November 16, 2016
A lack of flexible roles means that two thirds of professional women who return to work after a career break, work fewer hours than they prefer or go into lower-skilled or lower-paid roles, claims new research by PwC, in conjunction with Women Returners and 30% Club. 427,000 UK female professionals are currently estimated to be on a career break and likely to return to the workforce in the future. Of those, three in five (249,000) are likely to enter lower-skilled roles when they return to work. This has serious implications for earnings as this downgrading is associated with an immediate 12-32 percent reduction in hourly earnings, depending on whether the woman remains with the same employer. A further 29,000 women returning to part-time work would prefer to work longer hours but are unable to due to a lack of flexible roles. Altogether, two-thirds of (or around 278,000) women could be working below their potential when they return to the workforce.
Addressing the incidence of ‘occupational downgrade’ could therefore have significant personal economic and business gains for professional women working at their full potential, according to the research – boosting their combined annual earnings by £637 million. Increasing the hours worked by part-time working women, meanwhile, could contribute an additional 14,000 full-time employees to the UK workforce annually, while boosting earnings to this group by £423 million.
Taken together, the research estimates that returning professionals lose out on £1.1 billion of earnings annually from the career break penalty, equivalent to £4,000 for each woman. The research estimates that the multiplier effect from the increased earnings and spending power of these women (beyond the increase in their incomes) could drive a further increase in output in the UK economy of £1.7bn.
Laura Hinton, executive board member and head of people at PwC, said:
“The business and economic arguments for getting more women back into high quality work following a career break are compelling. Our research shows the UK economy could see a £1.7bn boost, women will get higher earnings and businesses will benefit from a stronger pipeline of female leaders and more diverse teams. Many women want to return, it is the system that needs to change.”
The research suggests that opportunities for women are constrained by a lack of flexible or part-time roles available. According to a 2015 Timewise study, 6 percent of advertised roles with a salary of over £20,000 were available on a flexible basis, shrinking to 2 percent for roles with a salary of over £100,000.
Women also face barriers of negative CV bias amongst recruiters and potential employers, who assume that the lack of recent experience is automatically associated with an erosion of skills.
“A CV gap presents a significant barrier to resuming a successful professional career after a multi-year break,” said Julianne Miles, Co-Founder and Director of Women Returners.
“Employers often assume a lack of recent experience equates to a loss of the ability to operate at a senior level. A US study found that managers prefer to hire a less qualified candidate over one who has been out of work for more than six months, as they assume skills have deteriorated; and this recruitment bias is far greater with a multi-year gap. Those returners seeking a part-time or flexible role to combine work with family life also struggle to find a suitable professional opportunity.”
“Recruiters and employers need to do more to reassess how they evaluate a candidate’s potential and work to address the negative bias towards CV gaps,” said Brenda Trenowden, Global Chair of 30% Club. “Getting more senior women back into the workplace will help businesses build stronger pipelines of potential female leaders and improve the diversity of businesses at senior levels. Returnships create an effective route back to mid- to senior-level professional roles, and the availability of part-time and flexible opportunities in professional roles helps widen the pool of talent businesses can access.”