Why There Are Still Few Women Leaders in Tech

13 Jan Why There Are Still Few Women Leaders in Tech

For many companies, celebrating equality, talent and diversity has become a CEO-level issue and one of the core focus areas. Industry leaders emphasize equal pay opportunities and promoting women to higher management levels with bigger responsibilities. Marc Benioff has become a role model by closing the pay gap and introducing “Equality” as a business value. Together with the UN, CEOs Paul Polman, Jean-Pascal Tricoire, Vittorio Colao, Bill McDermott have become impact champions for diversity and equality in the workplace globally. Fast changing filed, like technology, attract dreamers who want to have an impact, innovate, and contribute.

However, despite the increased media focus and the fact that last few decades demonstrated significant strides in employment and gender equality, the progress of women in the workplace surprisingly slowed down. In 1979, women were paid 63 cents for every dollar men earned. In 2012, over 30 years later, that number rose to 81 cents per dollar. In the 1980s and 1990s, women made substantial gains of 8 to 10 percentage points in term of closing the wage gap, but between 2003 and 2013, the wage gap has declined by 1 point, according to a study by University of Massachusetts.

With this rate of progress, it will take until 2133 to close the gender gap, says the World Economic Forum.

Other statistics corroborate this trend. In 1990, the US had a 77% women in the workforce participation rate and was only outperformed by 5 other countries; Denmark, Canada, Finland, Norway and Sweden. In 2014, women participation dropped to 73.8%, while several other European nations thrived at rates exceeding 85%, according to the OECD.

This decrease in women participation in the workforce may come at a significant price. More women need to be encouraged to seek and retain leadership roles within companies, as the presence of women in teams and in executive roles yields high returns for companies. For example, a DDI consulting firm study found that top 20% of best performing companies had 27% of women in key leadership roles across the entire organizational structure. The bottom 20% had 19% in leadership roles.

The role of women in technology has significantly stalled and, in some cases, even declined. In 2008, women on average held 25% of IT-related jobs in the US, a drop from the 36% occupied in 1991. Also, women between 25 and 34 are reporting increasing dissatisfaction with their tech careers. 56% leave their jobs at the highlight of their career, which is twice the quit rate for men. According to a Reuters study, 30% of 450 technology executives stated that their groups had no women in leadership positions. Women are becoming increasingly invisible in the thriving technology and computing sector, one of the top U.S industries and one of the fastest-growing professional occupations among U.S workers with an estimated 1.8 million jobs in computing by 2018, according to the U.S Department of Labor.

While it can be argued that academic and professional interest in technology is waning among all genders, the gap is more pronounced in women. In 2008, for example, the percentage of diplomas in technology was 57 percent of all bachelor’s degrees in computer and information science, 18 percent of these were awarded to women, a decrease from the mid-1980s when the number of technology degrees awarded to women was 37 percent. Employment situation is not significantly better. In 2008, 57 percent of all jobs were held by women, only 25 percent of which were IT-related jobs, a drop from 36 percent in 1991.

The statistics do not improve with major technology companies, which also showcase a relatively low number of women participation. Apple has 20% of women employees in technology; Google has 17% of women in its workforce, while Microsoft, Facebook and Twitter have 16.6%, 15% and 10% respectively.

The challenge is how to encourage women to participate in the growing field of technology and apply for higher-level managerial roles.

The Anita Borg Institute found that Fortune 500 companies who have at least 3 women directors, have a higher return on sales of at least 42%.

Another detailed 2014 report by Credit Suisse found companies with more women on the board of directors had higher returns on equity, better stock performance, and higher payouts of dividends. Researchers examined 28,000 executives at 3,000 companies in 40 countries, known as the “Gender 3000 database”. They find that companies with 50% or more of the key “front office” positions, such as CEO, operations chiefs, finance and strategy heads were held by women had an average annual returns of 28.7 percent, compared to 19.1 percent in all companies. The rate was 22.8 % for those companies, where a quarter of the top jobs were held by women, and 25.6 % where at least one third of the leadership roles were held by women.

A study conducted by NCWIT on women in technology found that in successful start-ups, there were twice as many women in upper management roles than in unsuccessful start-ups. The World Bank states that when women are excluded from management positions, managers tend to be less skilled, which leads to a decrease in innovation and the adoption of technology.

Are women better leaders?

Not only do women leaders bring about strong financial returns for companies, they are also often seen as better leaders. According to data released by consultants Zenger and Folkman which surveyed 7,300 leaders in domestic and international public and private sectors, women were seen as better leaders in 12 out of 16 different competencies proven to demonstrate leadership effectiveness, such as taking initiative, developing others, driving for results and self-development. Overall, 55.1% of women were seen as effective compared to 51. 3% for men. The gap, however, widened significantly with higher the management roles.

Indeed, while women represent over 50% of total new hires in the US, most of them stay at current levels and the reasons for that include “lack of role models, exclusion from the informal networks, not having a sponsor in upper management to create opportunities”, as McKinsey suggests.

One way to increase diversity and leadership of women in the workplace may be to promote more women to leadership positions. Research by public relations firm Weber Shandwick shows that women are more likely to become CEOs, if their current CEO is a woman. 23% of women surveyed wanted to be CEO, but that number increased to 29% if their current leader was a female. Among the respondents, 69% stated that it was important to increase the pool of women CEOs with 84% of females holding this conviction and 60% of males. 50% of male and 58% of female executives cited that it was important to have more female role models and mentors.

Having more women on the board of directors has significant gains for companies. Countries, like Norway is a commonly cited example where the government imposed quotas in 2003. Since then, the number of female representation increased from 7% to 41%.

The state of California is leading the way with the 2020 campaign, actively encourage companies to increase the presence of women in the board rooms by the order of 20% by 2020. Managers do not need to wait for state or federal laws or initiatives to increase women leaders in their firms and promote qualified women to senior roles.

Path forward: address subconscious and cultural biases

According to NCWIT, 74% of women employees in technology state loving their work, but they are leaving their jobs at a high rate. In fact, about 56% of women in technology leave their employers mid-career, which is twice the quit rate for men. Companies incur the cost of these resignations, as these women continue to use their technical skills with other companies or through self-employment.

Kieran Snyder, co-founder and CEO of Textio wanted to understand the reasons behind women leaving their technology jobs and conducted a study among 716 women who had worked at 654 companies in 43 states who quit after an average of seven years of tenure. The vast majority of respondents cited culture as a major reason to leave their positions.

While unconscious bias or discrimination exists in all fields of work, it may be more visible in STEM industries. This can negatively impact motivation and productivity and lead women to eventually leave their companies.

NCWIT cites different ways unconscious bias may come into play for women in technology. Subtle inequities such as gestures, words, looks which may make a female employee feel devalued; stereotype threat, when comments are made about an employee’s gender and their job performance can reduce feelings of trust; color or gender-blindness during which managers in an effort to establish an equal work environment fail to recognize real differences between genders, which make employees feel misunderstood and discouraged; and finally, lack of role models or mentors and satisfactory supervisor-employee relationships, which may make female employees feel isolated and disempowered.

Women who are not satisfied with their jobs are 22 times more likely to leave, and there are many ways managers can help with female employee retention. Managers can learn to tackle potential biases and obstacles by recognizing them and addressing them head-on with their employees. They can encourage an open atmosphere where issues can be communicated and where an optimal environment of respect is nurtured. Companies can choose to support global campaigns, such as the UN HeforShe campaign.

Although, the amount of women in leadership positions is still low, many companies have recognized the importance of having women in senior management roles and in board rooms. Credit Suisse says that 12.7 % of boards on average were occupied by women in 2013, compared to 9.6% in 2010. It is important for every manager is to identify what may drive resentment in their team members and address these specific issues. Executives can help retain female employees by adopting strategies that address their unique concerns and fostering an environment of equality, open communication and respect conducive to top performance and innovation for all employees.

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