What is the cost of not retaining women in tech?
According to NCWIT Women in IT: The Facts (2016 Update), it is a 64 BILLION dollar problem for companies in the United States:
“Hidden biases and barriers cost corporate America $64 billion per year in employee turnover — and that is a conservative estimate.” Kapor Klein, Giving Notice
How does the cost get to be so high?
In an TLNT HR article that examines the individual cost of losing and replacing employees at all levels we see this example:
A business loses 12 employees in one year, averaging one per month.
- Six of these employees were entry level, with an average salary of $40,000. It costs, on average, $16,000 to replace each employee at 40 percent of their annual salary, for $96,000 total.
- Four of these employees were mid-level, with an average salary of $80,000. It costs, on average, $120,000 to replace each employee at 150 percent of their annual salary, for $480,000 total.
- Two of these employees were senior, with an average salary of $120,000.At 400 percent of their annual salary to replace them, you’re looking at almost $1 million, specifically $960,000.
Add everything up and you’re looking at costs of over $1.5 million to replace just 12 employees.
“According to a study by the Center for Work-Life Policy, 74 percent of women in technology report “loving their work,” yet these women leave their careers at a staggering rate: 56 percent of technical women leave at the “mid-level” point just when the loss of their talent is most costly to companies.” NCWIT’s Women in IT: The Facts 2009
That information is gender neutral, if you factor in the added value having a diverse team brings, the cost rises when we are talking about retaining women in tech. Women are taking their training and their experience, at a time in their career when they are the most valuable, and leaving to pursue advancement with companies in other industries. They aren’t leaving to have children, they are leaving out of a sense of frustration, lack of value and inability to see a clear advancement path.
From a Harvard Business Review report we learn:
The women pursued their careers an average of 11 years; 60% worked well past the birth of their second child. None was pushed out. Fully 90% left not to care for their families but because of workplace problems, chiefly frustration and long hours.
In operations and marketing, leaders often focus on attracting new talent and new customers, but perhaps some focus needs to be on retaining women and men that are currently in our employ.
Examine your workforce. Ask several honest questions to determine where your company current stands in terms of retaining women:
- What is your rate of attrition in your mid-level positions?
- Are more women leaving than men?
- Do you conduct exit interviews?
- What are the primary reasons employees are leaving?
- What does this attrition equate to in dollars?
As important as attracting and hiring the right team is, equally so, if perhaps not more so, is the ability to retain your best employees. Identify who they are. Are they happy? Do they feel like they are valued and that their contributions add to the company’s success? Do you have programs and processes in place to encourage and engage women within your organization?
Before they leave, make sure you let them know you want them to stay.
In a recent presentation I delivered on the topic of retaining women in technology, I offered some suggestions organizations should consider when in comes to retaining women within their company:
- Acknowledge biases
- Assess the unspoken rules & regular behaviors of meetings/events
- Engage diverse and introverted members
- Look at how the work is distributed
- Revisit Performance Reviews
- Focus on the contributions (be selective in your descriptive words)
- Discuss possible career paths (12-36 months)
- Find ways to support and invest in diverse contributors
- Encourage cross-functional projects and roles
- Sponsor high performing candidates for new positions
- Support Affinity Groups
Sixty-four billion dollars is a lot of money! Break that cost down by company and in the example above it was $1.5 million – how could you use that money differently if you weren’t spending it on replacing your key people?
JJ DiGeronimo, a speaker, author and thought-leader for Women in Tech and Girls and STEM, empowers professional women and consults with senior executives on strategies to retain and attract Women in Technology to increase thought and leadership diversity within organizations.
Check out JJ’s new award winning book Accelerate Your Impact by downloading three free chapters.