Is Your Organization Driving Away Top Female Talent? Learn How to Retain Them

March 7, 2025 – The corporate world is facing a concerning trend—women in leadership roles are leaving at a higher rate than their male counterparts. In some cases, this shift is an unexpected consequence of existing workplace policies. As the trend continues, it is crucial to understand the drivers behind this phenomenon and devise strategies to reverse the tide, ensuring organizations remain appealing to top female talent, according to a recent report from Sheffield Haworth. The firm has observed an emerging trend in the talent market for several months as a result of the economic uncertainty and potential over-hiring pre-2023.

“Where firms are rebalancing and offering voluntary redundancies to optimize senior leadership costs as the economy remains unpredictable and growth stalling, there is a correlation between those accepting the packages and gender,” the firm said. “If organizations are not careful, they may soon have unintentionally pushed out key senior female leadership. This can only negatively impact these organizations’ ability to innovate and grow at a time when cognitive diversity is arguably more important than ever. It also has the potential to reverse the hard-won progress made in female senior leadership diversity by several years.”

So, what is going on? Why are so many women so willing to leave leadership roles, and what can companies do to keep them – especially when only around one in four senior leaders are women to start with? Why are female senior leaders leaving the workforce in record numbers?

The Sheffield Haworth explained that it has been found that the issue of voluntary redundancy is just the beginning of a larger problem. McKinsey’s most recent Women in the Workplace survey, in partnership with LeanIn.Org, reports that a record number of senior female leaders are leaving their current roles. The survey, which was conducted with over 27,000 employees at 276 organizations, reveals that there is a “great breakup” happening in the corporate world. Women are not only leaving their jobs in record numbers but are also switching jobs instead of leaving the workplace altogether. The results of the Women in the Workplace report suggest that there is still work to be done to create a culture where women can thrive.

Although women are becoming more ambitious, and there is progress in terms of representation at the C-suite level, with women currently occupying the highest rate of C-suite positions in history, making up 28 percent of C-suite executives, with six percent being women on color. This is a six percent increase since 2018 when women held only 22 percent of C-suite positions. “However, some of the other findings are concerning,” the Sheffield Haworth report said. “The gains made are still modest, with the smallest gains being at the manager, senior manager and director levels, meaning the pipeline of women for leadership is not growing quickly enough. The gender gap continues to widen as you move up in a company, even though women make up almost 50 percent of entry-level employees. The numbers are even worse for women of color.”

Related: Want Higher Profits? Put a Woman in the Top Job

Another concerning trend is the “great breakup” that McKinsey identified, which is continuing and evidenced in its report findings. Women at the director level are leaving at a faster rate than they are being promoted. For every woman promoted to director, two walk out the door. This, combined with the modest gains in promoting women to manager and director levels, could have a catastrophic impact on our ability to narrow the gender gap in senior leadership. Without a pipeline, there simply won’t be enough female candidates in the pool to choose from.

The reasons for the higher exits by women cited in the report:

Experiencing frequent microaggressions – such as questioning their judgement or being mistaken for someone more junior.

Women work harder on inclusion and culture – but they are not being recognized or rewarded for this, which contributes to a feeling of burnout and being unappreciated.

Women feel that the culture is wrong for them – the survey suggests women feel that DEI, flexibility, and employee wellbeing are not taken seriously enough.

Fewer women are promoted to manager roles than men – signaling that the company values women less while also creating a smaller pool of women to promote into senior leadership roles.

How Companies Can Retain Top Female Talent

The fact that women are switching jobs instead of leaving the workplace altogether is terrible news for the organizations they are leaving, according to the Sheffield Haworth report. “However, it is also a positive sign,” the study said. “It means that these talented women remain committed to their careers and are looking for the right companies to make a positive impact. Companies that can make themselves more attractive stand to benefit hugely from this trend. Let us look at some effective ways to do that. Many companies report on their gender pay gap, have gender-focused employee resource groups, or have started mentorship programs to get more women into senior leadership roles, according to the. However, these initiatives are only guaranteed to work if you try them.”

Women’s Representation in the C-Suites Declines as Gender Parity Remains Elusive

A recent report from Russell Reynolds Associates reveals a troubling trend in corporate leadership, as women’s representation in C-suites has declined for the first time in two decades. The analysis highlights that while progress is being made in some areas, significant barriers remain, particularly in key roles that traditionally lead to the CEO position. Let’s take a closer look!

“Review what you are doing and see if it is moving the needle,” the report added. “If your female employees do not feel any more motivated or happy at work, then your workplace policies and ERG’s may require review. They may need more resources and C-suite sponsorship and support to build trust with women in the organization. The exact solution will vary from company to company, but the point is that you will not know you have a problem to solve unless you review and measure the impact of what you are doing now.”

Sheffield Haworth also points to research which has shown that mentoring without sponsorship is not very effective. “High-potential women are over-mentored and under-sponsored relative to their male peers and are not advancing in their organizations,” the firm said. “Women are less likely than men to be appointed to top roles without sponsorship. Therefore, companies should focus on sponsoring women for senior roles more than mentoring.”

Stop Setting Your Female Leaders Up to Fail

The report also explains that it would be more favorable to be able to write, “set your female leaders up for success”, but there are so many cases of the opposite happening that actually stopping the opposite would, at this point, do more to retain top female talent. “If you only promote or hire senior female leaders during times of crisis, you do not give them a fair shot at success,” the study said. “Organizations should always have a proper female-centric succession plan in place so female talent is always in the wings and ready to take over key senior leadership roles. That way, you should avoid only appointing women to effectively take the fall for years or decades of institutionalized mismanagement. Your female talent should feel reassured that there is a process and a program they can participate in.”

Incentivize and Reward DEI Efforts

Women are “1.5 times as likely as men at their level to have left a previous job because they wanted to work for a company that was more committed to DEI,” says McKinsey, adding that 43 percent of senior women leaders feel burned out compared with 31 percent of men at the same level. “Recognize the efforts that your female leaders are putting into diversity and inclusion,” the Sheffield Haworth report said. “Consult with them on creating manageable and measurable KPIs for all leaders and managers to embed DEI into your organization. It is important to put this on the same level as commercial KPIs, or else the dial will never move, and those leaders who work harder at it will never feel rewarded.”

The firm also says to invest in unconscious bias training that works. “Unconscious bias training is hardly a new concept at this point,” said Sheffield Haworth. “But it had become, unfortunately, politicized and watered down by the plethora of ineffective and opportunistic courses adopted by organizations as a tick-box exercise. That said, most of the issues facing female leaders – from microaggressions and perceptions of lack of competence or experience to lack of recognition and lack of attention to employee well-being – are mainly the result of unconscious bias. So there remains a place for good training.”

Related: Executive Women Making Progress Closing Pay Gap

Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor – Hunt Scanlon Media