The Way Forward

From the earliest weeks of the pandemic, Maryland Smith’s Nicole Coomber was noticing a worrying trend. Upwardly mobile professionals across her social media networks were opting to step back from their careers, overwhelmed by the new demands of their work lives and home lives.

The vast majority of them, she noted, were women and people of color. Their exit could pose a major setback for organizations as they seek to improve diversity, equity and inclusion among their executive ranks and corporate boards. “From that organizational perspective,” she said, “you have to be thinking about mitigation strategies. What can be done, right now, to mitigate this?”

Coomber is the assistant dean of the Full-Time MBA program and an associate clinical professor of management at the University of Maryland’s Robert H. Smith School of Business. At home, she juggles childcare responsibilities too, as mom to four boys.

What she had seen on her social media channels would later be borne out by data. One in three working women said they were considering downshifting their careers or leaving the workforce altogether in the past year, according to the McKinsey and LeanIn.org 2021 “Women in the Workplace” report.

Like few crises before it, the pandemic laid bare the inequities that have always existed for women with careers: They typically shoulder more of the burden at home; they typically make less money; and very few occupy top leadership roles at organizations.

Major disruptions have a way of forcing people to cast a fresh eye on how things are, and contemplate how they might be better. COVID-19 has forced business leaders to do some of that work – examining what we can learn and how we can make the workplace more equitable for everyone with skills to contribute.

Some changes are beginning to take shape.

“A lot of workplaces and organizations figured out that, yes, you can work from home more,” says Maryland Smith management professor Rellie Derfler-Rozin.

A mom to four kids from preschool to middle school, she appreciated her flexible work arrangements during the pandemic, as she juggled her teaching load along with her children’s home school and childcare needs. It was a lot, she says, but she was productive.

“People are able to self-motivate and work hard even when they don’t come to the office every day. I’m hoping for the longer term this will be helpful.”

Even in non-pandemic times, people need flexibility to balance work and life. It can help them be their best in both places.

‘CEOS OF THE HOUSEHOLD’

Mary E. Gross ’82, a founding partner of Human Edge Resources LLC, a human resources and leadership consulting firm, raised two now-adult children while working full-time. “My husband is a good contributor, but women still are the CEOs of the household,” she says.

Routine housework, shopping for groceries, scheduling doctors’ appointments, arranging carpools, lining up kids’ activities and caring for elderly parents—those things most often fall to women.

The Organisation of Economic Co-operation and Development refers to this as “unpaid labor.” In the United States, women perform an average of four hours of this work per day, compared to men’s two and a half hours. That’s a more even split than in 1965, when the government began tracking unpaid labor, a time when women did almost all of that work, and men very little. In 2020, when pandemic restrictions closed schools and kept babysitters and housekeepers at bay, responsibilities at home piled even higher.

“I tell people all the time the most important title that I hold is mother—period,” says Sherika Ekpo, MBA ’09, who took on a new leadership role and professional title during the pandemic: chief diversity and inclusion officer at information technologies firm Anaplan.

At the start of the pandemic, Ekpo was living in the San Francisco Bay Area, working at Google as a global diversity and inclusion lead. She was grateful that she and her husband were both able to shift to remote work, and grateful their kids could attend virtual school. But any semblance of work-life balance was gone. “When I rolled over, my desk was right there. There was no line of demarcation for when you start and stop.”

Still, she made it work. She helped her kids transition to online school and even found a learning pod for her son. In the midst of it all, Google asked her to move across the country to help grow the company’s presence in Atlanta.

“I actually felt a little bit of guilt—there were people who were leaving the workforce because they could not manage all of the day-to-day,” Ekpo says. “Luckily for me, I had some additional support.

But that wasn’t everybody’s story and it definitely wasn’t the story of some of the women who were around me.”

Ekpo packed up her family, bought a house in Atlanta, and found schools and activities for the kids. She didn’t intend to switch jobs at that time—on top of everything else she was doing. But when a friend and former colleague recommended her for the Anaplan position—and when that position remained unfilled after her family was settled—the opportunity lured her in.

“One of the things that really drew me to the company was its culture, and its focus on employees,” she says. Anaplan, like many companies, allowed employees to work from home in the early months of the pandemic and supported those who needed to care for others during the workday. Today, the firm allows employees to choose the work schedules that fit their needs, and it puts the onus on managers to figure out how to make it work.

The pandemic revealed how effective teams can be in flexible work arrangements. Now it’s up to organizations to keep that momentum going and find solutions, says Gross. “As a society and in corporate America, we really need to rethink and be flexible, and try to find the ‘yes’ answer, as opposed to jumping to the ‘no’ answer all the time, which is what I think happens too often.”

THE PERSISTING PAY GAP

Fully supporting women in the workplace means more than allowing telework arrangements. There is also the issue of pay.

Women have always earned less than men, but in the years leading up to the pandemic, the equal pay gap—that is, the disparity that remains after accounting for job selection, education and other factors that should contribute to wages—had narrowed. But the gender pay gap—the difference in average pay between the genders—has likely widened due to COVID-19 having pushed so many professional women out of the workforce.

According to the U.S. Bureau of Labor Statistics, women still earn only 82 cents to every dollar men earn. And even women at the executive level—of which there are far fewer than men—earn 94 cents compared to a man’s dollar for the same job and same qualifications.

In their research, Maryland Smith’s Margrét Bjarnadóttir and Cristian Dezső —along with co-authors David Anderson of Villanova University and David Ross of the University of Florida—outline a fairness-driven algorithm that companies can use to calculate their pay gap and fix it without ballooning their wage bill. Their strategy for companies: First quantify your pay gap using the standard analysis available. Next, allocate raises focusing on fairness and strengthening your compensation strategy.

Organizations may be tempted to focus on cost-effectiveness to eliminate the equal pay gaps. But that has many unexpected consequences which in turn can weaken their incentive structure. In rare cases, it could mean giving some men raises to reduce the gap, say the researchers. “Perversely [in these cases], you are paying women more ‘equitably’ by giving raises to certain men,” they wrote of their research in Harvard Business Review. “But this doesn’t necessarily mean pay is equitable. It just means you’ve shifted the indicators which drive how pay is determined.”

Having worked with numerous organizations in closing pay gaps, the researchers often get asked what works. “Starting with the data, conducting the equal pay analysis shifts the conversation from whether there is a problem, to which actions are necessary to ensure pay equity,” says Bjarnadóttir. “Data, budget and time are the three key ingredients: Data to understand the problem, budget to eradicate pay gaps, and a little bit of time to implement changes and introduce pay equity into compensation processes. Perhaps some of the more innovative approaches that we have seen include introducing the pay gaps into the executive level key performance indicators and as part of internal auditing. If the executive team is being measured on pay equity, it drives change.”

Women left the workforce at a higher rate than their male counterparts during the pandemic in many cases because their paychecks were smaller than their husbands’—and in the crisis, something had to give.

Even before the pandemic, women were more likely than men to sacrifice their careers, as couples grappled with heavy childcare costs. Across the United States, the average cost of childcare for one kid is over $8,000 a year—more than the price of in-state tuition for many public universities.

Maryland Smith economist Albert “Pete” Kyle, the Charles E. Smith Chair Professor of Finance, says for many families, the math just doesn’t make sense because of the marginal tax rate. “The trend toward higher taxes for the highest wage earners, if it continues, it’s  going to massively drive upper- middle-class women out of the workforce,” he says.

Here’s why: For a woman whose spouse already earns a high income, joining the workforce means her income will be taxed at a very high rate. Childcare costs could wipe out most, or potentially all, of her take-home earnings.

“If you think of daycare as the cost of doing business for a woman who is thinking about entering the workforce, the case for it being a tax deduction is very strong,” says Kyle. “If you tell businesses that you’re going to tax their profits at 50% or 60% and you don’t allow them to deduct their expenses, all those businesses are going bankrupt,” he says. Think of a woman entering the workforce as “a business of one,” he says. If you tell her you’re going to tax her income at 50% or 60%—or up to 90%—and you’re not going to let her deduct the cost of being in the workforce, which includes daycare, she’ll likely drop out of the workforce. “Instead of paying a nice amount in taxes to support our society, now she doesn’t pay anything.”

Kyle’s recommendation? Reform the tax code.

But until that happens, there are things organizations can do.

Gross, a board member for a nonprofit early learning center, says organizations can do much more to invest in the families on their teams, and they could do more to support the childcare sector for their employees. For example, companies could offer programs to help employees find quality, affordable childcare, and they could also partner with childcare providers to offer physical space in their buildings, or reserve slots with providers for employees’ children.

Too many organizations, she says, do nothing at all, even as highly valued, high-achieving women leave their ranks.

TOO FEW WOMEN IN CORNER OFFICES

During the onboarding process at Anaplan, Ekpo spoke with each member of the leadership team, every senior vice president and above. “I spoke with a surprising number of women,” she says.

And, she says, her conversations revealed that several of the women—like her—had their sights on one day becoming a CEO.

This year, the number of female CEOs among Fortune 500 companies hit an all-time high—but that’s still only 41 female CEOs among the 500 companies. That’s about 8%.

Creating more equitable workplaces means making it possible for women to stay on the career ladder. It means challenging the assumption that for couples, having children or supporting an aging parent means putting one career on hold.

“Organizations make choices about what they value in their promotions,” says Coomber. “If you are constantly passing up mothers or parents for big promotions, then you are sending a signal that those people and those experiences are not valued.”

Maryland Smith management professor Subrahmaniam Tangirala has extensively studied employee voice—people’s comfort level in speaking up at work and how important that is for organizations. His recent research, published in the Academy of Management Journal, finds that women don’t speak up as much as men do in organizations, often because they lack confidence.

But they can gain confidence to contribute more if they see women leaders speaking up first.

“The solution, then,” Tangirala says, “means having female leaders who speak up.”

Organizations should hire and promote more women at all levels, Tangirala says, and actively encourage employees to contribute and listen when they do.

“For organizations, it’s very clear that they need to encourage women to speak up at all levels, and especially middle management and frontline supervisors,” he says. “When they do that, it helps all the people below to learn from them and do the same.”

BUILDING BETTER WORKPLACES

Achieving any organizational change means summoning the involvement of the whole workforce, says Tangirala.

In research published in Organization Science, he finds that, even when they support the goals, men are often reluctant to engage in gender parity initiatives in the office—believing it’s not their place to do so. Instead they sit quietly on the sidelines, as they do in few other workplace projects.

As a result, such initiatives often fail to reach momentum, fail to resonate with stakeholders, and ultimately fizzle.

“A lot of the talk about coming back to the office—about flexibility—still focuses on women. And if we continue to keep this a women’s issue, it’s going to be difficult to solve and difficult to see significant change,” says Gross. She encourages men to support—and take advantage of—flexibility policies, too. And she encourages managers to herald those men and women as examples of how flexibility can help teams thrive.

Coomber is working on a qualitative research project, capturing women’s pandemic experiences, emotions and strategies. She spent the past summer interviewing more than 50 mothers, all of whom were working full time at the start of the pandemic. Those who persevered credited the support they received from their organization or manager, a spouse or partner, or from family members.

“It doesn’t always have to be big things—though the big things matter too,” says Coomber. “Sometimes it’s about solving small challenges that employees are facing.”

Women who didn’t feel supported looked to resign. “There was kind of this realization of ‘If my organization wasn’t there for me during the pandemic, they are never going to be there for me.’ That extra mile that some of those extra-miler employees might have given before, they are not going to be giving it anymore.”

Millions of women have left the workforce since the start of the pandemic.

Organizations—and the economy as a whole—need them back. Thriving in the new normal means not simply figuring out how to make the workplace better for women—it means figuring out how to make the workplace better.

WOMEN IN THE WORKPLACE

By the Numbers

• 1 in 3 women considered downshifting careers or leaving the workforce in the past year
• 3 million women left the workforce during the pandemic
• $8,000 the average cost of childcare for one child across the United States
• Women do 4 hours of unpaid labor every day, compared to men’s 2.5 hours
• Women earn 82 cents to every dollar men earn
• Executive-level women earn 94 cents to every dollar executive-level men earn
• 41 female CEOs among the Fortune 500 companies