More than two years after COVID-19 forced roughly 20 million workers out of their jobs, we’re continuing to see the pandemic transform the dynamics of the labor market, with a disproportionate impact on women. Lockdown layoffs in 2020 were followed by record numbers of workers quitting or changing jobs in 2021, while employees adjusted to new constraints, opportunities and bargaining power. This came to be known as The Great Resignation.1 Now we’re seeing another turn in the market: The Great Rehire. And as with the initial layoffs and resignations, the rehire has a powerful gender component.2
Events like Women’s History Month act as helpful spotlights in women’s empowerment, but sometimes the dynamics of the labor market cycle can have a far more acute impact. Here we look at the recent churn in employment, the sources of the gender disparity and the opportunities these shifts present to employers able to align their recruitment and benefits approaches to take advantage of this changing landscape.
How COVID-19 Inflamed the Gender Gap
Childcare, schools and daycare facilities are critical supports for women’s careers—reflecting persistent gender roles within families—and as these locked down in response to the pandemic, childcare duties fell predominantly on mothers. This was the case around the world. The International Labour Organization estimates global female employment fell by 4.2% in 2020 while male employment fell by 3%.3 The impact was most extreme between February and April 2020, when female employment fell 17.9% in the United States while that of men declined by 13.9%.4 Women are also overrepresented in sectors hit hardest by the lockdowns, such as hospitality, restaurant services and personal care.5 Taken together, the net effect of the pandemic was a significantly heavier burden on women’s careers and financial health, threatening to unravel decades’ worth of gains in gender equality and women’s financial empowerment.
The Great Resignation: A Problem with Burnout
The lockdowns inflamed the gender gap and The Great Resignation made it worse. In August 2021, women had a “quits rate” that was 1.1 percentage points higher than men.6 This spread gradually narrowed as children received vaccinations and schools reopened but remained at 1 percentage point in September and 0.81 percentage points in October.7
Burnout became a serious problem for women. The gender gap in the burnout rate nearly doubled in 20218 and one in three women considered leaving the workforce or at least least downshifting their career.9 This shouldn’t be surprising given that women spend roughly twice as many hours as men—62 hours per week vs 36—on childcare even in the European Union, generally seen as progressive on gender issues.10 These are current realities of family life that may impact employers’ ability to hire and retain workers.
The Great Rehire: Turning the Corner in the Race for Talent
With more than 40% of employees considering quitting during the Great Resignation11 and 65% actively searching for new roles,12 the turnover rate has presented a challenge to employers. But we see it as a unique opportunity for proactive companies to court women returning to work. The Great Rehire is turning into a race, with a powerful competitive advantage for businesses that understand how the needs, demographics and landscape of the labor market have changed.
Top talent is selective, and they’re factoring in more than just compensation. We’re increasingly seeing the recruiting power of a full spectrum of considerations that includes flexibility, culture, diversity and benefits.
DEI: Company Culture Matters
Surveyed employees increasingly list diversity, equity and inclusion (DEI) in their top considerations: 76% of job seekers list diversity as an important factor in evaluating offers.13 This is particularly true for Gen Z, which are not only the most diverse American generation but one that demands diversity in the companies they work for, invest in and deal with.
Can we expect the combination of disproportionate pandemic harm to women’s careers, the drive to rehire, and cultural pressure to make progress on the DEI challenge to benefit women in the talent race this year? Successful recruiters today seem to understand that DEI may be important within the larger context of a company’s relationships with its employees, customers and community. More specific to women’s financial empowerment, they appreciate that helping women recover lost ground and reclaim their economic momentum may have the potential to help their employers.
Overcoming Obstacles by Improving Alignment
Our recent report on the 2021 Employee Benefits Research Institute (ERBI) Workplace Wellness Survey14 highlighted the opportunities for employers to gain a competitive advantage in a tight labor market through meaningful financial education. But the pandemic has made evident that women’s needs and constraints differ from those of men.
Women provide a disproportionate amount of caregiving, their mid-career paths are different, they’re less likely to join equity programs, they live longer making retirement stakes higher,15 they experience more financial stress, they may be more conservative in their investments, and they have different financial wellness needs. They need financial literacy and benefits programs that are specific to their lifestyle, stresses and goals. Morgan Stanley at Work can help support you and your employees in getting the most out of your company benefits—and out of the current hiring opportunity. Today’s face of talent is female.