Opportunity or Setback?
High-potential women and men during economic crisis.
December 17, 2009
As the economic downturn rocked world markets there was widespread speculation about who stays, who leaves and who will lead global companies and firms in the future. As companies downsize to weather severe economic pressures, they find themselves in a bind. Cost cutting means reducing headcount. Yet investments in recruitment and retention of high-potential employees remain essential to ensuring future viability and success and the need for sound talent management programs to recruit, develop and retain top-performing talent has never been more important.
Are companies and firms that pay a premium to recruit up-and-coming talent effectively leveraging their investment in the leadership pipeline? And what impact has the economic downturn had on the careers of these cream-of-the-crop future leaders?
Catalyst addressed these issues in a longitudinal study of MBA alumni who graduated between 1996 and 2007 from top business schools around the world. Opportunity or Setback? High-Potential Women and Men During Economic Crisis, the first in a series of insight reports based on the study, provides a snapshot of how corporate management views high-potential employees as well as how women fared compared with men in Asia, Canada, Europe and the United States.
Findings showed that more than 50 percent of high potentials enjoyed career advancement or development opportunities at the same or a different company. Thirty-four percent received a promotion and 35 percent made a lateral move. Women (31%) were as likely to be promoted as men (35%). Regional differences existed. Notably, high potential women and men working in Canada received fewer promotions (23%) compared to their counterparts in Europe (41%), Asia (40%) and the United States (33%).
Despite the continuing recession, high-potential employees continued job-hopping, striking out for greater opportunities. A full 20 percent of high potentials changed employers, choosing greater opportunity even in the face of the uncertain economy, with women (16%) no more likely to change employers than men (21%).
Nor was geographic mobility stalled by the poor economic conditions, with 14 percent of overall high potentials relocating to tap career opportunities. Four percent of women and men relocated within their existing country of employment, seven percent relocated to a different country and four percent took temporary international assignments.
Still, not everyone escaped unscathed or experienced a career upside bounce. Ten percent of the overall high-potential talent pool reported losing their job during the downturn: nine percent due to downsizing or restructuring and one percent due to company or firm closure. Overall rates for women (12%) and men (10%) were similar.
Though the rates of job loss overall were similar, the study revealed that women in leadership positions were disproportionately hit. Startlingly, top-tier senior women (19%) lost their jobs at three times the rate of men (six percent). Promotions in Europe were also heavily weighted in favor of men, at 44 percent compared to only 26 percent of women.
Overall, high-potential women and men appear to have survived the recession with continued choices in employment and prospects for growth. The results of the study suggest that businesses cannot afford to assume a poor economy will keep high-potential women and men from actively seeking better opportunities. Therefore, talent managers who view a down economy as an opportunity to cut costs by scaling back on retention efforts should seriously reconsider.
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Founded in 1962, Catalyst is the leading nonprofit membership organization working globally with businesses and the professions to build inclusive workplaces and expand opportunities for women and business. Visit www.catalyst.org to learn more about our work and download Catalyst reports.