’re increasingly prioritizing flexibility and company commitment to well-being and DEI. Companies that don’t take action may struggle to recruit and retain the next generation of women leaders.
An intersectional look at women’s experiences
Many women experience bias not only because of their gender but also because of their race, sexual orientation, a disability, or other aspects of their identity—and the compounded discrimination can be much greater than the sum of its parts. As a result, these groups of women often experience more microaggressions and face more barriers to advancement. Notably, women of color are more ambitious despite getting less support: 41 percent of women of color want to be top executives, compared with 27 percent of White women. It’s critical that companies and coworkers are aware of these dynamics, so they can more effectively promote equity and inclusion for all women. Although no study can fully capture the experiences of women with traditionally marginalized identities, this year’s findings point to these distinct experiences:
Latinas and Black women are less likely than women of other races and ethnicities to report their manager supports their career development. They also experience less psychological safety2 —for example, less than half of Latinas and Black women say people on their team aren’t penalized for mistakes.
Asian women and Black women are less likely to have strong allies on their teams. They are also less likely than White women to say senior colleagues have taken important sponsorship actions on their behalf, such as praising their skills or advocating for a compensation increase for them.
Latinas and Asian women are more likely than women of other races and ethnicities to have colleagues comment on their culture or nationality—for example, by asking where they’re “really from.”
LGBTQ+ women and women with disabilities report experiencing more demeaning and “othering” microaggressions. Compared with women overall, they’re more likely to have colleagues comment on their appearance or tell them that they “look mad” or “should smile more.”
Women with disabilities often have their competence challenged and undermined. They are significantly more likely than other groups of women to have their judgment questioned in their area of expertise and to have colleagues get credit for their ideas.
Five steps companies can take to navigate the shift to remote and hybrid work
It’s not enough to tweak old policies and practices; companies that are transitioning to remote and hybrid work need to fundamentally rethink how work is done. To start, companies would be well served to focus their efforts in five areas:
1. Clearly communicate plans and guidelines for flexible work. As remote- and hybrid-work policies continue to evolve, it’s important for companies to share guidelines about who can work remotely and why so people don’t feel they’re being treated unfairly. It’s also important that companies provide clear guidelines to help employees navigate the day-to-day complexities of remote and hybrid work—for example, by establishing specific windows during which meetings can be scheduled and employees in different time zones are expected to be available.
2. Gather regular feedback from employees. Only about half of companies have surveyed employees on their preferences for remote and hybrid work over the past year. As companies roll out new remote- and hybrid-work norms, they will want to keep a regular pulse on what’s working for employees and what needs to be improved.
3. Invest in fostering employee connectedness. This means being intentional about working norms—for example, having everyone join meetings via videoconference so that it’s easier for employees to participate when they are working remotely. It also means finding new ways to foster camaraderie and connection, such as making creative use of technology to facilitate watercooler-style interactions and team celebrations. Companies could also benefit from dedicating resources to team bonding events and, whether they’re virtual or in person, taking special care to make sure that all employees feel included and that events are accessible to everyone.
4. Be purposeful about in-person work. Many employees don’t want to come into the office to do work they can just as easily do at home. In light of this, many companies are starting to refocus in-person work on activities that take advantage of being together, such as high-level planning, learning and development training, and bursts of heavy collaboration.
5. Make sure the playing field is level. It’s important that employees who choose remote- or hybrid-work options get the same support and opportunities as on-site employees. Managers play a central role here, and many could benefit from additional training on how to foster remote and hybrid employees’ career development and minimize flexibility stigma. Equal access to mentorship and sponsorship is also key, yet less than half of companies offer virtual mentorship and sponsorship programs. Finally, companies can put safeguards in place to ensure employees who take advantage of remote- and hybrid-work options aren’t disadvantaged in performance reviews. This means communicating to managers that employees should be evaluated based on measurable results—not when or where they work—and closely tracking performance ratings and promotions for remote, hybrid, and on-site employees.