To close the gender gap, more women are needed in leadership

While women worldwide are making progress closing gaps in critical areas such as health and education, significant gender gaps persist in the workforce and in politics. Given current rates of change, this year’s Global Gender Gap Report estimates it will take 217 years to close the economic gender gap.

As part of its workforce gap analysis, the World Economic Forum turned to LinkedIn to better understand the trends in gender equality across the workforce. Because of our unique visibility into real-time workforce trends, LinkedIn data can provide more depth, nuance, and timeliness than the sort of data historically gathered by governments or NGOs. Our data provides insight into the role women leaders play in driving overall economic equity and participation.

Women in Leadership: Underrepresented, with Limited Growth over a Decade

Our analysis found that women represent fewer than 50% of leaders in every industry analyzed—and in some fields, like energy and mining or manufacturing, representation of women is far lower, with women holding fewer than 20% of leadership positions. And the rate of progress for women has been slow: over the past ten years, the proportion of female leaders increased by an average of just over 2 percentage points across the 12 industries studied.

LinkedIn data points to only three industries where female corporate leadership exceeds 40%: healthcare, education, and the nonprofit sector—industries that have relied on female workers for generations,  which has potentially provided women with more time and opportunities to work their way into senior roles. Unfortunately, as the Global Gender Gap Report also notes, historically female-dominated industries tend to pay less than those with higher male representation. When women enter a profession in large numbers, pay tends to decrease relative to other industries.

A Rising Tide: More Women Leaders Correlate with More Women Hired

Our data shows that when women are better represented in leadership roles, more women are hired across the board. This holds true even when considering disparities in the size of female talent pools across industries.

This is not necessarily surprising. Numerous studies suggest that, consciously or not, individuals are more likely to hire people like them. Female candidates may also self-select into companies with higher proportions of leaders who are women, attracted to companies perceived as having more opportunities for advancement or mentorship. Additionally, prior WEF research indicates that female CEOs actually pay their high-earning women more than male CEOs do, which may create a financial incentive for women to join such companies.

Vicious Cycle to Virtuous Circle: Increasing Equity by Increasing Women Leaders

So if the proportion of women in leadership is growing too slowly, and these leadership positions are important to closing the overall economic opportunity gap, it is clear that we need to increase and accelerate female representation at the highest level.

Our analysis found a strong correlation between representation of women in leadership positions in a given industry and hiring rates for additional women leaders. The challenge of increasing the proportion of women leaders is then a Catch-22: it seems the way to get more women into leadership is by already having women in leadership.

Fortunately, there is some good news to report as well. LinkedIn’s data shows that a few industries, including Legal, Finance, and Real Estate, have all increased the rate at which they hire women for leadership positions over the past decade.

Female representation in leadership is a top indicator for hiring of women at all levels, thereby creating a deeper bench of female talent at more junior levels to be promoted into leadership roles.

Increasing the proportions of women leaders—both through improved hiring rates for leadership positions as well as building strong internal pipelines for promotion—may signal the start of a virtuous circle, eventually leading to more equity of economic opportunity for women globally.

While today’s Global Gender Gap Report demonstrates the progress that has been made over the past decade, it is clear that we still have a long way to go, especially when it comes to economic participation. Encouraging more female leadership is one of the levers for increasing gender equity in the workforce. Ultimately, however, if we are to get there, it will require men and women, at all levels, to embrace and promote diversity and inclusion.

The full Global Gender Gap Report is available here.