Women led companies are outperforming the S&P500, but what about the 'she-cession'

by Karla Cloete

Between 2014 and 2022, data shows that the 41 female-led companies in S&P500 were outperforming their male-led counterparts by miles. Fortune confirmed that in 2015 these companies were performing as much as three times better.

This is a big deal as even back in 2015 a women CEO wasn’t a common sight. That year Justin Wolfers from the New York times ran a story stating that CEOs named John (also Jon and James) outnumbered female CEOs all together.

“In what’s admittedly a minor victory, the record 41 women now running S&P 500 companies no longer need to measure themselves against John, or, for that matter, any Tom, Dick or Harry,” wrote  Matthew Boyle for Bloomberg. Female CEOs first outnumbered those named John in 2018.

This is good progress, but there is still a gender disparity in female leadership in middle and upper management which cannot be ignored by idolising women CEOs. 

But not everyone views this as progress. A contributing writer for Forbes noted the shrinking populations in 46 countries and pointed their finger at female leaders:

“Some 60 years after the invention of the contraceptive pill, women are voting – powerfully but silently – with their wombs. I’d argue instead that the revolution of women’s rapid rise demands more adaptation from countries, companies and … men if we want the human race to continue.”

A very convenient argument which ignores the cost-of-living crisis, record rates of inflation and a recession which is causing the cost of childcare, housing and health care to skyrocket and not to mention a literal global climate crisis.

This is compounded by a troublesome reality:

A year after the pandemic 54 million women left the workforce. Putting the participation of women in the global labour force as a startling 47%, the lowest rate in years. A concern not only for gender equality but also in light of 2022’s record-high talent shortage. Women have been consistently attaining more degrees (bachelor's and master's) since the 1980’s, so their departure from the workforce is an unrecognized brain drain.

The pandemic has significantly set back the gender gap. Economist Nicole Mason, who coined the term ‘she-cession’, noted that the economic impact of the pandemic hurt women’s wallets more.

When we don’t have female leaders our teams lose out: female leaders have more engaged teams with higher job performance outcomes saving millions each year according to Harvard Business Review.

Women managers are also more people-centered, they provide more emotional support and manage burnout and well-being more successfully, per a McKinsey report.

Why the ‘she-cession’?

Lily Brown from Penn Medical Centre had one explanation:

“My suspicion is that when women decided to leave the workforce during the pandemic, for the most part, it was due to either logistical necessity or the fact that when they started weighing the pros and cons, the pros weren’t the same as they had been, especially when you factor in child care,” Brown says.

Reports by Forbes detail that the pandemic was a breaking point for women- their workloads at home and work doubled, making it harder than ever to keep a balance and keep all the plates spinning. 88% reported higher workloads and 66% reported increased responsibilities at home, especially for women of colour. With 80% of women leading on assistance with school’s remote learning, meanwhile only 31% of fathers picked up the extra childcare duties during the pandemic. 

But employers who give women support have higher rates of retention and productivity. Meaning if we want to keep women in the workforce we need to provide them with flexible work hours, equal pay and opportunities for advancement while advocating for more equitable child and healthcare and extended paternal and maternal leave. 

The plight of the every women and the flight of the SHE-EO don't cancel each other out. We cannot celebrate women at the height of the careers and ignore the silent migration of other from the workforce.

If you want to learn about imposter syndrome in business leaders next, check out this blog. If you’d like to learn more about how Atara Partners can help your startup grow, find out more here.