November 18, 2020 –
by Jeanne de Cervens, Founder and President of JdeC Strategies, LLC.
The gains women have made in the workforce and in financial independence are now at risk due to the disproportionate impact of the pandemic. Nearly 80% of the 1.1 million workers who dropped out of the workforce in September were women — four times the rate for men. (Bureau of Labor Statistics) Research by Fidelity Investments found that of the women who are continuing to stay in the workforce, 39% are actively considering leaving or reducing hours due to increased responsibilities for schooling and caregiving.
However, women who leave the workforce risk loss of financial independence and career advancement and are unlikely to regain lost income and retirement savings when they do return to work. Before leaving a job, women are advised to prepare for the short and long-term financial consequences of doing so, as well as to consider other options, such as moving to a part-time position. Moving to part-time will help provide the needed additional flexibility, as well as the ability to continue both earning an income and retaining certain benefits. Thanks to the SECURE Act enacted in December 2019, they may still have the option to save for retirement. The SECURE Act requires employers, starting in 2021, to include ‘long-term, part-time employees’ in the class of employees eligible to participate in their workplace retirement savings plan.
The advantages of women in the workforce are well documented. Fortune 500 companies with the highest representation of women on boards financially outperform companies with the lowest representation of women on boards. Gender-diverse teams have higher sales and profits compared to male-dominated teams, and women bring positive results to the culture of an organization in terms of innovation, resilience and collaboration. The Center for Creative Leadership found that a higher percentage of women in an organization resulted in overall greater job satisfaction and retention.
Employers and government can also reverse the pandemic’s disproportionate impact on women and preserve their value to the workforce by providing more support, — from more flexible leave and work hours to additional resources for caregivers and those who need care. The heightened commitment from employers to diversity and inclusion bodes well for such support. The benefits of diversity in the workplace are becoming increasingly apparent. Women cannot afford to take a step back from the gains made.