The Cost Of Having Women Drop Out Of IT

The performance of IT departments will suffer without women
The performance of IT departments will suffer without women
Image Credit: Nenad Stojkovic

As the person with the CIO job, you understand that having a diverse workforce is key to having an IT department that can solve today’s complex problems. Diversity is something that we’ve always worked at and in the past few years it has only increased in importance. The importance of information technology requires that we have a diverse workforce. However, with the arrival of the Covid-19 pandemic and the upheaval that has swept through every company, CIOs have a new problem that they have to deal with: they are losing their female employees.

Where Are The Women Going?

What CIOs are starting to realize is that with the arrival of the pandemic four times as many women as men have dropped out of the labor force. CIOs are now concerned that the coronavirus is undermining workplace equity. The latest research indicates that something else may also suffer damage over time: corporate effectiveness. A statistical model gauges a company’s “effectiveness” – doing the right things well. In the study 820 large, publicly traded companies were evaluated across five categories: customer satisfaction, employee engagement and development, social responsibility, innovation and financial strength. In order to be ranked, a company had to have at least two valid indicators for each of the five areas. From the starting set, 640 companies met this condition.

In the study corporations are compared in each of the five categories, as well as in their overall effectiveness. The 640 companies were grouped into quartiles, ranging from the highest-scoring firms to the lowest-scoring. Using gender-diversity data the groups were then examined the percentage of C-suite executives and members of senior management who are women at the companies in each quartile to see what, if any, pattern emerged.

In some bad news for the person with the CIO job, the results couldn’t be more clear. On average, women make up 20.2% of top executives among companies that scored in the highest quartile in terms of the company’s total effectiveness. For companies in the second quartile, that number slips to 17.5%. For those in the third quartile, it’s lower still, at 15.4%. And at the companies that are least effective overall, an average of just 12% of executives are female.

As Covid-19 continues to take a toll on the company’s physical and economic health, women have found themselves bearing much of the hardship. They have lost more jobs than men, and they’ve also had to shoulder an inordinate share of housework and family caregiving responsibilities. More than one in four women now say they may quit or scale back their jobs. This is a trend that threatens the gender balance at all kinds of companies. Before the pandemic the representation of women in corporate America was slowly trending in the right direction. However, if women are compelled to leave the workforce, we’ll end up with far fewer women in leadership – and far fewer women on track to be future leaders. CIOs need to realize that all the progress we’ve seen over the past five years could be erased.

How To Solve The Missing Women Problem

The loss of women in the workplace could have implications for how well companies perform across a host of functions. The study showed that companies in the highest quartile in each of the five categories have a far greater concentration of top women executives than do those businesses in the lowest quartile. The biggest spread was in social responsibility. At firms that score in the highest quartile, an average of 22% of top executives are women, compared with 10.9% for companies in the bottom quartile.

There is no way for CIOs to know for sure why companies with more women at the top fare so well in every area of the ranking. However, CIOs need to understand the benefits to business of diversity. For example, researchers have shown that innovation increases as the proportion of female managers rises. Other researchers have reported that companies characterized by gender diverse leadership teams are more effective than other firms at pursuing environmentally friendly strategies.

A study last year concluded that firms with female CEOs and CFOs produce superior stock price performance as compared with the market average. All of this suggests that CIOs would be wise to reach out to the women who work for them and find more ways to be supportive during this difficult time. Otherwise, the leaks in the talent pipeline may flood into every dimension of corporate performance.

What All Of This Means For You

One of the most important lessons that has been drummed into the heads of CIOs over the past few years is that creating and maintain a diverse workforce is critical to the success of their organization. However, with the arrival of the Covid-19 pandemic and the impact that it has had on everyone who works for the company, CIOs are starting to see more and more of their women employees leave. This starts to produce a problem in that their workforce is in the process of becoming less and less diverse. How big of a problem is this for CIOs?

It turns out that four times as many women are dropping out of the workforce than men. Studies are starting to show that this loss may have an impact on corporate effectiveness. The study showed that at firms where women made up the largest number of top executives, the companies were the most effective. Fewer women meant less effectiveness. The pandemic is causing women to have to take on more responsibilities and they are scaling back their jobs. Fewer women in the workplace means that there will be fewer women in leadership roles. A company’s social responsibility is one area that could take the biggest hit from the loss of women. Studies have shown that innovation rises as the number of women mangers rises. CIOs need to take steps to stem this loss or end up risking a loss of performance.

The loss of women in the workplace is understandable – the pandemic has affected everyone differently. However, CIOs need to understand that if they loss too many of their female workers, their department will suffer for it. They need to step on and take action to limit the number of women who leave the firm. If CIOs can find ways to do this, then they will have prevented a big problem before it became too big.

– Dr. Jim Anderson Blue Elephant Consulting –
Your Source For Real World IT Department Leadership Skills™

Question For You: How can CIOs get women who have left the workforce to come back?

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What We’ll Be Talking About Next Time

Guess what: CIOs are humans also. Just like everyone else we have grown tired of living in a world that is trying to deal with the Covid-19 pandemic. We miss the way that the world used to be: the routines, the people, the interactions, the dealing the importance of information technology. It’s entirely possible that as the months have dragged on you have become worn down. The good news is that you are not alone – everyone else is feeling the same way. What we all need are ways to get our second wind. How can we get the energy that we’re going to need in order to get through this thing?