Moreover, most companies are grappling with two pipeline problems that make achieving gender equality in their organizations all but impossible:

1. The ‘broken rung’ remains unfixed. For the eighth consecutive year, a broken rung at the first step up to manager is holding women back. For every 100 men who are promoted from entry-level roles to manager positions, only 87 women are promoted, and only 82 women of color are promoted (Exhibit 2). As a result, men significantly outnumber women at the manager level, and women can never catch up. There are simply too few women to promote to senior leadership positions.

2. More women leaders are leaving their companies. Now companies have a new pipeline problem. Women leaders are leaving their companies at the highest rate we’ve ever seen—and at a much higher rate than men leaders. To put the scale of the problem in perspective: for every woman at the director level who gets promoted to the next level, two women directors are choosing to leave their company 

Why women leaders are switching jobs

Women leaders are demanding more from their companies, and they’re increasingly willing to switch jobs to get it. Three primary factors are driving their decisions to leave:

1. Women leaders want to advance, but they face stronger headwinds than men. Women leaders are as likely as men at their level to want to be promoted and aspire to senior-level roles. In many companies, however, they experience microaggressions that undermine their authority and signal that it will be harder for them to advance. For example, they are far more likely than men in leadership to have colleagues imply that they aren’t qualified for their jobs. And women leaders are twice as likely as men leaders to be mistaken for someone more junior. Women leaders are also more likely to report that personal characteristics, such as their gender or being a parent, have played a role in them being denied or passed over for a raise, promotion, or chance to get ahead.

“I’ve asked many times what I can do to get promoted, and I don’t get a good answer. I’m thinking of leaving. And it will be my company’s loss since they didn’t offer me the opportunity to advance. I hit a ceiling that didn’t need to be there.”

—South Asian woman, senior manager

2. Women leaders are overworked and underrecognized. Compared with men at their level, women leaders do more to support employee well-being and foster DEI—work that dramatically improves retention and employee satisfaction but is not formally rewarded in most companies. Indeed, 40 percent of women leaders say their DEI work isn’t acknowledged at all in performance reviews. Spending time and energy on work that isn’t recognized could make it harder for women leaders to advance. It also means that women leaders are stretched thinner than men in leadership; not surprisingly, 43 percent of women leaders are burned out, compared with only 31 percent of men at their level.

3. Women leaders are seeking a different culture of work. Women leaders are significantly more likely than men leaders to leave their jobs because they want more flexibility or because they want to work for a company that is more committed to employee well-being and DEI. And over the last two years, these factors have only become more important to women leaders: they are more than 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.

The factors that prompt current women leaders to leave their companies are even more important to the next generation of women leaders. Young women care deeply about the opportunity to advance—more than two-thirds of women under 30 want to be senior leaders. Young women are also more likely than current women leaders to say they’re increasingly prioritizing flexibility and company commitment to well-being and DEI (Exhibit 4). Companies that don’t take action may struggle to recruit and retain the next generation of women leaders.

An intersectional look at women’s experiences

Many women experience bias not only because of their gender but also because of their race, sexual orientation, a disability, or other aspects of their identity—and the compounded discrimination can be much greater than the sum of its parts. As a result, these groups of women often experience more microaggressions and face more barriers to advancement. Notably, women of color are more ambitious despite getting less support: 41 percent of women of color want to be top executives, compared with 27 percent of White women. It’s critical that companies and coworkers are aware of these dynamics, so they can more effectively promote equity and inclusion for all women. Although no study can fully capture the experiences of women with traditionally marginalized identities, this year’s findings point to these distinct experiences:

• Latinas and Black women are less likely than women of other races and ethnicities to report their manager supports their career development. They also experience less psychological safety² —for example, less than half of Latinas and Black women say people on their team aren’t penalized for mistakes.
• Asian women and Black women are less likely to have strong allies on their teams. They are also less likely than White women to say senior colleagues have taken important sponsorship actions on their behalf, such as praising their skills or advocating for a compensation increase for them.
• Latinas and Asian women are more likely than women of other races and ethnicities to have colleagues comment on their culture or nationality—for example, by asking where they’re “really from.”
• LGBTQ+ women and women with disabilities report experiencing more demeaning and “othering” microaggressions. Compared with women overall, they’re more likely to have colleagues comment on their appearance or tell them that they “look mad” or “should smile more.”
• Women with disabilities often have their competence challenged and undermined. They are significantly more likely than other groups of women to have their judgment questioned in their area of expertise and to have colleagues get credit for their ideas.

“As I was progressing through my career, people kept telling me I needed to have ‘executive presence.’ And what they really meant was I needed to look the part. I needed to have the right clothing; I needed to look feminine enough. That was always a challenge for me because I didn’t follow the typical feminine dress code.”

—White LGBTQ+ woman, senior manager

The importance of flexible and remote work

Two years after the pandemic forced corporate America into a massive experiment with flexible work, enthusiasm for flexibility in all its forms is higher than ever. A vast majority of employees want to work for companies that offer remote- or hybrid-work options. Only 7 percent of companies plan to pull back on remote and hybrid work in the next year, and 32 percent say these options are likely to expand.

Choice is critical. Women employees who can choose to work in the arrangement they prefer—whether remote or on-site—are less burned out, happier in their jobs, and much less likely to consider leaving their companies (Exhibit 5). This points to the importance of giving employees as much agency and choice when possible; a “one size fits all” approach to flexible work won’t work for all employees.

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The option to work remotely is especially important to women. Only one in ten women wants to work mostly on-site, and many women point to remote- and hybrid-work options as one of their top reasons for joining or staying with an organization. These preferences are about more than flexibility. When women work remotely at least some of the time, they experience fewer microaggressions and higher levels of psychological safety. The decrease in microaggressions is especially pronounced for women of color, LGBTQ+ women, and women with disabilities—groups who typically face more demeaning and othering behavior (see sidebar, “Remote-work options are especially critical for women with disabilities”).

Although remote and hybrid work are delivering real benefits, they may also be creating new challenges. Many employees—and especially women employees—are seeing important benefits from remote and hybrid work. Companies that offer flexible work options have also been able to diversify their talent pipelines; 71 percent of HR leaders say remote work has helped their organizations hire and retain more employees from diverse backgrounds. However, a majority of companies are concerned that employees who work remotely feel less connected to their teams and say that remote and hybrid work are placing additional demands on managers. It’s also possible that employees who work primarily from home—who are more likely to be women—will get fewer opportunities for recognition and advancement.

Remote and hybrid work can offer a reprieve from bias, but it’s not a substitute for systemic change. On one hand, it’s positive that women who work remotely are experiencing fewer microaggressions. On the other hand, it’s deeply problematic. Regardless of where they work, all women deserve to feel valued and included. Companies cannot rely on remote and hybrid work as a solution; they need to invest in creating a truly inclusive culture.

As companies continue to navigate this transition, there are three key things they should consider.

“I don’t think I could work full time if I were required to be in the office. I think it literally is that life-changing to be remote for me.”

—White woman with physical disabilities, entry-level role

Five steps companies can take to navigate the shift to remote and hybrid work

It’s not enough to tweak old policies and practices; companies that are transitioning to remote and hybrid work need to fundamentally rethink how work is done. To start, companies would be well served to focus their efforts in five areas:

1. Clearly communicate plans and guidelines for flexible work. As remote- and hybrid-work policies continue to evolve, it’s important for companies to share guidelines about who can work remotely and why so people don’t feel they’re being treated unfairly. It’s also important that companies provide clear guidelines to help employees navigate the day-to-day complexities of remote and hybrid work—for example, by establishing specific windows during which meetings can be scheduled and employees in different time zones are expected to be available.

2. Gather regular feedback from employees. Only about half of companies have surveyed employees on their preferences for remote and hybrid work over the past year. As companies roll out new remote- and hybrid-work norms, they will want to keep a regular pulse on what’s working for employees and what needs to be improved.

3. Invest in fostering employee connectedness. This means being intentional about working norms—for example, having everyone join meetings via videoconference so that it’s easier for employees to participate when they are working remotely. It also means finding new ways to foster camaraderie and connection, such as making creative use of technology to facilitate watercooler-style interactions and team celebrations. Companies could also benefit from dedicating resources to team bonding events and, whether they’re virtual or in person, taking special care to make sure that all employees feel included and that events are accessible to everyone.

4. Be purposeful about in-person work. Many employees don’t want to come into the office to do work they can just as easily do at home. In light of this, many companies are starting to refocus in-person work on activities that take advantage of being together, such as high-level planning, learning and development training, and bursts of heavy collaboration.

5. Make sure the playing field is level. It’s important that employees who choose remote- or hybrid-work options get the same support and opportunities as on-site employees. Managers play a central role here, and many could benefit from additional training on how to foster remote and hybrid employees’ career development and minimize flexibility stigma. Equal access to mentorship and sponsorship is also key, yet less than half of companies offer virtual mentorship and sponsorship programs. Finally, companies can put safeguards in place to ensure employees who take advantage of remote- and hybrid-work options aren’t disadvantaged in performance reviews. This means communicating to managers that employees should be evaluated based on measurable results—not when or where they work—and closely tracking performance ratings and promotions for remote, hybrid, and on-site employees.

The importance of managers

Managers play an essential role in shaping women’s—and all employees’—work experiences. When managers invest in people management and DEI, women are happier and less burned out. They’re also more likely to recommend their company as a good place to work and less likely to think about leaving their jobs, which translates to better recruiting and higher retention.

Expectations of managers have risen over the past two years: the shift to remote and hybrid work has made management more challenging, and a majority of HR leaders say their company now expects managers to do more to promote inclusion and support employees’ career development and well-being. But relatively few companies are training managers adequately to meet these new demands, and even fewer recognize DEI work and good people management in managers’ performance reviews. This disconnect is apparent in the way managers show up. Only about half of women say their manager regularly encourages respectful behavior on their team, and less than half say their manager shows interest in their career and helps them manage their workload (Exhibit 6).

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How companies can equip, motivate, and reward good managers

To begin to close the gap between what’s expected of managers and how they show up, companies could focus on two key objectives:

1. Give managers more training and support. Although a majority of companies provide general training for managers, far fewer address specifics that are critical to managing teams today, such as how to minimize burnout and ensure promotions are equitable. Research shows that when training focuses on concrete topics like these, it leads to better results.³ Companies could also benefit from stepping back to make sure people managers have the time and resources they need to do their jobs well.

2. Hold managers accountable and reward those who excel. It’s increasingly common for employees to review their manager’s performance, and prompts to gather more expansive input can be added to employee evaluation forms. Many companies track attrition rates, promotion rates, and other career outcomes and conduct surveys to measure employee satisfaction and well-being. Insights from these processes can be built into managers’ performance evaluations. In addition, companies can take steps to signal their expectations and reward results more clearly, such as by sharing well-being and diversity metrics with all employees and publicly acknowledging managers who stand out for their efforts to support employees and foster inclusion on their teams.

Recommendations for companies

To make meaningful and sustainable progress toward gender equality, companies should consider focusing on two broad goals: getting more women into leadership and retaining the women leaders they already have. That will require pushing beyond common practices. Companies with better representation of women, especially women of color, are going further. For example, they’re doubling down on setting goals and holding leaders accountable. They’re offering more specific and actionable training so that managers are better equipped to support their teams. And they’re offering a constellation of benefits to improve women’s day-to-day work experiences including, flexibility, emergency childcare benefits, and mental-health support. Companies that want to see better results would benefit from following their lead and break new ground.

Most companies also need to take specific, highly targeted steps to fix their broken rung. This starts with identifying where the largest gap in promotions is for women in their pipeline. Then companies need to make sure women and men are put up for promotions at similar rates, monitor outcomes to make sure they’re equitable, and root out biased aspects of their evaluation process.

When implementing new policies and programs, companies can ensure they don’t simply “check the box.” Programs should be high-quality—research shows that in some areas, low-quality programs can be more harmful than doing nothing at all.⁴ And companies should evaluate the impact of programs to assess whether benefits are equitable and identify areas where certain groups may need more targeted support.

Based on an analysis of HR and DEI best practices, we have highlighted select policies and programs that are more prevalent in companies that have a higher representation of women and women of color.

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The COVID-19 crisis and racial reckoning of 2020 pushed corporate America to reimagine the way we work. Two and a half years later, employees want to move forward with the workplace of the future.

This is especially true for women. Women are ambitious and hardworking. They’re more inclusive and empathetic leaders. And they want to work for companies that are prioritizing the cultural changes that are improving work. Companies that rise to the moment will attract and retain the women leaders—which will lead to a better workplace for everyone.