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Women Will Play a Critical Role in the Economic Recovery
Business leaders have the opportunity to bend the arc of history toward inclusion right now. COVID-19 has exposed inequities that have either been long-buried or pushed aside. But business leaders must take a stand and modernize their human capital and business processes to ensure equity—in every single decision. Doing so will enable their companies to bounce back stronger and faster.
Women were leading a strong jobs market
We need to begin by putting the economic situation into context. Just a few months ago, as we rang in the new decade, the U.S. recorded its longest streak (112 months) of consecutive monthly job growth. This strong labor market was pulling more women into the workforce.
Between January 2017 and August 2019, the labor-force participation rate among women in their prime working years increased from 74.5% to 76.3%. By December 2019, women held 50.04% of U.S. jobs (excluding farm workers and the self-employed). And, in a historic first, we had more women with bachelor’s degrees or higher than men in the workforce: 29.5 million versus 29.3 million, respectively.
Inequity was bursting behind the scenes
The economy seemed to be working well, but inequity was thriving behind the scenes. When COVID-19 hit the economy, the cracks broke open. First, we saw widespread layoffs of wage and service workers as policy leaders began enforcing social distancing. By the week ending March 15, 25% of households making less than $50,000 annually had faced job losses or reduced hours. The layoffs disproportionately hurt women because they represent 62% of all minimum-wage and lower-wage workers in the U.S.
In fact, women suffered the majority (58.8%) of all job cuts since February. It certainly didn’t come lightly to the 71% of U.S. households with children who rely on moms for their economic well-being. The massive loss of household income that swept our nation these past few weeks uncovered more unsavory economic discrepancies.
We were reminded that our country is living with the largest wealth gap since before the Great Depression; that we have a 37-point gender wealth gap; and that in 2015, for the first time on record, middle-income families no longer made up the majority in America. Despite the 112-month streak of positive job growth we witnessed before COVID-19, we were also reminded that wages hadn’t kept pace. For instance, for every $1 increase in manufacturing wages since 1970, workers pay $2.33 for education, $1.85 for housing, and $1.42 for out-of-pocket healthcare costs—nullifying any wage growth.
Perhaps that’s why, at the time COVID-19 struck, 74% of Americans were living paycheck to paycheck.
Talent leaders have a historic opportunity to address inequities now
As COVID-19 throws HR leaders into the front lines of managing a talent crisis, the decisions they make today will “shape a corporation’s identity and tell a story that will leave traces long after COVID-19 has been quelled,” according to an article published by McKinsey & Co.
These fragile moments of uncertainty define and cement a company’s purpose, identity, and culture. Moreover, the article reports that 82% of employees believe in the importance of “corporate purpose,” but only 42% report seeing much effect of stated corporate purposes. That 40-point gap between values and action is an invitation for talent leaders to champion gender equity. And if there was ever a time to do so, it’s now.
Why now? Gender equity will play a critical role in helping companies bounce back faster from this virus-induced economic crisis. Pipeline’s original research across 4,161 companies in 29 countries shows that for every 10% increase in gender equity, there is a 1% to 2% increase in revenue. Our country will benefit from achieving gender equity too. Closing the gender equity gap would unlock $2 trillion in economic gains for the U.S. alone. And let’s not forget that women are the most educated cohort in the U.S.
Advanced technologies are key to reaching gender equity
So, in the midst of COVID-19 turmoil, how can HR leaders create gender-equitable talent management strategies that are capable of withstanding the future of work?
The solution lies with the tools of the Fourth Industrial Revolution. Leaders must deploy advanced technologies such as AI and cloud computing to catalyze gender equity in their organizations. Two pivotal reasons point to the necessity of advanced technologies.
First, there is the foundational reason why advanced technologies are needed to close the gender equity gap. A full 78% of CEOs list gender equity as one of their top priorities, yet only 22% of employees regularly see data on it shared and measured. Every organization makes three key talent decisions per year to move toward gender equity: how they pay their employees, how they evaluate their performance, and how they evaluate their potential.
Now consider this: There are 30 million employees in the Fortune 500. That’s 90 million opportunities every year to move either further from or closer to gender equity. How can leaders ensure that every one of those decisions is an equitable one? And remember, those 90 million opportunities don’t take into account the need for equitable hiring and promotion practices as well.
Tools of the Fourth Industrial Revolution can solve these complex issues by not only collecting and capitalizing on gender equity data but also by ensuring consistency across an entire company. In other words, these technologies provide businesses with the data, transparency, and accountability needed to achieve gender equity.
Second, there is a more acute, COVID-19-specific reason why we need to draw on advanced technologies to close the gender equity gap. The coronavirus is accelerating the future of work. In fact, some analysts are saying that the future of work may have already arrived. That means it’s time for HR to get comfortable with advanced people analytics platforms.
And for the 70% of leading global companies whose CEOs, before COVID-19, expressed the need for a “radical digitally-led transformation of their business model,” consider the pandemic an invitation to start such a transformation.
HR leaders are part of the solution
We are in the middle of a once-in-a-lifetime economic, social, and corporate restructuring. There will be no going back to “business as usual.” Our new normal will be inclusive at its core. The narrative of the tradeoff between people-first and business-first will disappear because greater inclusion drives better business.
If you anticipate and prepare for these massive shifts now by embracing gender equity and advanced technologies, your company can not only survive but thrive post-pandemic.
The contents in this article are being provided for educational and informational purposes only. The information and comments are not the views or opinions of Union Bank, its subsidiaries or affiliates.