Representation of women in healthcare is faring better than that of other industries in the U.S., with women holding 59% of all manager positions, but women of color continue to face challenges when it comes to representation, finds a new report from McKinsey & Company.
That number is likely to increase in the future, since women account for 66% of all entry-level healthcare employees, an increase of 3% over last year. That's compared to 49% across all industries.
The percentage of women declines incrementally up the career chain, however. While women account for 66% of entry-level and 59% of manager positions, respectively, they make up just 49% of senior managers, 41% of vice presidents, 34% of senior vice presidents and 30% of C-suite executives. That still outperforms non-healthcare percentages at every stage. Across all industries, women account for just 21% of C-suite leadership.
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In healthcare, the sharpest decrease in the share of women occurs at the jump from manager to senior manager – a 10% drop. This pattern diverges from other industries, where the steepest decline (also 10%) happens earlier in the talent pipeline, at the first step up to manager – also known as the "broken rung" of the ladder.
WHAT'S THE IMPACT?
One possible explanation for this divergence is the nature of promotions at different levels, as the drop is most significant in payer and provider organizations. Nursing, for example, requires a large manager workforce on every floor and department of the hospital, and advancement from a nurse to floor or unit manager involves less formal promotion procedures. At the step up to senior manager, promotion panels are often introduced and additional qualifications are required, which may contribute to the larger drop in female representation.
Organizations are taking action to remedy this representation gap by hiring women externally for C-suite positions. The external hiring of women for top-level positions rose from 33% in 2017 to 42% in 2018.
That trend, however, may not be enough to combat systemic barriers such as promotion practices. For example, women are promoted at slightly lower rates than men until the senior vice president level, and while the differences may seem negligible, they compound and can result in much lower female representation at more senior levels.
These challenges are magnified for women of color. Across healthcare, the share of white women in entry-level positions starts at 46%, gradually declining to 25% at the C-suite. Women of color account for 20% of entry-level representation, but by the C-suite their share has dropped to just 5%. As with women overall, the sharpest decline for women of color is seen at the transition from manager to senior manager.
Compare that with the figure for white men, who are able to increase their share of roles nearly two and a half times as they move from entry-level to senior positions. By contrast, the percentage of men of color at roles throughout the industry stays flat, at about 11%.
Racial and gender diversity have a direct connection to performance. Companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies in the fourth quartile. Further, organizations with top-quartile ethnic and cultural diversity on executive teams outperformed those in the fourth quartile by 36% in terms of profitability.
THE LARGER TREND
The findings from McKinsey & Company may have implications for the persistent pay gap between genders. In medicine, men generally earn more than women for similar work, but data published in July in BMJ found that the income gap between genders shrinks substantially in practices with more equal gender distributions of staff physicians.
The analysis showed that, in nonsurgical specialty practices with at least as many women as men, men earn 12% more than women. However, that gap nearly doubles – to 20% – for practices with more than 90% male physicians on staff.
In absolute terms, this means that in nonsurgical specialty practices with 90% male representation, female physicians earn as much as $91,000 less per year than their male peers.