The Promotion Gap for Women in 2020: Yes, It Still Exists.
By Scott Wallask, longtime content writer; seeking stories flowing from data with a dash of skepticism; Northeastern grad.
“Taking your seat at the table doesn’t work so well, I thought, when no one wants you there.”
These words from investor and business executive Ellen Pao, who unsuccessfully sued former employer Kleiner Perkins for gender discrimination, no doubt resonates with many women struggling for recognition in corporate America.
[This data was pulled in January 2020. COVID-19 has created drastic changes in employment, especially for women. To understand how COVID-19 impacts women in industries ranging from retail to healthcare check out Women on the frontlines of the pandemic.]
Although some companies do well elevating women to leadership positions — particularly in certain industries or at businesses of a certain size — new data from ZoomInfo suggest that the rate at which females are promoted to management and executive levels still pales in comparison to their male counterparts.
Outside factors are helping women succeed more, such as California’s new law that requires at least one woman on the board of each public company headquartered in the state.
Men Disproportionately Promoted Over Women, With a Few Caveats
Across the United States, women comprise 47% of the workforce, as noted in U.S. labor statistics. While women make up 40% of managers at companies, only 20% reach the top spot of CEO, according to ZoomInfo’s analysis of 60 million professionals in its database.
Those figures indicate a lower promotion rate for women compared to their male colleagues: For every three men promoted to managers, only two women get similar promotions, while only one woman gets the nod for CEO for every four men.
“Between the genders, males are more likely to get a promotion compared with females — 9.3% percent compared with 8.4% percent, respectively,” payroll software provider ADP noted in a 2019 workforce study.
Promotion of Women Varies Drastically by Industry
The promotion rate of women varies widely by industry. For example, in nonprofits & organizations women make up 56% of the workforce and 41% of CEO’s are female while in the insurance industry women make up 55% of the workforce and only 15% of CEO’s are female.
Looking at industries that employ the most women as analyzed from ZoomInfo’s database, the following industries offer the strongest options for women to be promoted to management and CEO:
- Organizations (including nonprofits and associations)
- Schools and colleges
- Hospitals
- Government agencies
It’s not surprising to see the education and healthcare industries show up on this list, as both are dominated by women to begin with. Beyond that fact, however, all four of these industries seem to have well-rooted systems of moving women up to management and then up to CEO. In other words, the pipeline for women to promote is healthier.
A look at the gender breakdown in the nonprofit sector in Figure 3 shows a sense of parity between male and female managers and CEOs, at least compared to other industries.
On the other end, the finance industry, which Pao was employed in while at Kleiner Perkins, doesn’t appear to do as well with female promotions. Although she lost her lawsuit against the firm, her case raised enough awareness to where similar lawsuits against gender inequality were attributed to a “Pao effect.”
During her time at Kleiner Perkins, “The only path I saw to success was to work twice as hard as the men and to do the best job I could,” Pao wrote in her book, “Reset: My Fight for Inclusion and Lasting Change.” Unfortunately, working twice as hard was not enough to overcome the promotion gap.
Leaving is Often the Only Option for Women
Other women in traditionally male-dominated industries have also felt the need to push harder than their counterparts for promotions.
Jacqueline Hinman, former CEO at CH2M Hill — a construction and engineering firm that Jacobs Engineering Group acquired in 2017 for $3.27 billion — noted an incident early in her career in the 1980s when she sat down for a review at another construction company. On her paper assessment, she noted one of her goals was to be a partner at the office.
One of her goals was to be a partner at the office. “[Her] manager, who she believes was well-intentioned, said there was no doubt she had the prowess. But this office was never going to have a female partner in her lifetime.”
“[Her] manager, who she believes was well-intentioned, said there was no doubt she had the prowess. But this office was never going to have a female partner in her lifetime,” wrote Briefings Magazine, a publication of consulting firm Korn Ferry. “So he passed a bottle of correction fluid across the desk and told the eager employee to write something that didn’t make her look naive.”
Hinman started looking for a new job the next day, according to Briefings Magazine. After an initial stint at CH2M, she ended up at Tyco’s Earth Tech division as senior vice president of global facilities before returning to CH2M and eventually ascending to CEO in 2013. She was one of only a few women to run a major engineering firm in the U.S., the Denver Post reported at the time. With only 16% of women reaching C-level positions in the construction industry, Jacqueline’s story is not just unique, it’s practically unheard of.
She learned early on to challenge people — men or otherwise — and pushed for tough assignments. “I had to raise my hand and say I wanted to have all of these challenges and experiences. So I had to ask for it,” Hinman told the Post.
While industry is by no means the only factor contributing to the likeliness of being promoted, it’s evident that certain industry dynamics (such as the number of employees and the revenue of a business) play a major role in women’s ability to rise to the c-suite.
More Women CEOs at Companies With Fewer Employees
Does a company’s size, either by revenue or workforce, influence how women are promoted? Yes, according to ZoomInfo’s data.
First, let’s look at the number of employees and whether it affects career paths for women. There’s an interesting dichotomy to note. The amount of women managers starts lower at smaller companies and then increases slightly and levels off as companies hire more workers.
In contrast, the number of women CEOs goes down as firms bring in more talent; in fact, based on company size, women are most likely to be CEOs at businesses with less than 100 workers.
But then something unexpected happens at large enterprises with 10,000 or more employees: The amount of women CEOs goes up after dropping consistently from very small companies.
Why does this turnaround happen? One theory is that the largest companies may have more CEO slots to fill — for example, an international company with chief executives for each region. It’s also possible that enterprises are under more pressure socially to promote women.
Bump in Female Executives When Firms Earn $5 Billion or More
Looking next at female promotions by company earnings, the overall number of women in companies hovers from 41% to 43% regardless of revenue. The percent of women managers also stays relatively consistent, although there is a slight bump after companies earn more than $500 million annually.
Much like with headcounts, women CEOs are more plentiful at smaller companies that pull in less than $50 million. The amount of female executives decreases until an uptick at companies that have $5 billion or more in revenue.
The overall conclusion is counterintuitive when it comes to company size by headcount or revenue. Women seem more likely to get promoted to managers as firms grow, but females are more likely to become CEOs at smaller companies.
Departments with More Women Fare Better
Stepping out of the C-suite, a department-by-department breakdown of managers shows that in many cases, a high percentage of overall women in a department leads to a similar percentage of female managers.
For example, in human resources departments, 66% of the overall roster is female, and 64% of all managers there are women, ZoomInfo’s data indicates. Likewise, in marketing, 61% of the workforce is female, and 57% of the managers are women.
Operations and finance teams aren’t as balanced, however. In operations departments, even though 48% of the workers are women, only 35% of them become managers.
The only department that saw more women managers as a percentage than the overall female roster was engineering, with 23% female managers versus 22% women workers overall. Those numbers may just be reflective of the lower number of women employed in engineering departments.
Outlook for Women in Manager and CEO Roles
Despite many of the numbers discussed earlier, there are positive changes for women seeking promotions to either management or executives.
Back in 2007, ZoomInfo released data about women CEOs, and compared to current numbers, many industries are improving, even if the numbers are still lower than ideal.
For example, the finance industry had only had women in one out of 10 CEO roles in 2007, so it has increased that number by 40% in the last 13 years.
Further, the construction industry saw an impressive jump of 71% over that same period for women chief executives.
California enacted a law requiring all publicly held corporate boards headquartered in the state to have at least one female board member by December 31, 2019.
Meanwhile, California enacted a law requiring all publicly held corporate boards headquartered in the state to have at least one female board member by December 31, 2019. Options included either filling an open board seat or adding a new seat.
Pao — who now runs an investment company aimed at increasing diversity in the tech industry — said the new law should help address the problem of homogenous boards, particularly in Silicon Valley.
“When you see the state of California mandating diversity on boards, it’s because there’s been a failure,” Pao told The Muse. “There’s all this information out there, we know there are financial and long-term benefits to diversity on boards and executive teams — and yet some people still can’t make it happen.”
Do you have a (data-driven) story?
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