A Look at What is Driving Female Leaders

In a new report, Russell Reynolds Associates examines the exodus of women from the workforce from a leadership perspective. Fewer women leaders than men are interested in taking on the CEO role, says the study. And when women left the C-suite this past year, it was because they felt undervalued. Men, on the other hand, were seeking better pay.

April 18, 2023 – Women leaders are leaving their roles at the highest rate ever. Given that women are already drastically underrepresented at the leadership level, this mass departure is cause for significant concern, according to a recent report from Russell Reynolds Associates’ Margot McShane, Leah Christianson, and Joy Tan.

For decades, much has been written about the gender divide in our broader workforce, particularly when it comes to the differences between how men and women approach and experience work. Women and men leave organizations for different reasons; they engage with team members differently; and there are different expectations attached to their personal lives. Russell Reynolds Associates’ Global Leadership Monitor further explores “The Great Breakup”—what researchers at LeanIn.org and McKinsey & Company are calling this exodus of women from the workforce—from a leadership perspective. Russell Reynolds found that, despite having near identical skill-sets, fewer women leaders are interested in pursuing the CEO role than men. Furthermore, as the firm’s data revealed, the top reason women in the C-suite left their roles in the past year was because they felt undervalued by their organizations. The top reason men left their jobs? Seeking better pay. “Simply put: women and men have different motivators,” the search firm said.

“This all comes down to motivation,” said Ms. McShane. “Women frequently go through more complex, multi-variable calculations every time they have to make a career decision. This, of course, affects how they consider leadership opportunities. Now, the Great Breakup signifies that women leaders are reprioritizing their lives. On one side of the ledger: all the roles they play, both within and outside of the workforce. On the other: career engagement and growth.”

To get more women into leadership and retain the women executives already in place, organizations can reframe career growth—or even the top roles themselves—as something that could improve every aspect of women leaders’ lives and, by extension, the organization’s success, according to the Russell Reynolds report. Relative to the population, women are far from well represented on leadership teams.

As Russell Reynolds explored in its recent article, “Gender Diversity in the C-suite, ” women account for 47 percent of the U.S. workforce benchmark but make up just 28 percent of executives in the S&P 100.

Additionally concerning, the firm found that women find even less representation in roles of power and influence. Less than nine percent of CEOs in the S&P 100 are women. The traditional CEO feeder roles of CFO, COO, and P&L leaders also show a significant underrepresentation for women, meaning that the pipeline of potential CEO candidates is equally unbalanced, perpetuating the problem. “With women leaders departing their roles at historically high rates, we can expect this gap to grow even more stark in the coming years,” said Ms. McShane. “This will be detrimental to what little progress has been made in increasing women’s representation at the leadership level. Despite having the same skill-sets, fewer women leaders are interested in pursuing the CEO role than men.”

Less Interested in the CEO Role

According to Hogan Leadership data, there are no meaningful differences between the leadership skill-sets of C-suite men and women. Furthermore, multiple studies show that women are actually better managers than men. However, Russell Reynolds’ Global Leadership Monitor showed that far fewer women are interested in the CEO role than men. Only 29 percent of C-suite women agree that they have a career goal to become a CEO, compared to 49 percent of C-suite men. The story isn’t much different for next generation leaders as, again, 29 percent of women in this population have a goal to become a CEO, compared to 40 percent of next generation men.

“Related, men are more likely to believe they are qualified—and to put themselves in the running—for a CEO role,” said Margot McShane co-leader of Russell Reynolds Associates’ board and CEO advisory partners. “Women, on the other hand, often need to be asked, as they tend to undervalue their own skills for myriad reasons—fear of backlash over seeming “too aggressive,” cultural differences, or lack of bandwidth between work and home responsibilities. Not wanting to accommodate these repercussions may translate to not wanting the chief executive role.”

Related: The Case for Promoting Women 

The pandemic’s effects on the global workforce may also offer some insight. Women are bringing updated expectations to the workforce, says Russell Reynolds. The firm’s research on leadership wellness found that, post-pandemic, employees and leaders’ motivations broadened to include mission orientation, flexibility, a community focus, and overall well-being, in addition to the historically typical motivators like financial incentives and career growth opportunities.

McKinsey’s “Women in the Workplace” report confirmed that this expanded paradigm is increasingly important for women. If the CEO role has not been modeled as a job that allows for this balance, it may not be as attractive to women leaders, the firm notes.

“Historically, the norms around what a successful career arc looks like were set up by and for men,” said Jenna Fisher, leader of the global CFO practice at Russell Reynolds. “They don’t take into consideration the complexities that women face to accelerate their careers while also having children. Companies that allow for longer ramp times to the C-suite—by extension, allowing for more freedom and flexibility for women and men caregivers—will be the winners.”

Why Are Women Leaving Executive Role?

There were myriad reasons why executives left roles in 2022. According to Russell Reynolds’ Fall 2022 Monitor, while historically predictable motivators like career advancement and better pay were the most commonly reported reasons overall, a desire to feel more valued by an organization came in a close third, highlighting some stark—although perhaps predictable—gaps between how appreciated men and women executives feel in their roles.

“Women in the C-suite were more than twice as likely than C-suite men to leave a role due to wanting to feel more valued by an organization, making it the most cited factor amongst women executives who left their roles in the past year,” the search firm said. “Additionally, women leaders were twice as likely than men to leave roles in search of new responsibilities. Seeking a different type of leadership and career advancement were also top reasons women leaders left their jobs.”

The story isn’t much different with next generation women leaders, as 59 percent of next generation women leaders reported leaving their organization for career advancement and 53 percent left to find an organization that made them feel more valued. Again, next generation women were nearly two times more likely than men (29 percent) to leave a role to feel more valued elsewhere. Next generation leaders’ experience matters, as it affects who will be in the C-suite five to 10 years from now.

Related: How HR Can Support Women’s Leadership

However, this does not suggest that women in the C-suite are less engaged in their company’s purpose than their male counterparts, according to the Russell Reynolds report. In fact, 84 percent of C-suite women reported feeling motivated by their organization’s mission and purpose, compared to 74 percent of C-suite men. “While it’s encouraging that most women leaders feel engaged by their company’s purpose, our data shows that mission alignment is not enough to keep them at a company that doesn’t make them feel valued,” the search firm said. “Consider a company that wants to make a counteroffer to a woman executive who is planning to leave her organization. While increasing pay may halt her immediate exit, it doesn’t address the root cause of the problem: feeling undervalued. Organizations should be mindful to diagnose the real reasons behind women leader departures and work to find ways to make systemic changes.”

Engaging Female Leaders

The current talent landscape is complicated. Over the past few months, there have been massive layoffs from major global players as recession fears mount. On the other hand, even as quitting slows globally, Russell Reynolds notes that retaining key talent continues to concern leaders, with buzzy terms like “quiet quitting” and “The Great Breakup” standing in for anxiety around employee and leadership engagement.

How Women Leaders Reached the CEO Suite
Women are still finding it challenging to secure senior executive or CEO roles. Currently, just one in five top executives are female, according to Glassdoor. While this does represent progress, there’s still a lot of work to be done. So, how can more women get opportunities to lead enterprise organizations? To answer that question, Korn Ferry spoke with 21 CEOs who happen to be women, most of whom are leading Fortune 500 companies. Although these leaders had unique starting points, different journeys, and varying perspectives, they also had a number of critical, shared milestones. In its study, Korn Ferry offered a look at those achievements and experiences that businesses can use to help women carve a path to the CEO role.

“These phrases may be new but they represent continued structural issues within our workforce, particularly for women leaders,” the search firm said. “To make substantial and sustained progress toward gender equality, companies must first recognize that women leaders’ motivations are different than men’s. Therefore, their mentorship, support, and career planning must function differently as well.”

To account for this, Russell Reynolds officer six things that organizations can do the engages female leaders:

1. Automatically include women leaders in succession processes and allow them to opt-out, rather waiting for them to actively opt-in: When all qualified applicants are in the running for leadership positions, the gender gap narrows. Allowing women to opt out of the running, rather than asking them to force their way in, sends the message that everyone is qualified and under consideration for top positions.

2. Fit the job to the candidate; don’t ask the candidate to fit to the job: Instead of presenting leadership roles as inflexible molds that women leaders must squeeze into, what if we reframed growth opportunities for women by asking: “What would need to be true for you to take this job?” Recognizing that women leaders have a different set of responsibilities and priorities than men allows organizations to adapt roles, marrying skillsets with motivations to accommodate a new type of leadership.

3. Give women access to a wider range of experiences that will better prepare them to be successful succession candidates: HR and L&D teams should construct more focused development programs that give women more “at bats,” and are intentional in plugging any potential missing business exposure and experience.

4. Develop sponsors: Despite research confirming the important role that sponsors play in supporting the career advancement of underrepresented talent, we cannot assume that sponsorship is 1) happening at all and 2) effectively and inclusively championing others. Setting formal parameters around expectations for C-suite sponsors and establishing an intentional pairing process are important foundations.

5. Bring awareness to bias: One cannot ignore the role of bias in talent processes. Efforts to introduce unconscious bias training in recruitment have grown and become a staple in many companies. Bias awareness training as part of internal talent reviews and succession planning needs to follow this path. When consistency and rigor are lacking, subjectivity, and individual preferences are given space to grow.

6. How do you know what’s motivating your women leaders? Ask them: Proactively ask women leaders how they are thinking about their career journeys and motivations, both in and outside the workforce. By embedding open dialogue into succession planning, organizations can keep the pipeline as inclusive as possible.

“While our initial findings show that women make career decisions based on different criteria sets than men, the topic of women leaders’ motivation merits additional research and is an area that we will continue to monitor and explore,” Russell Reynolds said.

Related: Record Number of Women Win Directorships but Gender Parity Lags

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media

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