Employee retention rates have reached their highest levels in 18 months, a welcome sign for organizations dealing with turnover and disengagement. Not all groups, however, are benefiting equally.
Pay Disparity Statistics
While 2023 data showed a 16 percent gap between men and women’s compensation, more recent research shows a 25 percent gap between men and women’s perception of compensation (how they view the fairness of their pay). This disparity highlights the ongoing challenges women face in the workplace.
Projections are now suggesting we might not see gender pay equity until 2056. This gap isn’t just about money; it drives attrition among women. When women see their male colleagues getting paid more for the same work — or worse, receiving raises while they face pay cuts — it sends a clear message about how their workplace undervalues their work.
While overall retention rates may be improving, many women, especially those in underrepresented groups, still encounter significant barriers to advancement and representation. McKinsey and Company’s recent Women in the Workplace 2024 report finds that Women of color make up only 7 percent of the meager 29 percent of women in the C-suite.
To retain women employees, companies need to tackle this inequality head-on — starting with fair pay.
Why Men Are Staying at Their Jobs Longer
Different demographics are staying in their roles for different reasons, often tied to how their workplace is meeting their needs.
The first study cited in this article shows that men are more likely to stay at their jobs into 2025, with a retention index number of 110, compared to women who reported a retention index of 98; lower sentiment for women continues to arise around organizational confidence, culture and compensation.
The data shows that men are staying put at their jobs because of pay raises that significantly influence their job satisfaction. While men are seeing substantial pay raises, women are lagging behind.
The gender pay gap has far-reaching consequences, impacting women employees’ immediate job satisfaction and their long-term financial stability and career growth. This is also known as the glass ceiling effect, where there are invisible barriers prohibiting women and other marginalized groups from advancing in the workplace.
Solutions for Retaining Women and Other Underrepresented Groups
To address this issue, organizations need to move beyond simply acknowledging the problem. They need actionable solutions to retain women and other underrepresented employee groups. Here are some strategies that can help.
Fair and Transparent Compensation
The most urgent step companies need to take is to ensure equitable pay for all employees, regardless of gender. Compensation transparency is crucial: companies should regularly audit their pay practices and take corrective actions where inequities are found. Offering equal pay is a business imperative. Organizations that fail to compensate women fairly risk losing top talent, which can disrupt operations and impact long-term performance.
Mentorship and Sponsorship Programs
Women and members of underrepresented groups still hold fewer leadership positions, and many leave their jobs before they can reach the upper levels of their organizations. Mentorship and sponsorship programs can make a significant impact by providing support, guidance and networking opportunities that help women advance their careers. When mentors offer career advice, introduce mentees to key stakeholders and help them navigate workplace dynamics, they build a pipeline of future leaders.
You can tailor workplace mentoring programs to meet the unique needs of various groups. For instance, women mentoring women can provide insights into navigating gender-specific hurdles and career advancement strategies that resonate with their experiences. This connection can help mentees feel validated and empowered to pursue their goals.
On the other hand, pairing women with male mentors can create pathways to sponsorship. Male mentors, especially those in leadership positions, can advocate for their women mentees and open doors to opportunities that might otherwise be inaccessible. These relationships can help bridge the gap between genders, allowing mentees to gain visibility within the organization and learn how to navigate workplace dynamics effectively.
Additionally, reverse mentoring programs can enhance the mentoring experience by fostering empathy and understanding across genders and generations. In these programs, younger employees mentor more experienced colleagues, sharing fresh perspectives on issues like technology, workplace culture and inclusivity. This approach empowers younger mentors while encouraging seasoned professionals to reconsider their perspectives and adapt their leadership approaches.
Employee Resource Groups
ERGs offer a supportive network where women and people from other underrepresented groups can find solidarity, share experiences and advocate for change. These groups foster a sense of belonging and drive cultural transformation within organizations. ERGs can:
- Advocate for better policies.
- Provide mentorship opportunities.
- Create leadership pathways for underrepresented employees.
ERGs also help connect employees with leadership, fostering important discussions about the challenges faced in the workplace and prompting leadership to take action on company policies. When adequately supported, ERGs can boost overall job satisfaction and improve retention.
The evidence is clear: to retain women in the workplace, companies must act. As organizations work to enhance their retention strategies, equitable pay is an ethical responsibility, yes — but it’s also a practical necessity. Women who feel fairly compensated and supported are more likely to stay, grow and contribute to their organization’s long-term success.
