The need for more women in senior management roles is clear. Companies led by women produce better financial results than companies led by men, and firms with a high proportion of women on the board enjoy stronger returns on sales and higher returns on equity than those with few women.
There are also more than enough qualified women in the US workforce today. More women graduate from colleges and universities than ever before, and women have made significant inroads into management, now filling one in every two managerial roles. The foundation for leadership is there; today, women comprise 47% of the total US labor force and, at 61% of the workforce, finance teams boast the second highest proportion of women across all functions.
Although finance departments are succeeding in hiring women for entry-level positions, they are failing to advance, retain, and recruit them into leadership roles. In fact, while women are more than 1.5 times more likely than men to work in corporate finance, men are 1.5 times more likely to lead finance departments, according to CEB data. Other industry statistics reflect this as well. Across the Fortune 500, women comprise less than 12% of CFOs.
Go Beyond the Glass Ceiling
While conventional wisdom blames the “glass ceiling” (the idea that mid-career women can see higher levels of leadership but cannot attain them) for the lack of women in leadership, women leaving the workforce actually occurs throughout the entire career ladder.
In finance functions this is often down to managers’ struggle to recruit and develop female leaders. Although the causes of this imbalance are systemic, finance teams can find targeted and specific solutions to the problem. Women leaders tend to value respect, want more comprehensive health benefits, and thrive in a friendlier work environment.
Progressive companies make a conscious effort to take these factors into consideration when recruiting, retaining, and developing women leaders, both in Finance and throughout the business.
Improve Recruitment: Take Women’s Preferences into Account
Potential candidates of both genders are attracted to similar factors, such as better work-life balance and compensation, but women also place higher emphasis on respect and health benefits than men. Finance departments should take these needs into consideration when devising recruitment strategies for women.
While companies typically focus on finding, promoting, and encouraging female leaders, the most forward-thinking firms go further. They typically do two things.
- Embed inclusion into the recruiting process: They make high-potential employee selection processes gender-blind to reduce biases in talent identification.
- Prepare top talent to become potential leaders: They pair women they think have the potential to take on a leadership role with seasoned female executives who can show them non-traditional ways to structure their careers and ascend into leadership.
Attracting talented women leaders begins at recruitment. Although many companies have taken steps to reduce bias in executive recruiting, female leaders still get fewer interviews and only 39% of women report that the recruiting process for their current job felt fair, according to CEB analysis. To mitigate this bias, some companies employ a gender-blind recruiting process.
Female emerging leaders are also 9% less likely than their male peers to feel ready to take a more senior positionin their current company, according to CEB data. To combat this, a global food company in CEB’s networks targets and prepares current high-potential female staff for advancement.
The firm first uses a leadership development program to identify high quality talent and encourage its executive recruiters to counsel program graduates and help them plan their careers. The company then pairs the recruiters and graduates to help prepare future leaders for non-traditional career paths.
Improve Retention: Understand Why Women Change Jobs
While both male and female leaders are likely to switch jobs for a significantly higher compensation package, women tend to factor in other considerations such as, comprehensive benefits, greater respect from others, and a friendlier work environment in their decision more than men. Specifically addressing these considerations is one potential way to advance and retain women in leadership roles.
It is not enough to focus retention efforts on women in leadership roles. Finance should focus specifically on women in mid to senior manager positions and make a concerted effort to advance them into leadership roles. One way of doing this is by boosting retention of potential leaders. To ease the transition back into the labor force for women who have voluntarily taken time off for family reasons, some companies create “on-ramps” to rapidly re-train women for leadership positions.
Women leaders who are satisfied with their workplace flexibility are 30% more likely to remain, according to CEB data. Companies should consider flexible work schedules as a way to encourage them to stay.
Case in Point
A professional services firm in CEB’s networks also takes a number of interesting steps to address retention issues before they arise and increase the representation of women in leadership positions. Instead of employing broad-based policies, the firm focuses on minor issues that could develop into significant problems. It does four things in particular.
- Encourage regional leaders to regularly engage with senior women to help them feel valued.
- Adopt a system of temporary rotations in family-friendly roles to ease the transition from maternity leave.
- Source and hire qualified, experienced women to improve the visibility of female role models.
- Engage female associates in career discussions to fill the growing need for career planning.
The company starts its interventions at the beginning of women’s careers. It continues the programs throughout women’s tenure and strives to foster open communication about perceived taboos such as family planning and taking time off.
The company’s experience demonstrates the importance of targeting interventions to women at all rungs of the career ladder. This is especially important as women rise to “key second” roles, where the number of women nearly equals the number of men.
It’s not only the ‘glass ceiling’ to blame; women leave the workforce at all rungs of the career ladder. Companies that change their recruitment and retention tactics will see a big boost to their performance.