The number of Americans voluntarily leaving their jobs has now exceeded pre-pandemic highs for 21 consecutive months, and a similar trend has surfaced in the UK, Australia and France. Studying this startling new reality, we have found another related and worrying trend: women leaders are switching jobs at the highest rates in years — and at higher rates than their male counterparts. McKinsey’s research reveals that for every woman at the director level who wins a promotion, two now choose to leave their companies.
This trend runs counter to the best interests of employers, whose profits and market share performance can be close to 50% higher when women are well represented at the top, according to our research.
Most Malaysian companies understand this. According to Bursa Malaysia, the country’s business leaders are more gender diverse than in other parts of Asia. For instance, women account for 28% of directors at large companies in Malaysia, a higher percentage than in Japan and Hong Kong. Women now hold 40% of the roles on senior management teams in Malaysia, compared with a 32% global average. But women leaders’ rising departure rate shows that diversity in leadership depends not just on promotion and advancement but also retention.
Women leaders still face more challenges than men
Women are ambitious; more than two-thirds of those under 30 want to be senior leaders. But they are often asked to do more work than men with similar job descriptions; 43% say they are burnt out, compared with only 31% of men, according to our new research. They are more likely to be passed over for promotions after having a child.
And as they move into leadership roles, many women find that day-to-day life becomes more difficult. They are more likely to face microaggressions that challenge their competence, such as being interrupted or receiving unsolicited advice on their appearance that men never get, such as to “smile more”.
Like men, women are also increasingly demanding careers on their own terms, especially in the wake of the pandemic, which apparently caused many people to rethink their priorities. Research proves, for example, that women leaders care more deeply about flexibility and their companies’ commitments to well-being.
In short, women are significantly more likely than men to leave their jobs today. Jacinda Ardern, New Zealand’s former prime minister, crystallised the painful reality for women leaders around the world when she announced her resignation on Jan 19, 2023, saying she no longer had “enough in the tank to do the job justice”.
GirlsThatInvest reacted succinctly on Twitter, calling the sudden resignation “a gentle reminder that no job, not even being prime minister, is worth losing all of you”.
To stay competitive, companies must rise to the challenge
Companies now face two major challenges: getting more women into leadership roles and retaining the women leaders they already have. Overcoming the Great Resignation and other powerful trends will require pushing beyond common practices to reimagine more equitable, supportive, and inclusive workplaces. Based on our analyses of best practices in human resources, diversity, equity and inclusion across industries around the world, we have identified initiatives that work:
• Giving women — and men — more options to pursue flexible and remote work. Research confirms the common-sense notion that women who work how they want to — remotely or on-site — are less likely to feel burnt out and much less likely to consider leaving. Each company is different, of course, and needs to find approaches that work for employees, customers, shareholders and so on. We have found that companies are far more likely to succeed when they communicate clear rationales for new guidelines and policies, and gather regular feedback on what is working and what needs to be improved. We’re also finding that employees place a high value on mentorship and promotions that are not predicated on where they work.
• Coaching team managers. Managers shape each employee’s experience for roughly eight hours a day, so they need the right tools and mindsets. Targeted coaching can help managers do more to support employee well-being, for example, by setting boundaries with team members and managing hybrid and remote teams.
• Tracking outcome data and maintaining accountability. Many companies have used these tools to close gaps in female leadership in recent years and should now double down. They should identify the largest gaps in promotions and retention for women, for example, monitor outcomes, and root out biases in performance management processes.
Investors, boards, and senior teams know that women are ambitious and hardworking and that they are more inclusive and empathetic leaders. But the labour market is shifting in profound ways. More than ever before, women now want to work for companies making fundamental changes to improve the employee experience. Companies that embrace this will attract and retain more women leaders, which will help improve business results and create better workplaces for everyone.
Victoria Ngow and Sharifah Syed Taha are consultants at McKinsey & Company’s Kuala Lumpur office.
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