Why are Women Leaders Quitting Companies More than Ever

According to the latest report, Women in the Workplace, produced by management consulting firm McKinsey and Lean In, about 10.5% of female leaders left their companies in 2021, as opposed to 9% of their male peers. McKinsey began collecting the data in 2017, and this was the highest recorded rate of voluntary departures.

This unprecedented number of departures is a result of employees reassessing and readjusting their careers and professional preferences after COVID-19 changed the workplace scenario, with more and more women prioritizing flexibility and well-being. Women in business leadership are already underrepresented, and now this withdrawal bodes ill for both companies and gender parity in business leadership. Even though more than half of the workforce in the United States comprises women, only 8.2% of leadership positions at Fortune 500 companies are held by them. Women also make up only 25% of the C-suite positions in US companies. Now comes the big jolt to the women in leadership, which the experts are terming the ‘Great Break-up”.

The latest Women in the Workplace report is derived from data from more than 300 organizations and their combined 12 million employees. The report revealed that for every woman who got promoted to a director level, two women directors left their companies in 2021. Researchers say that there are multiple factors at work behind this withdrawal, including the deteriorating work culture, microaggressions, burnout, extra work, and lack of recognition.

Burnout is a predominant factor that gave impetus to the “Great Break-up” during and after the pandemic. Nearly 43% of women leaders said they are burned out, compared to only 31% of men. Women are more likely to be responsible for housework and caregiving and maintaining a work-life balance often becomes very hard. The situation was especially grim during COVID-19 when children were taking classes online at home. According to new research by Gallup, working women in the United States are one of the most stressed employees globally and continue to experience exhaustion and burnout at higher rates than men.

After two-and-a-half years into the pandemic, new research conducted by the National Women’s Law Center revealed that women had recouped jobs that were lost following February 2020. However, the “Great Break-up” continues with women still leaving the US companies in droves.

While women aspire to occupy senior management positions, much like their male colleagues, it was found that they are more likely to experience microaggressions at work, which often undermine their authority and discourage them from advancing within a company.

Despite modest gains of women representation in leadership, only one (1) in four (4) C-Suite leaders is a woman. Further, a lesser number of women are promoted to managerial roles. For every hundred men who are promoted to a manager position from an entry-level, only 82 women of color and 87 women, in general, are promoted.

Moreover, women leaders are twice as likely to be mistaken for someone junior to the position they hold, and a staggering 37% of women leaders lose credit for their ideas that a co-worker receives, compared to only 27% of men in leadership. Lean In and McKinsey also found that women are not given due credit for their work in performance reviews, which is another trend pushing them to leave their jobs.

The report revealed that women value those workplaces that prioritize career advancement, employee well-being, and flexibility, as well as diversity, equity, and inclusion. This is another factor due to which they are leaving those companies where these needs are not met in unprecedented numbers. Due to these reasons, businesses are at a massive risk of losing more and more young women as these issues are considered more important by women under 30.

Losing women leaders can be extremely detrimental to US businesses. A separate McKinsey report in 2020 found that companies where women made up 30% of the executive teams, were 48% more effective and likely to outperform the teams with fewer or no women. The withdrawal of female leaders from businesses can also hurt those young employees who look up to more experienced women leaders for guidance and mentorship. About 58% of women under 30 say that advancement in their career is more important to them, compared to only 31% of women leaders.

Companies need to reevaluate the importance of women’s leadership and offer more flexible and remote work options for women. Just over 10% of women say that they are comfortable working on-site, and for the remaining, remote work is one of the top reasons for staying or joining a company. Flexibility can also help improve gender parity. Flexibility helps women, especially women of color and differently-abled, experience fewer microaggressions and increased levels of psychological safety. It will also help the companies get better collaboration, a diverse problem-solving attitude, and more, driving them into their desired future.