Marq Burnett, Associate Editor, The Playbook
May 18, 2022, 6:09am CDT Updated: May 18, 2022, 10:15am CDT
Many women who left the workforce at the height of the pandemic haven't returned.
The pay gap. The unique challenges women face when pursuing funding as entrepreneurs. The women who left the workforce during the pandemic and haven't returned.
Those are among the things that make Cate Luzio nervous about the future of work for many women.
Luzio is founder and CEO of Luminary, a global, membership-based career and personal growth platform for women.
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“Women still make less, and all these women that left the workforce are going to be coming back and making less than they were,” Luzio said. “When we think about the domino effect of that, it's quite large. I’m nervous that we can't even begin to estimate what the impact is going to be for the next 10 years.”
Before starting Luminary, Luzio spent two decades in financial services leading global multibillion-dollar businesses. Previously, she was global head of multinational corporate banking for HSBC Holdings PLC, managing more than 2,000 employees worldwide and prior to that, she served as head of multinational corporate banking at JPMorgan EMEA, which is based in London.
Luminary’s members are a multigenerational and intersectional community of individuals, entrepreneurs, corporations and organizations including UBS Financial Services Inc., JPMorgan Chase & Co., Unilever PLC, Verizon Corp., Indeed Inc., Mastercard Inc., Spotify USA Inc., ViacomCBS, ADP Inc. and others.
We recently spoke with Luzio about what women are facing in the Covid-19 era workforce and how employers can better support them. This interview has been edited for length and clarity.
What are some of the biggest current challenges you see women facing in the workplace?
Women in the workforce continue to just hit that –– whether you want to call it a glass ceiling or not –– it's this constant, ‘she’s just not ready yet.’
They're not getting the opportunities. We're still at a very far pay gap for women, and it's even worse for women of color.
So when you think about compensation, flexibility, roles, mobility and opportunities in general, there's still a very big gap.
When you look at women in the workforce, what they're asking for is mentorship. They're looking for sponsorship. They're looking for more opportunities to invest in their skills so that they're prepared when these opportunities come up.
On the women business owner side, it's still very similar, right? It's access to capital. It's access to community, mentorship and the business resources needed to build, grow and scale their companies.
All of those things are very similar for women. It's access to learning and development, and it's access to opportunities.
When you think about women in transition, it’s about ‘What is my next step? How do I find my next step? What is going to open that door? Where's my professional network?’
Those are the things I think that are still prohibiting us from taking a giant step forward, hence why we want men in our community because they're going to help us. They're part of our mission to advance women in the workforce.
Specifically with women in the workplace, what are some best practices for employers when it comes to how they can support women in their companies?
Pay audit is a huge one. All companies should be doing a regular pay audit at least once a year, not once every five years. I would actually recommend at least once a quarter.
For the majority of bigger companies, they go through midyear and annual performance reviews. At the same time, you should be doing a pay audit.
No. 2 is really thinking about their talent pipeline and ensuring that there is a 50-50 split in that talent pipeline. I’m not talking about quotas. I'm talking about actually identifying talented women earlier in the pipeline. You can do that through various revisions of your people process, your compensation policies and also your promotion policies.
How are you promoting? When are you promoting? What does that look like? There’s also talent sharing. A lot of women will walk out the door and not even understand what other opportunities are in some of these larger companies. Those are some of the easier things to do.
From a benefits and policy standpoint, how are we looking at women? Not that women need something more than men, but they are predominantly the caregivers. They are the parent that will have to sacrifice to stay at home or be that person that has to pick someone up. There’s the child care issue.
You really have to think about flexibility and benefits in a different way. I see some companies doing that. We work with a lot of corporate members of Luminary that are really invested in this in order to retain talent and also hire and attract talent.
Why are we still seeing such a disparity in funding for women-founded businesses?
I still think this is part of the huge issue of the lack of networks for women. Men have bigger networks.
If you look at the history, men have bigger access to networks, they can get those introductions and they can pull on those introductions.
It's the same in the corporate workforce, right? You know the guy, so you give them the job.
It's the same thing in the fundraising world.
Since access to capital is so critical, the other thing around fundraising is critical that banks need to learn to support and invest in smaller businesses. That's a problem right now because of the regulatory environment versus just the banks. I think that has to evolve dramatically. There also needs to be more education.
For business owners, the problem can’t just be that there's no capital. There's tons of capital out there.
Do business owners really understand what kind of capital they need? How do they deploy that capital?
A lot of what we do at Luminary is that investment in a business owner's understanding around their P&L, around financials and around running a business versus ‘I have this great idea, and now I have to go raise money.’ Do you understand the strings that are attached when you get capital? Of course access to capital, but it's not just the fundraising side.
Even though women are getting a lot less funding, I would argue that not every business should fundraise. There has to be a massive paradigm shift in the fundraising world.
I think we're going to see that in the next five years, especially now because interest rates are no longer at zero. You have a high and increasing inflation. Money is not going to flow as fast. People are going to say, ‘Wait a second, I don't necessarily want to just deploy my cash to invest in this fund.’ We're already seeing that. They're going to want to look at profitability versus just revenue and growth. That's my hope.
I’m sure you come across a lot of women who share their personal stories with you. Are there some common threads that show up when they’re discussing their mental health?
There's what we call the exhaustion gap. Women are exhausted. They're exhausted because if you take a woman in the workforce, they are tasked with not only doing their job and excelling at it, they've got to network their butts off, right, because they don't have the built-in network that most white (cisgender) men have.
They've got to mentor other women too, right? They have to mentor every young woman out there because they're picking up slack for the white men that aren't doing it. I'm not disparaging white men, but that's the truth.
If you're a caregiver or working mother, it's double the load. We carry the household load in most situations. That's just statistically true for women in the workforce.
Like the traditional workforce, if you’re a business owner you’re also networking, getting introductions and you're running your business.
Statistically, 70% of women-owned companies bootstrap so it's all on your shoulders, adding to the stress that adds to mental health challenges and issues.
Pre-pandemic, mental health was bad for many women. Now that you've added this pandemic that we're still in, that's just exacerbated it.
Speaking of Covid, we obviously saw a lot of women leaving the workforce during the pandemic. What type of long-term impact will this have?
One in three women that left the workforce still haven't come back. What I can say is we know pre-pandemic that the gap and resume penalty –– which is also known as the unemployment penalty –– is a huge issue for women. A lot of that is for child care and caregiving.
We know that the minute you're out of the workforce for one year, your salary automatically decreases 40% from when you come back.
The impact to your earnings potential is massive. Even with the labor market where it is and women not coming back, these women are going to at some point say that they have to get back. 'How do I get back in the door? I've lost my access to my network. I haven’t lost my skills, but who do I know in these companies?'
Career comeback programs work to an extent, but that is the impact that we're seeing.