Labor data shows that women have led the labor force participation rebound since the pandemic.
While the COVID economic downturn had a disproportionate impact on women, the workforce shifts caused by the pandemic have accelerated a narrowing of gender gaps. Pew Research Center data shows that women now make up 51% of the U.S. workforce 25 and older with a college degree. The gender pay gap, while still significant, is at its narrowest on record according to Census Bureau data.
The resurgence of women in the workforce began prior to the pandemic, as jobs data from the Labor Department shows that women briefly outnumbered men in the U.S. workforce, reaching an all-time high in December 2019. Within months, women had lost more than 12 million jobs according to an analysis of Labor Department data from February to April 2020 conducted by the National Women’s Law Center. The Labor Department reported that women accounted for 55% of job losses in April 2020 alone – two million more than men in the same period – driven by the pandemic’s disproportionate impact on sectors with high female employment and caregiving disruptions.
Now, women are returning to the workforce at a record pace. An analysis by Moody’s shows that women are leading the rebound in labor force participation in major economies around the world since the pandemic. The labor participation rate for prime-age women between 25 and 54 reached an all-time high of 77.8% in June 2023 according to the Labor Department.
There is a long way to go before we reach true gender parity, but I’m encouraged by three factors that are contributing to this resurgence.
Women Are Re-entering The Workforce In New Industries And New Roles
Customer-facing industries that employ more women than men – retail, hospitality, and health care – were hit hardest by early pandemic job losses. As women re-entered the labor market, many explored different industries and took on new roles, a trend that began to emerge before the pandemic. Census data shows that women’s employment in business occupations such as financial managers, HR workers and operations specialists steadily increased from 2019 to 2021. Many of these fields tend to pay above median earnings and are more likely to accommodate flexible work arrangements.
Another sector that has seen more women enter the workforce is project management. While women in project management continue to face significant pay and certification gaps, the Project Management Institute points to the sector’s narrow leadership gap as an illustration of the growing opportunity for women leaders. This shift coincides with the transformation overload organizations are dealing with, as our research shows that large companies are investing in an average of 20 transformation initiatives ($1 million+) this year alone.
Women Are Taking On more Leadership Positions
Mounting research demonstrates that women leaders improve business performance. Studies published by the American Physiological Association have shown that team collaboration, transformational leadership and fair employee treatment improve in the presence of female leaders.
While the leadership gap remains significant, we are seeing more women take on leadership roles than ever before. An S&P analysis of Russell 3000 Index companies found that the proportion of women in board level and C-suite positions rose from just 9.5% in 2010 to 21.9% in 2021. This year, the proportion of women CEOs among Fortune 500 companies exceeded 10% for the first time in the list’s 68-year history.
More women are demonstrating their ability to be effective leaders, and the proof is in the overall success rate of companies with more women leaders. Organizations that have at least 30% women in leadership positions are 12 times more likely to be in the top 20% for financial performance, according to a Conference Board study.
Hybrid Work Offers Women Much Greater Flexibility
Initially viewed as a byproduct of the pandemic, hybrid work has permanently changed the way we work. WFH Research estimates that COVID accelerated the work from home trend by the equivalent of almost 40 years of pre-pandemic growth.
The greater flexibility afforded by this shift has had a massive impact on women. An analysis from The Brookings Institution found that women whose youngest child is under the age of five are driving the rebound in labor force participation. Glassdoor estimates that the expansion of remote work options allowed roughly one million women in their 30s and 40s to remain in the workforce at an age when prior generations may have stopped working to care for their families.
The latest figures from WFH Research remain largely unchanged this year. As of October, 12% of full-time U.S. employees worked remotely and 30% worked in a hybrid arrangement. As the workforce continues to evolve, remote and hybrid work will continue to play a significant role in bringing women into the workforce.
A Long Road Ahead
The path to reaching true gender parity remains long and this is especially true for women of color. While one in four C-suite leaders are women, just one in 16 are women of color, according to research published in SHRM.
There are signs of progress, as the labor force participation rate among Black women has rebounded from 59.3% in April 2020 to 62.9% in recent months. Research published in The Wall Street Journal found that 12% of new board directors named during a 12-month span between 2021 and 2022 were Black women, up from 2% in 2008.
Yet, meaningful change will require a strategic approach from C-suite leaders beyond simply recognizing the benefits of investing in and supporting women in the workforce. Paradigm for Parity, a coalition dedicated to addressing systemic gender and racial gaps that I’m proud to be a part of, eloquently lays out the commitment this requires: unconscious bias training, more women in entry level leadership roles, measurable goals, continued flexibility in where and how people work, and sponsorship of women with the most potential.
What gives me comfort is this: C-suite leaders are already re-evaluating their workforce and skill acquisition strategies in a tight labor market. We now have an opportunity to do our part to bridge the gender and racial gap by encouraging greater leadership representation for women and women of color in the process. This reconceptualization of workforce strategies that we’ve seen since the pandemic has given women more say over where and how we work, and I am hopeful that it will lead us to feel more fulfilled in our personal and professional lives than ever before.
