The Future of Work in the United States

Since 2014, we have conducted longitudinal study on 365 significant US and UK-based organizations using this unique dataset. We interviewed senior leaders from dozens of firms to learn about their I&D issues, strategies, and progress. This has led to the division of companies into five broad groups. We conducted a first-time quantitative study for inclusion in this report. We conducted an outside-in analysis of employee sentiment on I&D in major industries to better understand the impact of inclusion on diverse talent experiences, engagement, and representation. This paper focuses on executive teams as they drive company strategy and organizational performance.However, I&D in other areas of leadership and management is also crucial. This paper includes a brief discussion on board-level diversity, whereas other McKinsey research focuses on I&D across companies.

Our research focuses on gender and ethnicity as intrinsic

Forms of diversity, but also acknowledges the multivariate nature of diversity, including acquired factors like education, socioeconomic status, and thought. In recent years, people have publicly embraced a more flexible sense of identity, stressing the importance of recognizing many types of intersectionality. Measuring this aspect is challenging, but it highlights the need of prioritizing inclusion efforts.For more details on our process, ransformOver the past five years, our research has found a statistically significant association between corporate financial performance and diversity, including gender and ethnicity. This is obvious at all levels of the company, especially on executive teams. Our new 2019 data set, which includes 15 nations across five continents, confirms and strengthens this association. Our earlier research showed a positive association between board diversity and financial outperformance, which is now statistically significant. (See Box 2: Research indicates a strong correlation between board diversity and business performance.Promoting gender equality is a significant opportunity. Our 2014 data set revealed that organizations with the highest levels of gender diversity in their executive teams had 15% higher profitability than those in the fourth quartile.

Three years later, in our Delivering through Diversity report, this figure had risen to

In our 2019 data collection, it has climbed to 25% (Exhibit 2). Female presence on executive teams has consistently increased over time, resulting in a wider difference between top and bottom quartiles. This also applies to gender diversity on boards (as discussed in Box 2). Female representation on executive teams in US and UK companies has increased from 15% in 2014 to 20% in 2019. Over the past five years, the annual average change has been 1.1 percentage points. Gender diversity on boards has been sluggish, but has increased significantly during the last two years. Exhibit 3 shows that improvement in our 2019 data set of 15 nations has been slower than in 2017. Only 15% of executive teams include women, and over a third of organizations do not have any female executives. Across countries, female presence in executive teams is low (Exhibit 4). Our data collection shows varying levels of female executive representation, from Norway (all companies have at least one female executive) to large economies such as Brazil, India, Germany, and Japan.The average US and UK corporation will need 29 and 24 years, respectively, to achieve gender parity on their executive teams, and 18 and 13 years on their boards, based on current trends.The picture varies by nation, with Brazil having 238 years on executive teams and 27 years on boards. Better board performance leads to improved corporate performance for both corporations and shareholders.

Our data suggests that advocating for gender equity on executive

Teams has additional benefits. Our US and UK data show that organizations with more than 30% female executive teams outperform those with 10-30% female participation.8 Companies with more than 10% female executive team representation tend to outperform those with less. Research indicates that organizations with greater gender diversity outperform those with lower diversity (E.6). The slow pace of change across industries and countries is a squandered opportunity. Most organizations are still far from meeting defined targets, such as the United Kingdom's 30% Club's goal of 30% female representation on boards and executive teams, set a decade ago. This group of corporate leaders believes the following:Gender balance on boards and senior management improves leadership and governance. However, up to 83 percent of organizations have no women on executive teams, with female presence at 8% or lower. Developed countries tend to have stronger diversity representation than emerging ones. See Box 3 for a comparison of gender diversity in developed and emerging economies.gresation.