The Great Resignation Update

The latest McKinsey Women report shows what the workplace is really like for women

By Marie-Claire Chappet

7 February 2023

cKinsey’s annual report on Women in the Workplace reveals that 10.5 per cent of women leaders are leaving the workforce, up by over 2.5 per cent since 2020. A reflection on female ambition? Hardly. Instead, the report points to the systemic failure of work culture to nurture, support and, crucially, retain, female talent.

These alarming new findings, of course, add to an existing dearth of female leadership. In America, only one in four C-suite leaders is a woman, and only one in 20 is a woman of colour. This echoes the UK, where recent reports show that just seven per cent of CEOs are women and 50 per cent of FTSE All-Share ex350 have all-male executive leadership teams. These statistics are compounded by the state of the pipeline for women in the workplace. The absence of women in middle management – an issue which, for the eighth consecutive year, has worsened in the States – means that for every 100 men promoted from entry level to manager positions, only 87 women are promoted, and only 82 women of colour. There is not only, therefore, an exodus of women at the top, but precious few women to replace them. We are left with a landscape whereby, for every woman who is promoted to leadership, two female leaders choose to leave. The statistics are hardly better in the UK, where 2021 reports of the FTSE 100, revealed two-thirds of new appointments went to men and, in the FTSE 250, only 38 per cent of new appointments were made to women.

Workplaces need to shape up to address this rapidly expanding drain of female talent at the top. This is particularly important for the progression of women. Emma Sinclair MBE, tech entrepreneur and CEO of Enterprise Alumni, finds the report distressing, as she firmly believes the power of women leaders cannot be understated. “A female CEO is not typically what we see and gender balance in investors is never the case at scale elsewhere,” she says of her company. “But that is why we attract female leaders and talent. I still interview a reasonable amount of people joining our business, I chair our women’s group and I run our Rising Stars programme for emerging talent. I know from experience that when I engage with women already in or thinking of joining our business, they have confidence that this is a company where women won’t experience the same challenges they do elsewhere in terms of systematic sexism.”

Indeed, the McKinsey report found that the age old problem of sexism in the workplace has yet to abate. The scalding statistics reveal the ongoing prevalence of microaggressions, based on gender or race discrimination and that comments along these lines, made by managers or colleagues,are seen as “headwinds” preventing career progression. The report shows women are twice as likely as their male counterparts to be mistaken for someone junior and twice as likely to report that their gender has played a role in them being passed over for a raise or promotion. “Women are actively seeking out places that don’t tolerate that and demonstrate commitment to diversity and equality with actions as well as words,” says Sinclair. “That commitment needs to be profound and visibly impactful and I think women not finding that where they work want to give their time and energy elsewhere and are moving on.”

This is evidently not women quitting on ambitious work – more than two thirds of young women under 30 want to be senior leaders – but company culture quitting on them. Because if workplaces are bleeding female talent for reasons that have long existed, it is not just a question of why, it is why now?

“Women leaders are leaving their companies at the highest rate in years - this ‘great breakup’ is a reflection of their frustration with unequal opportunity to advance, lack of recognition for leadership contributions, and a desire to redefine work models to incorporate flexibility. To attract and retain diverse talent, companies need to fix the structural bias that keeps women from advancing at the same rates as men, starting at the very first step up to manager where the broken rung creates the greatest imbalance between men’s and women’s advancement,” Alexis Krivkovich, senior partner, McKinsey & Co, tells The Stack World.

Micro-aggressions are not new, but women leaving leadership positions is. The fact is, the working landscape changed irreparably over the pandemic, and forced a reckoning we are still wrestling with. McKinsey’s report shows that today’s female leaders and the next generation are increasingly aligned in expecting more from work, with more than 30 per cent of women leaders and 40 per cent of women under 30 citing a lack of commitment to diversity and inclusion as important to them, and more than 60 per cent of women leaders and nearly 80 per cent of women under 30 citing flexibility as another. Flexibility was a core issue, with 81 per cent of women saying they are happy with their job, and 64 per cent saying they would be unlikely to leave in the next year, when they are allowed to work the way they want to and 20 per cent of women saying a lack of it was a reason they left a job in the past two years.

“The pandemic really emphasised that people were coming back to the office, saying, ‘but it’s not going to be like it was’. They have really different expectations now,” say's Gabriella Braun, the director of consultancy firm Working Well, and author of the book All That We Are: Uncovering the Hidden Truths Behind Our Behaviour at Work (Little Brown, £9.99). “Ultimately they want to be seen as people in their job and people who also have lives. Their employers need to think about them as a whole being.”

A workplace commitment to wellbeing was named by well over half of both women leaders and women under 30 as a factor that has become increasingly important to them over the past two years. Braun says she would like to see, and believes most women would, a company culture that actually tackles the causes of mental health problems in the workplace, from overwork and burnout to overbearing managers. “You need preventative care as well as support if you are struggling,” she says. “It’s not just yoga at lunchtime anymore.”

‘The pandemic and its so-called “working revolution” has made women question the reality of working’

Krivkovich adds, “Leaders who create thriving work environments through sponsorship, workload support and inclusion, need to be appropriately rewarded for their leadership – 75 per cent of companies say these actions matter, but only 25 per cent formally recognise them, which is a problem when women leaders disproportionately do this work. Women are increasingly voting with their feet – they are more than one and a half 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 and young women (under 30) care about this even more.”

Of course, so much of what is experienced by women in the workplace is often filtered through managers. “A lack of tailored support when it comes to women’s progression at work is leading to decreasing job satisfaction and feelings of burnout,” believes the AllBright’s co-founder Anna Jones, upon reading the McKinsey report, which shows 22 per cent of women have quit jobs because of a void of managerial support. This is not just causing an exodus, but forcing women to step into caring roles they are then unrecognised for. “When we talk to our AllBright community about the challenges they face at work, many see themselves as ‘fixers’ who want to solve many of the inequality issues they are seeing,” says Jones. “This can often feel like another whole job.” Of course, there is another, more pressing reason many women are weighing up the pros and cons of their workplace and finding it wanting. If they are taking on unrecognised, unpaid labour at work, they are already doing so at home and are disproportionately falling out of the workforce simply for being parents, something Joeli Brearley, CEO and founder of Pregnant Then Screwed is painfully aware of. “We have the second most expensive childcare in the developed world and our research with over 20,000 mothers found that almost half of them were considering leaving their job due to childcare costs,” she says. “Women can’t pay to work, it doesn’t make sense.”

She notes that, among the micro aggressions cited in the report, there was the looming spectre of pregnancy discrimination (women were twice as likely as men to report being a parent playing a role in being denied a promotion). “In the UK, we see that 77 per cent of mothers experience some form of discrimination, and they face a pay penalty of 45 per cent lower earnings in the six years after giving birth,” says Brearly. “Among many other things, workplaces need to get their act together and start implementing flexible working practices or you are forcing parents to compromise and to pull strings to make things work. It’s not a humane way of operating and it’s keeping talented women out of the workplace as a result.” It is no wonder the McKinsey report made ‘back up childcare services’ and extensive parental leave packages some of their key recommendations.

The pandemic, and its so-called ‘working revolution’ has no doubt proved a catalyst for women to ponder the reality of working in a landscape which still isn’t remedying long standing systemic issues. The ‘great resignation,’ or what McKinsey calls ‘the great breakup’ is a predictable but exhausted protest vote from women who are sick of waiting for work to adapt to their needs. Though these moves may be curtailed by the unstable economic climate, Anna Jones hopes this can be counteracted by companies seeing the bigger picture. “Ensuring a healthy pipeline of motivated female talent is the only way companies will thrive long term,” she says. “Businesses with more women on their leadership teams are more profitable, more socially responsible and provide higher quality customer experiences. This in turn makes them more attractive employers and more likely therefore to thrive even during economic downturns.”

Indeed, the more positive takeaway from this report is that women are taking action, and workplaces will have to listen. “When businesses do really invest in women’s upskilling and community-building, and try to understand the unique challenges women often face they soon get a reputation for this, word spreads and they can become ‘talent magnets’,” says Jones. Signs point to workplaces in the UK taking this advice. Last year, flexible working became the most common workplace practice, with 4.3 million employees having a contract that allowed it. This is no doubt a response to surveys and reports from 2021, which revealed half of employees would quit without hybrid working, which we can only hope will serve a similar purpose to trials of four-day weeks and the most robust calls we’ve seen yet on the need for affordable childcare in the UK. Reports such as McKinsey’s, where damning statistics are paired with recommendations for retaining female talent, can only further act as a warning shot for workplaces to shape up. As Braun notes: “Women are finally saying no, enough."

The Short Stack

The latest McKinsey Women in the Workplace report shows that women's dissatisfaction in the workplace is reaching untenable levels.

By Marie-Claire Chappet

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