It Costs to Employ Women, but Pays a Talent Dividend

<i> Felice N. Schwartz is president and founder of Catalyst, based in New York. This article has been excerpted from the January-February Harvard Business Review. </i>

The cost of employing women in management is greater than the cost of employing men. This is a jarring statement, partly because it is true, but mostly because people are reluctant to talk about it. The rate of turnover in management jobs is higher among top-performing women than it is among men. Women also have a greater tendency to plateau or to interrupt their careers in ways that limit their growth and development.

But here is another truth: The greater cost of employing women is not a function of inescapable gender differences. Women are different from men, but what increases their cost to a company is principally the clash of their perceptions, attitudes and behavior with those of men, which is to say, the policies of male-led corporations.

The gender differences relevant to business fall into two categories: those related to maternity and those related to the differing traditions and expectations of the sexes. Because maternity is biological rather than cultural, we can’t alter it--but we can dramatically reduce its impact on the workplace and in many cases eliminate its negative effect on employee development. We can accomplish this by addressing the second set of differences, those between male and female socialization. Today, these differences exaggerate the real costs of maternity and can turn a relatively slight disruption in work schedule into a serious business problem and a career derailment for individual women.

Women in the corporation are about to move from a buyer’s to a seller’s market. The startling recognition that 80% of new entrants in the work force over the next decade will be women, minorities and immigrants has stimulated a mushrooming incentive to “value diversity.” There is no question that the top ranks of business will include more women. There remains, however, the question of how these women will succeed--how long they will stay, how high they will climb, how completely they will fulfill their promise and potential, and what kind of return the corporation will realize on its investment in their training and development.


There is ample business reason for finding ways to make sure that as many as possible succeed in reaching top management ranks. In the case of women, the first step is to recognize that women are not all alike. Like men, they are individuals with differing talents, priorities and motivations. Like many men, some women put their careers first.

Companies need to clear away the artificial barriers that block women’s path to the top. It is clearly counterproductive to disparage in a woman with executive talent the very qualities that are most critical to the business and that might carry a man to the CEO’s office. Women also act as role models and mentors to younger women. Since career-primary women still have few role models, a company with women in its top echelon has a significant advantage in the competition for executive talent.

The majority of women, however, are what I call career-and-family women, women who want to pursue serious careers while participating actively in the rearing of their children. Most of them are willing to trade some career growth and compensation for freedom from the constant pressure to work long hours and weekends.

Most companies today are ambivalent about the career-and-family women in their management ranks. Consider a typical example, a woman who enters management at age 22. For nine years, the company invests in her career as she gains experience and skills. But at 31, just as the investment begins to pay off, she decides to have a baby. Can the company afford to let her go? The common perception now is yes, the corporation can afford to lose her, unless, after six or eight weeks or even three months of leave, she returns to work full time with the same vigor, commitment and ambition that she showed before.


But what if she wants or needs to go on leave for six months or a year, or heaven forbid, five years? In this worst-case scenario, she works full time from age 22 to 31 and from 36 to 65--a total of 38 years as opposed to the typical male’s 43 years. That’s not a huge difference.

The high-performing career-and-family woman can be a major player in any company. She may switch gears in mid-life and re-enter the competition for the top. The price of retaining these women is threefold: The company must plan for and manage maternity, must provide the flexibility that will allow these women to be maximally productive and must take an active role in helping to make family supports and high-quality, affordable child care available to all of its employees.

See related story in View Part-time employment is the single greatest inducement to getting women back on the job expeditiously and the provision most desired by women. However, the most promising form of flexible scheduling is shared employment: two people taking responsibility for one job. It is feasible at every level of the corporation except at the pinnacle.

Family supports--in addition to maternity leave and flexibility--include parental leave for men, support for two-career and single-parent families during relocation and flexible benefits. But the primary ingredient is child care. The capacity of working mothers to function effectively without interruption depends on the availability of good, affordable child care.


We have come a tremendous distance since the days when the prevailing male wisdom saw women as lacking the kind of intelligence that would allow them to succeed in business. Women themselves have harbored an unspoken belief that they couldn’t make it because they couldn’t be just like men and nothing else would do. But now that women have shown themselves the equal of men in every area of organizational activity and that they can be stars in every field of endeavor, we can all venture to examine the fact that women and men are different.

On balance, employing women is more costly than employing men. Women can acknowledge this fact today because they know that their value to employers exceeds the additional cost, and because they know that changing attitudes can reduce that cost dramatically. Women have always matched men in natural ability. In a few years, they will equal men in numbers as well as in every area of economic activity.

Is society better for this change? Women’s exit from the home and entry into the work force has created problems--an urgent need for good, affordable child care; troubling questions about the kind of parenting children need; the costs and difficulties of diversity in the work place; the stress and fatigue of combining work and family responsibilities. Wouldn’t we all be happier if we could turn back the clock to an age when male and female roles were clearly differentiated and complementary?

Nostalgia, anxiety and discouragement will urge many to say yes . My answer is emphatically no . Two fundamental benefits that were unattainable in the past are now within our reach. For the individual, freedom of choice--in this case the freedom to choose career, family or a combination of the two. For the corporation, access to the most gifted individuals. These benefits are neither self-indulgent nor insubstantial. Freedom of choice and self-realization are too deeply American to be cast aside for some wistful vision of the past. And access to our most talented human resources is not a luxury in this age of explosive international competition. It is the barest minimum that prudence and national self-preservation require.