How Workplace Flexibility Contributes to Gender Pay Gap Reduction and Why Big City Employers Should Care

WASHINGTON - March 5, 2024 - PRLog -- Companies struggling to bridge the white-collar talent gap in major metropolitan areas would be well advised to understand the role of flexible work arrangements in attracting and retaining women -- an increasingly important pool of labor in an otherwise constrained environment. So says Gwenn Rosener, CEO of FlexProfessionals, a recruiting and staffing agency for professionals that serves the Washington DC and Boston metropolitan areas, in a podcast interview for journalists.

Tapping into this pool will require employers to assess the new nature of the modern workplace and reconsider what it will take to create an attractive environment for the female workforce. Two intertwined variables emerge as organizations engage in this corporate introspection: workplace flexibility and long-term compensation.

"A growing number of leaders have come to understand that bridging the gender pay gap through flexibility offers a critical path to bridging the professional talent gap. Women now account for almost 60% of college graduates. Women's workforce participation rate has hit a record level as men's workforce participation declines. Women are hugely important in our workforce, and their importance is growing" explains Rosener.

Nowhere is this more true than for companies operating in major metropolitan areas, which are often hubs for specific sectors of the economy -- such as technology, finance, government, and healthcare.

Since the pandemic, these areas have faced intense competition for top talent from other organizations within the same industry as well as across industrial sectors and geographies (big cities, it turns out, no longer have a monopoly on access to the best talent). The competition has led to higher turnover rates as better offers from rival companies entice employees.

"The fact is that employers today face a very tight talent market, and the long-term demographics aren't on their side," says Rosener.

Baby boomers, who account for about 25% of our workforce, are moving through the pipeline and are projected to exit the workforce within the next ten to 15 years.

"Meanwhile, birth rates in this country are declining. We're currently at 1.67 births per woman. And while there is immigration, it's just not going to make up for the traction we're losing -- especially in white-collar professions," she says.

Addressing Career Disruptions

While significant progress has been made in enhancing economic opportunities for women over the past century, challenges remain.

"On average, if you're a working woman, you earn about 18% less today than a man. If you're in the age group of 25 to 34 -- which are prime working years -- women earn about 8% less than men," says Rosener.

This wage gap has stayed steady over the past two decades and persists today.

"We're very fortunate to have the work of Claudia Goldin, who just won the Nobel Prize in economics for her work studying women in the labor force. There is much to celebrate. She reports how we've been breaking down the barriers that held women back, including access to education, their occupational choices, their career paths, and social norms," she says.

However, one of the significant stubborn barriers that remain revolves around the interruptions that often occur over a woman's career. These are mainly due to caregiving responsibilities and the fact that women still shoulder a disproportionate share of parenting and eldercare responsibilities.

"These interruptions to care for children -- and increasingly, now, aging parents, sometimes both at the same time -- have consequences. They result in career breaks, scaled-back hours, and time away from work. As a result, women may experience a decrease in earnings, a setback in earning potential, and, often, a loss of confidence. Some women drop out of lucrative fields, such as STEM professions, feeling that they have lost ground and will never be able to catch up," Rosener says.

What is now clear is that the severity and duration of interruptions and disruptions have largely been driven by a lack of flexibility in the workplace, which has contributed to the inability of women to stay and progress in their jobs as they juggle parenting and other caregiving responsibilities.

A Path Forward…and Avoiding a Step Back

Thanks to what is perhaps the only silver lining of the COVID pandemic, we may be at a point where a critical mass of companies have developed a different mindset around caregivers and caregiving.

"Most companies now have the tools to implement flexible work options. As a result, we may have broken the log jam that has kept the gender wage gap at about 18% over the past couple of decades. We have a real chance of continuing to chip away at the wage gap," says Rosner.

But to do that, it is critical to ensure the pendulum doesn't swing back in the other direction.

"We are seeing many employers now insist on having their workforce spend more time in the office. In some cases, they are going all the way back to having everybody in the office full-time. That would be a trend that is bad for all of us but bad for women in particular. And it would be really awful for closing the gender wage gap," she says.

Keeping Flexibility in Focus

It would also be a major step back for employers. There are hard costs associated with failing to address flexibility in the workplace.

"Most employers know how painful it is to lose a valued employee. There is the cost of finding a replacement, including the resources spent doing the recruiting. Once replaced, significant investments must be made in training and developing the new employee," says Rosener.

Beyond this, there is lost productivity and potentially compromised customer relationships, not to mention the knowledge that goes out the door when somebody leaves to take a career break or go to a more flexible company.

"When my two partners and I launched FlexProfessionals 14 years ago -- way before the pandemic -- we did not have evidence for what is now self-evident. We didn't, for instance, have Claudia Goldin's study or the lessons learned from the pandemic," she recounts.

Nevertheless, the team was certain that a lack of flexibility was one of the main reasons women were dropping out of the workforce and prevented from returning at the same pay levels or to the same level of responsibilities.

"While it is true that certain jobs have to be done in the office because of requirements such as heavy in-person customer interactions, work that requires special equipment or materials, or work with sensitive compartmentalized information like in the defense industry -- there are so many others that can allow flexibility," she says.

That is why the mission of FlexProfessionals remains unchanged after nearly a decade and a half.

"We specialize in placing professionals with at least ten years of work experience. Half of our candidate pool has a master's degree or higher, including PhDs. These are very accomplished professionals. We are also ensuring that employers see the business case for flexibility," she says.

To this end, the firm works with small organizations that may not be able to afford exceptionally qualified professionals on a full-time basis.

"We also work with larger businesses to fill mostly full-time hybrid or remote jobs with highly qualified professionals while supporting -- and improving – the businesses' gender diversity strategies. That, in a nutshell, is FlexProfessionals," concludes Rosener.

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[EDITORIAL NOTE: Click Here to read the full Q&A with FlexProfessionals CEO, Gwenn Rosener]