INDUSTRY UPDATE: Female Executives – March 2022
We are often asked questions such as have women made real progress in infiltrating the executive ranks. And what is the prognosis going forward? We thought therefore that it makes sense to see where the female executive ranks stand at the moment so we can take stock in the future.
The Economist recently published their Glass Ceiling Index. (See Source). And it provides an excellent gauge for how various countries have developed. Especially with respect to female participation. These are specifically in managerial positions, company boards, seats in parliament, etc. And we encourage readers to look into this broader view as their interests may dictate. According to this source, it seems that women are making some progress. But, that progress is uneven at best.
So our focus here will be on executive populations in our target geography. (US, EU, UK and Middle East (ME). These are a snapshot with some reflection on growth and participation rates. (See the Editor’s Note for further definition.)
At a very high level, and from a target population of 7.86 million executives, only 24% are female. This breaks down to about 4.7 million in the US. Of these, 27% are female. And 3.2 million in the EU, UK, and ME. Of these, 21% are female. Meanwhile, the overall executive population grew by just 1% in the past year. Because almost 248,000 changed jobs, this resulted in a churn of 3.2%. Including the background growth, therefore, there were a total of about 320,000 opportunities for executives to obtain a new role in the past year.
The left-hand portions of Chart 1 provide an overview of the top 50 titles within this population. It also reveals the percentage of each title that is held by females. The right-hand side re-sorts the same data. Chart 1 shows in descending order titles most frequently held by women. But it is perhaps not surprising. Human Resources and Marketing figure highly on this ranking. However, the question remains. So why are women less frequent in some of the fastest-growing executive roles. And what can women do about that?
Per Chart 2, it contains Construction and Financial Services. And adding in Information Technology & Services and Real Estate, these are comprising the four largest industries. But interestingly though, these industries do not show the highest growth rates. On that score, Environmental Services, Internet businesses show growth. Along with Investment Management and Staffing and Recruiting show growth. These industries all show 2.6-2.8% YOY growth in the number of executives employed.
Chart 3 shows the industries with the highest share of female executives. Whereby E-learning and again Staffing & Recruiting represent the fastest-growing segments here.
Recalculating the actual number of female executives and based on the data in Chart 2, we offer the overview in Chart 4. It provides a ranking of industries employing the most female executives. Within each of the top six industry categories here are the largest employers. And most of these are based in the US unless otherwise indicated:
- Financial Services: JPMorgan Chase & Co., Citi, and also Wells Fargo.
- Hospital & Health Care: Kaiser Permanente, United Health Care, and also HCA Healthcare.
- Non-profit Organizations: AIESEC (Canada), Toastmasters International, and also Future Business Leaders of America.
- Real Estate: CBRE, JLL, and also Newmark.
- Marketing & Advertising: “Selbstständig” (self-employed, Germany), Edelman, and also “Selbstständig” (self-employed, Switzerland).
- Health, Wellness & Fitness: Stay at Home Mom (UK), Cigna, and also Aetna.
And so we wanted to sample what some of these top employers of women executives are saying on the subject of gender equity. We took a look at the prominent players in the largest category: Financial Services.
“As featured last month [March 2021] in Bloomberg Equality, JPMorgan Chase has eliminated gender-specific language from its bylaws. Including replacing “chairman” with “chair.” … [And also] removing gendered pronouns like “his” and “her.” This announcement is consistent with the bank’s commitment to diversity and inclusion. … [and this commitment] includes a $30 billion commitment to advance racial equity and a commitment to expanding a diverse workforce.”
“Language is a powerful tool for inclusion. A 2019 Swedish study discovered that promoting the use of gender-neutral pronouns ‘reduces biases favoring men, which encourages more positive views of women, homosexuals, and transgender people. … [and this allows] the nonmale group to become more pronounced.’ The gender neutrality conversation is becoming more acknowledged. … “[And there are] about one-in-five U.S. adults knowing someone who goes by a gender-neutral pronoun.” (See Source.)”
Citi also released a “Women in Finance Charter Report” in 2019. It set global gender goals. These goals include an increase in the female share of certain executive positions. (See Source).
So this seems to be a common approach with Wells Fargo. They also added, for example, “…diversity, equity, and inclusion metrics are integrated into monthly business review meetings. (See Source.)“
But within the Hospital & Health Care industry, Kaiser Permanente is one of the largest employers of women. Kaiser Permanente says: “Our boards are 38% women. And 38% people of color. In 2020, 53% of the CEO’s direct reports were women. And nearly 43% of the executive medical directors were women. (See Source.)” Meanwhile, United Health Care emphasizes the pay equity aspect of their diversity and inclusion policy. “We are committed to and continue to prioritize pay equity for all employees. Fair and equitable compensation practices within a pay-for-performance framework. [These practices support] our culture and are critical to achieving our mission. We continue to work with independent, third-party experts to perform reviews of our compensation practices. [And we] evaluate pay equity in several respects, including by gender, ethnicity, and race. (See Source.)“
At least on the surface, it seems that leading employers in these industries have taken steps. They are crafting policies that target improved gender balances. Barrett Group clients have access to substantially more information. Our clients are able to formulate and pursue their career strategies. And this is whether at the geographic, industry, or functional levels.
As far as specializations or skills are concerned, Chart 5 offers an overview of how executives characterize their areas of expertise. This information comes from LinkedIn.
New Business Development and Sales Management come out on top. Next, these are followed by Finance and Budgeting in terms of sheer numbers of executives. And are altogether representing about 35% of the total. These top-ranked specializations range from 17% female to 25%. But whereas seen from the female share perspective, Nonprofit Organizations (45%), and Fundraising (44%) constitute the specializations with the highest shares of female executives. And also Human Resources (40%), Leadership Development, and Social Networking (38%) are highly ranked.
Return to The Economist article highlighted earlier in this Update. It pointed out the ongoing pay differentials between the sexes. These may well be improving. But the differences are still quite evident. And we would simply add that it is not only the rate of pay that is causing this difference. But also the areas of specialization. Typically, sales and business development are among the best-paid roles in many companies and industries. Unfortunately, so far at least, the female share of these best-compensated specializations is still quite low.
We often tend to look at these subjects in isolation, of course. But location, industry, and employer are intimately linked.
Nevertheless, the mix is apparently distinct per location. See Chart 6. As it often does, New York always seems to stand out in terms of the overall number of executives. And in this case, New York has a fairly average 27% female share. New York is followed by Los Angeles (26% female), and then London (23%).
In terms of growth, there seems to be an inverse relationship between the highest growth in executive populations YOY and the female share. This is as evidenced by the UAE, Frankfurt, Saudi Arabia, and Munich.
Chart 7 reselects only the female executive populations and re-ranks the locations. While, among many other changes, London moves down the ranking. Meanwhile, San Francisco moves up.
But, US data may color the prior charts.
So let us focus specifically on the EU, UK and ME cohort for a moment. We will examine the number of female executives who are there divided by industry (Chart 8). And also by location (Chart 9). Here we offer only the top 25 in each case. However, we find the top five industries change. They now include Retail, Management Consulting and Information Technology. This is quite a change from the overall data on Chart 4. Note that we do not have specific growth rates for the female executive populations. But can only offer industry growth rates. This bodes well though for women executives in the faster-growing industries. These are namely Financial Services (+3.2%) and Civic & Social Organization (+2.8%). And also Professional Training & Coaching (+2.8%) and Internet businesses (+2.7%).
Chart 9 simply underlines the incredible importance of London and Paris in this cohort. Showing the importance particularly for female executives.
Peter Irish, CEO The Barrett Group
Click Here To Download A Printable Version: Industry Update – Female Executives
In this particular Industry Update “executives” will generally refer to specific titles. These include the Vice President, Senior Vice President, Chief Operating Officer, and Chief Financial Officer. And Managing Director, Chief Executive Officer, Chief Human Resources Officer. And also, Chief Marketing Officer, Chief Information Officer, Managing Partner, and President titles. Unless otherwise noted, the data in this Update will largely come from LinkedIn. The data represents a snapshot of the market as it was at the time of the research.
Is LinkedIn truly representative? Here’s a little data: LinkedIn has approximately 722 million users. 174 million in the US. And 163 million in Europe. (See Source.) LinkedIn is by far the largest and most robust business database in the world. And it is now in its 18th year. LinkedIn defines the year-over-year change (YOY Change). YOY Change is the change in the number of professionals divided by the count as of last year. “Attrition” is defined as the departures in the last 12 months divided by the average headcount over the last year.