Home Top Stories Companies Suffer Losses when Women Leaders Leave: Report

Companies Suffer Losses when Women Leaders Leave: Report

When Women Leaders leave, the losses multiply, in terms of both job satisfaction and performance, says new research. According to the Potential Projects Spring 2022 Report, the best results are achieved when women are in charge.
The third of the six editions of The Human Leader study, a bi-annual examination of the key characteristics that define a new paradigm of human-centric leadership, is out with new analyses and insights. Conducted by Potential Project, global research, leadership development, and consulting firm, this edition covers a much debated and, simultaneously, the much-evaded topic of the impact of women leaders in our organizations.

The Impact of having Female Leaders Onboard

Although many organizations sincerely rally for equal opportunities, inclusion, and diversity in the workplace, none yet have been able to quantify the difference women bring to the table. Potential Project’s research has taken up the task and measured female leaders’ impact on not just job engagement and job performance – parameters that have been proven to have a direct relation to cost and revenue – but also on the actual avoided costs of lost productivity and employee replacement.
According to the report, female leaders lead to an increase of 5.5% in job engagement with a female follower and a 4.8% increase with a male follower, as compared to when the leader and the follower are both males. In contrast, male leaders only lead to a 2.6% rise in job engagement when their followers are female rather than male. The report also reveals similar results in terms of job performance where female leaders have the capability to increase their male followers’ performance by 5.5% when compared to a male leader.
Plus, it costs one-half to two times the annual income of a worker to replace an employee. Therefore, by keeping workers engaged, women leaders save $9,000 per year on every disengaged employee and between $30,000 and $120,000 per year on the ones that resign. In addition, the costs of lost productivity that women leaders are able to save reach a hefty $1.4 million per 1,000 employees.

What do Women Leaders do Differently?

The research shows these positive outcomes are driven by women leaders being perceived as wise and compassionate by their followers. They were shown to possess 28% more wise compassion than male leaders and scored higher than men on three out of the four attributes (courage, candor, transparency; presence being the fourth) that go into making a wise, compassionate leader.
Compassionate wisdom refers to the ability to do the difficult tasks that come with leadership in a humane manner. Women in positions of leadership are often confronted with more “hard things” than their male counterparts. Women are more likely to be appointed to leadership posts in organisations in crisis, according to studies, in part because of the stereotype that men would decline such a demanding job and that women are simply better at symbolically “cleaning up messes.” However, the thing to note is, women excel when given the chance to lead through emergencies, as we saw during the COVID-19 pandemic, when countries led by women had the quickest and most successful public health responses. In other words, women in positions of leadership have a track record of dealing with difficult situations.