Largest study of women in the workplace shows companies need to treat gender diversity like the business priority it is and close gender gaps early in the pipeline. Until they do, meaningful progress will remain out of reach.
Today, McKinsey & Company and LeanIn.Org released Women in the Workplace 2018, the largest annual report on the state of women in corporate America. The report shows there is a disconnect in corporate America. Companies continue to report that they are highly committed to gender diversity but the proportion of women in their organizations barely budges. For this to change, companies need to treat gender diversity like the business imperative it is and close critical gender disparities at the first step-up to manager. The report also recommends additional actions that companies need to take to make progress.
“The business case for diversity is clear. Research shows it leads to better performance, more innovation, and stronger economic growth, said Sheryl Sandberg, COO of Facebook and founder of LeanIn.Org. “If women participated in the U.S. workforce at the same rate as men, we could grow the GDP by 5 percent. Still, year after year, the gender gap in corporate America remains. Improving the representation of women is the right thing to do and the smart thing to do. Women are leaning in. Companies need to lean in, too.”
Drawing on pipeline data from 279 companies employing more than 13 million people, the 2018 report shows that progress isn’t just slow – it’s stalled. Women continue to be vastly underrepresented at every level in corporate America, and for women of color, it’s even worse. Only about one in five senior leaders is a woman, and one in twenty five is a woman of color.
This disparity continues despite women doing their part. They’ve been earning more bachelor’s degrees than men for decades. 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 must do their part, too. That starts with treating gender diversity like the business priority it is, from setting targets to holding leaders accountable for results – especially managers and leaders, who are often the ones driving change.
In addition, companies should focus on the two biggest levers that move the pipeline: hiring and promotions. Although women earn more bachelor’s degrees than men, 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 one hundred men promoted to manager, seventy-nine women are. Largely because of these gender gaps, men end up holding 62% of manager positions, while women hold only 38%.
This early inequality has a profound impact on the talent pipeline: if companies continue to hire and promote women to manager at current rates, the number of women in management will increase by a mere 1 percentage point over the next ten years. But if companies start hiring and promoting women and men to manager at equal rates, we can nearly close the gender gap in management over the same ten years.
It’s critically important that companies take bold steps to balance the scales. This begins with establishing clear, consistent criteria for hiring and reviews, because when they are based on subjective impressions or preferences, bias comes into play. Companies should train employees so they understand how unconscious bias can impact who’s hired and promoted—and who’s not. And they should track outcomes to make sure candidates are being treated fairly.
One important consequence of the corporate gender gap is that being “the only one” is still a common experience for women. One in five women says they are often the only woman or one of the only women in the room at work—in other words, they are “Onlys.” Women who are Onlys are having a significantly worse experience than women who work with more women. They face more everyday discrimination – or microaggressions – like being subjected to demeaning comments or being mistaken for someone much more junior. They are also twice as likely to have been sexually harassed at some point in their career. And they are significantly more likely to think about leaving their job. Companies can make this “Only” experience less common by hiring and promoting women in greater numbers and finding ways to cluster women together on teams.
The report also confirms that sexual harassment continues to pervade the workplace. Thirty-five percent of women in corporate America experience sexual harassment at some point in their careers. And while 98% of companies have policies that make it clear sexual harassment is not tolerated, many employees think their company is falling short in putting policies into practice. Just 62% of employees say that in the past year their company has reaffirmed that sexual harassment won’t be tolerated, and a similar number say that they’ve received training or guidance on the topic. Moreover, only 60% of employees think a sexual harassment claim would be fairly investigated and addressed by their company—and just 32% believe it would be addressed quickly.
Fostering an environment where all employees feel included and respected starts with making sure everyone feels safe. That means communicating that sexual harassment is not acceptable and reviewing and handling reports of harassment promptly and decisively. Companies should also develop clear guidelines for what collegial and respectful behavior looks like—as well as unacceptable and uncivil behavior – and publicize them broadly.
“This research shows that there are concrete ways to take us from problems to investing in and implementing solutions to accelerate change,” said Kevin Sneader, global managing partner of McKinsey & Company.” We have an opportunity to make considerable strides in changing the status quo.”
Based on four years of data and insights from a range of experts, the report recommends six concrete actions that companies can take to make progress on gender diversity. It also highlights case studies on specific practices and outcomes from Allstate, Airbnb, Hilton, L’Oreal, Mozilla, P&G, Sodexo and VMware.
The complete Women in the Workplace 2018 report, including detailed findings and recommendations for change, is available at womenintheworkplace.com. From the website, organizations can download the report and sign up to participate in this ongoing research.
Women remain significantly underrepresented, and particularly women of color. 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. Only about one in five senior leaders is a woman, and one in twenty five is a woman of color.
Women are left behind from the get-go—and never catch up. Women are less likely to be hired into entry-level and manager-level jobs, and they are far less likely to be promoted to manager. For every 100 men promoted to manager, just 79 women are promoted. This gap in the promotion rate to manager is worse for women of color. Most notably, for every 100 men promoted to manager, 60 Black women are. Largely because of these gaps, men end up holding 62% of manager positions, while women hold only 38%. If companies continue to hire and promote women to manager at current rates, the number of women in management will increase by just 1% over the the next ten years. But if companies start hiring and promoting women and men to manager at equal rates, we should get close to parity in management – 48% women versus 52% men – over the same ten years.
Women get less of the manager support that advances careers. Women, especially women of color, receive less support from managers than men do — and Black women receive the least support of all. This is a problem because manager support is tied to positive outcomes like higher promotion rates and a stronger desire to stay with a company. Not surprisingly, women are also three times more likely than men to think that their gender has played a role in their missing out on a raise, promotion, or other chance to get ahead. Nearly a third of women of color—and almost half of Black women—think their race has played a role in missed opportunities and will make it harder for them to advance. And over a quarter of lesbian women feel the same way about their sexuality.
Most women face workplace microaggressions, and those encounters add up. Almost two-thirds of women have dealt with everyday discrimination – or microaggressions – like being subjected to demeaning comments or being mistaken for someone much more junior. Black women and lesbian women experience microaggressions at a higher rate than women overall, 69% and 71%, respectively. As their name suggests, microaggressions can seem small when dealt with one by one. But when repeated over time, they can have a major impact: women who experience microaggressions view their workplaces as less fair and are three times more likely to regularly think about leaving their job than women who don’t.
Sexual harassment continues to pervade the workplace. Thirty-five percent of women in corporate America experience sexual harassment at some point in their careers, from hearing sexist jokes to being touched in an inappropriately sexual way. For some women the experience is far more common. Fifty-five percent of women in senior leadership, 48% of lesbian women, and 45% of women in technical fields report they’ve been sexually harassed.
Companies need to underscore that sexual harassment won’t be tolerated and take concrete steps to back it up. Ninety-eight percent of companies have policies that make it clear sexual harassment is not tolerated, but many employees think their companies are falling short putting policies into practice. Just 62% of employees say that in the past year their company has reaffirmed that sexual harassment won’t be tolerated. Moreover, only 60% of employees think a sexual harassment claim would be fairly investigated and addressed by their company—and just 32% believe it would be addressed quickly.
Being “the only woman in the room” is still a common experience. One in five women say they are often the only or one of the only women in the room at work–in other words, they are “Onlys.”
This is twice as common for senior-level women and women in technical roles: around 40% of them are Onlys. Onlys are having a much worse time at work than other women. They are more likely to have their abilities challenged and to be subjected to unprofessional and demeaning remarks, and they are almost twice as likely to have been sexually harassed at some point in their careers.
Engaging men is critical but challenging. There is a strong correlation between the degree to which people experience bias and how personally committed they are to diversity. Lesbian women and women of color are the most personally committed to both gender and racial diversity, followed by gay men, men of color, and white women. White men are the least committed—and are also the least likely to say they experience bias. This commitment gap can be significant. For example, 67% of women of color are personally committed to gender diversity, but just 51% of white men are. There are also signs of a backlash among men: 15% think their gender will make it harder for them to get ahead, even though their representation in the workplace far surpasses women’s.
Company commitment to diversity is high but some employees see it as lip service. The vast majority of companies say that they’re highly committed to gender and racial diversity, yet the evidence indicates that many are not treating diversity as the business imperative it is. In contrast to what companies say about their commitment, only around half of all employees think that their organization sees gender diversity as a priority and is doing what it takes to make progress. Around 20% of employees say that their company’s commitment to gender diversity feels like lip service. And few organizations are making a strong business case for gender diversity: while 76% of companies have articulated a business case, only 13% have taken the critical next step of calculating the positive impact on the business.
1) Get the basics right – targets, reporting and accountability. Experts agree that setting goals, tracking and reporting progress, and rewarding success are key to driving organizational change. Yet when it comes to gender diversity, more companies need to put these practices in place. Only 38% of companies set targets for gender representation and only 12% share a majority of gender diversity metrics with their employees. Only 42% hold senior leaders accountable for making progress toward gender parity, and even fewer hold managers and directors accountable.
2) Ensure that hiring and promotions are fair. Hiring and promotions are the two biggest levers for changing the representation of women across the pipeline, yet very few companies have end-to-end processes in place to ensure fair practices. Fewer than one in three companies sets diversity targets for hiring and promotions, even though setting goals is critical to achieving them. Fewer than one in four companies uses tools to reduce bias when reviewing résumés, and fewer than half of companies require diverse slates of candidates for external hiring. Just 19% of companies require unconscious bias training for employees involved in hiring – and a mere 4% require training for employees involved in performance reviews.
3) Make senior leaders and managers champions of diversity. Only 39% of women – and 47% of men – say that gender diversity is a high priority for their manager and just over 1 in 5 employees believes senior leaders are held accountable for results. Less than a third of employees say that managers often challenge biased language and behavior when they see or hear it. Until leaders at all levels understand the problem, are trained to help solve it, and are held accountable for making progress, it will be hard to achieve lasting change.
4) Create an inclusive and respectful culture. Companies should develop clear guidelines for what collegial and respectful behavior looks like—as well as unacceptable and uncivil behavior. To be treated seriously, these guidelines should be supported by a clear reporting process and swift consequences for disrespectful behavior. Women who believe that disrespectful behavior toward women is often quickly addressed at their company are 44% less likely to think about leaving their job.
5) Make the “Only” experience rare. Companies should take steps to reduce the number of women who are the only one in the room—and who feel isolated and under pressure as a result. In addition to increasing the representation of women, companies should be thoughtful about how they move women through their organizations. One approach is to hire and promote women in cohorts and cluster women on teams.
6) Give employees the flexibility to fit work into their lives. To increase the representation of women at all levels, companies need to find more ways to help employees balance work and family. A majority of companies offer employees some flexibility to ease work-life friction, such as the ability to work part-time or telecommute. But fewer companies address the unique challenges faced by parents. As one example, fewer than two-thirds of companies offer maternity leave beyond what’s required by law, and just over half offer fathers the same benefit. In addition, only 45% of employees say that their manager regularly helps them balance work and personal demands – and women and men feel equally unsupported.
ABOUT THE STUDY
Women in the Workplace 2018 is the largest comprehensive study of the state of women in corporate America. Since 2015, LeanIn.Org and McKinsey & Company have published this report annually to give companies and employees the information they need to advance women and improve gender diversity within their organizations. McKinsey & Company also conducted similar research in 2012. This year, 279 companies employing more than 13 million people shared their pipeline data and completed a survey of their HR practices. In addition, more than 64,000 employees were surveyed on their workplace experiences, and we interviewed women of different races and ethnicities and LGBTQ women for additional insights. Since 2015, 462 companies employing almost 20 million people have participated in the study.
An initiative of the Sheryl Sandberg & Dave Goldberg Family Foundation, LeanIn.Org works to help women achieve their ambitions and create a more equal world. LeanIn.Org offers inspiration and support through an online community, free education materials, and Lean In Circles, small groups of peers who meet regularly to learn and grow together. The Lean In community includes over two million women and men and 40,000 Lean In Circles in 169 countries. The Sheryl Sandberg & Dave Goldberg Family Foundation, which also runs OptionB.Org, is a private operating nonprofit organization under IRS section 501(c)(3).
About McKinsey & Company
McKinsey & Company is a global management consulting firm, deeply committed to helping institutions in the private, public, and social sectors achieve lasting success. For more than nine decades, the firm’s primary objective has been to serve as our clients’ most trusted external advisor. With consultants in more than one hundred offices in sixty countries, across industries and functions, McKinsey & Company brings unparalleled expertise to clients anywhere in the world, working closely with teams at all levels of an organization to shape winning strategies, mobilize for change, build capabilities, and drive successful execution.
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