The power of women in the workforce

Women in America represent an underutilized economic resource that can increase organizational effectiveness. Women represent a market demographic with huge, dominant buying capacity.  Despite the fact that more women than men complete higher education, they are vastly underrepresented on boards and in senior leadership positions. Research shows that increasing representation could bring substantial value to an organization. Women in the U.S. control 73% of all household spending and $12 trillion of the $18 trillion in global consumer spending, as per a Boston Consulting Group study.  Catalyst, the leading nonprofit organization with a mission to expand opportunities for women and business, found that women in the U.S. in 2008-2009 earned 57% of all bachelor’s degrees, 60% of all master’s degrees, 52% of all doctoral degrees.

Women are underrepresented in the U.S. workforce, according to research by McKinsey and Co.  Women account for 53% of the college educated U.S. population, however, only 50% of college educated workers are women. About 76% of American women aged 25-54 are in the labor force.  An overall U.S. participation rate of 84% would add 5.1 million women to the workforce, suggesting GDP growth of 3-4%. Increasing women’s participation in the workforce could improve corporate performance and improve organizational effectiveness.

Having three or more women directors on corporate boards is correlated with materially higher returns on sales, invested capital and equity.  In 2011, Catalyst produced a study of Fortune 500 companies showing that those companies with sustained high representation of women board directors (three or more in at least four of the five years being examined) substantially outperformed companies with sustained low representation (none in at least four of the five years examined). Yet for Fortune 500 companies, only about 18 % of board members are female and 49% of Fortune 1000 companies have one or no women on their top teams.

Correlation is not causation, however, it makes sense that a positive result occurs when women are in a position to influence and direct business organizations. Research has identified a number of effective steps to support gender diversity.  CEOs’ and senior executives’ desire for gender diversity must be visible. Moreover, the human resource department and leaders throughout the organization must be fully engaged. When gender diversity is an organizational value, it will become instilled in the culture over time. Creating an environment in which women can contribute and succeed is the charge of management at all levels.  A culture that embraces gender diversity requires a multi-year approach addressing areas of talent acquisition and development, succession planning and preparing for a how women can effectively advance in the organization.

Research indicates a correlation between representation of women on boards and representation on top-executive teams.  Boards stimulate change. Leaders can encourage female and male board members to establish relationships with future women leaders and to serve as role models or mentors. Women directors can accelerate progress on gender diversity, however it is incumbent on leaders at all levels of the organization to do so.  When leaders take action to increase gender diversity, business, shareholders, customers and society benefits.


Stuart R. Levine

Stuart R. Levine

Founded in 1996, Stuart Levine & Associates LLC is an international strategic planning and leadership development company with focus on adding member value by strengthening corporate culture. SL&A ... Web: Details