Horacio D. Rozanski, Vice President and CPO, Booz Allen Hamilton

The U.S. Equal Employment Opportunity Commission

Meeting of May 23, 2007 - Achieving Work/Family Balance: Employer Best Practices for Workers with Caregiving Responsibilities

On behalf of the Center for Work-Life Policy and the Hidden Brain Drain Task Force, I extend my sincere appreciation to the Commission for the invitation to provide a statement this morning on the very important issue of work/family balance. In my role as Vice President & Chief Personnel Officer for the global consulting firm, Booz Allen Hamilton, I am a member of the Hidden Brain Drain Task Force, and have the privilege to speak about the work of the task force and my own firm’s experience in implementing programs to support employees in balancing their work and family lives. This discussion draws heavily on Sylvia Ann Hewlett’s Off-Ramps and On-Ramps: Keeping Talented Women on the Road to Success (Harvard Business School Press, 2007).

In recent years, there has been significant controversy about highly-educated women who chose to leave the workforce. We have all read magazine stories or watched talk shows which – in turn -- either bemoan or celebrate a return to hearth and home. To date, this debate has yielded little in the way of new insight or solutions, at least in part because of the absence of hard data. No one seems to know the basic facts: how many highly qualified women opt out of the workforce? For how many years do they stay out? How many want to get back in? And what policies and practices might help them get back onto the career highway?

The Hidden Brain Drain Task Force was founded in 2004 by Sylvia Ann Hewlett from The Center for Work-Life Policy, Carolyn Buck Luce from Ernst & Young, and Cornel West from Princeton University to come up with answers. The Task Force is composed of 35 global corporations, representing over 2.5 million employees, operating in 152 countries around the world, and led by co-chairs from my firm, Booz Allen Hamilton, as well as Ernst & Young, General Electric, Goldman Sachs, Johnson & Johnson, Lehman Brothers, and Time Warner.

Together we have compiled rich data and developed noteworthy conclusions around policies and practices that better accommodate women’s nonlinear careers. This data and set of conclusions are not limited to any one particular company involved with the Task Force but rather are formed from a more expansive compilation from a series of leading global firms who participated in the work of the Task Force. The results of our research have been profound. Task Force companies have introduced 18 examples of innovative best practice models, many of them a validation and/or direct result of the research we have done together.

To give you a sense of the impact of this group, over the last two years the Harvard Business Review has published three pieces of Task Force research, “Off-Ramps and On-Ramps,” “Leadership in Your Midst” and "Extreme Jobs: The Dangerous Allure of the 70-Hour Workweek.”  These articles have struck both a chord and a nerve: media coverage has ranged from the Financial Times, Time magazine, International Herald Tribune, New York Times, and Business Week to appearances on The Today Show, CNN, ABC World News and the Wall Street Journal Report.

Off-Ramps and On-Ramps

Forty years after the women’s revolution transformed female opportunities, women’s work lives remain very different from men’s. Fully 60 percent of highly qualified women have nonlinear careers. By necessity or choice, they take off-ramps and side routes from the traditional career path and have a hard time maintaining continuous, cumulative, lockstep employment—which is a necessary condition for success within the confines of the linear white male competitive model. The end result: Despite a sea of change in the opportunities available to women, too many talented women prematurely leave their careers or fail to achieve their potential.

Two figures say it all: men constitute 95 percent of CEOs at Fortune 500 companies and 92 percent of top earners. Despite the fact that women today are highly credentialed (52 percent of law school graduates and 37 percent of business school graduates are female), they are not being promoted or advanced at a rate commensurate with their weight in the talent pool. Many women are stalled or sidelined during the early or midpoint stretches of the career highway. Few make it into the fast lane or get to the victory lap.

In 2004, the Hidden Brain Drain Task Force targeted this subject area and sponsored a national survey designed to map the trajectory of women’s work lives and a series of focus group. The survey, fielded by Harris Interactive, comprised a nationally representative sample of 2,443 highly qualified women and 653 men defined as those with a graduate or professional degree or a high-honors undergraduate degree. The survey research was supplemented by focus groups conducted within task force companies and other companies in similar sectors.

Why do women leave?

Our survey data showed that 37 percent of highly qualified women voluntarily leave their careers for a period of time. The amount of time spent out of the workforce is however surprisingly short, on average just 2.2 years. There’s no simple, one-size-fits-all explanation for why these women take time out. For most, career interruptions are the result of a complex interaction between “pull factors” (centered within the family) and “push factors” (centered around work).

For 45 percent of the women in our survey, a child-care challenge—specifically the need to devote more time to a baby or an older child—was the issue that triggered the off-ramping decision. Another 24 percent reported that an elder-care crisis was the trigger issue. These familial-based trends are even more exaggerated for African American women professionals who deal with a particularly challenging set of responsibilities. Many cope with a triple burden of care: nuclear family, extended family, and people in need within their communities. On average, African American women spend more hours per week on elder and extended family care than do white women (12.4 hours, compared with 9.5 hours for white women).

Still many women attribute factors other than familial obligations. Twenty-nine percent of women for example report taking an off-ramp primarily because their jobs are not satisfying or meaningful. The data shows that feeling underutilized or underappreciated is a more significant problem than overwork. Not being consulted or not getting a sought-after (and deserved) plum assignment can be much more difficult to contend with than dealing with additional responsibilities. (See Figure 1)

Figure 1. Why Do Women Leave?

Whether pulled or pushed, it is important to realize that only a relatively privileged group of women, those married to high-earning men, have the option of not working. Indeed, for a subset of women in the survey, the fact that they had a high-earning spouse was, in and of itself, an important trigger. Fully 32 percent of the women surveyed cite the fact that their spouses’ income “was sufficient for our family to live on” as a reason behind their decision to leave the workforce. Off ramping is not limited to women. Twenty-four percent of highly qualified men have left work for a period of time. The reasons for male off-ramping are very different. Men cite changing careers (29 percent) and obtaining additional training (25 percent) as the most important reasons for taking time out.

Scenic Routes

Off-ramps are conspicuous and tend to create waves—we are, after all, talking about highly skilled women quitting. But there are other ways in which women veer off the professional fast track. Some choose what the task force calls a “scenic route.” They don’t step out entirely; rather, they step back a bit—taking a part-time job, a flexible work arrangement, or a telecommuting option, or turning down a promotion, deciding that they cannot take on additional responsibility. Scenic routes seem to be as prevalent as off-ramps. Looking back at their careers, fully 36 percent of highly qualified women say they have worked part-time for some period of time as part of a strategy with which to balance work and personal life. In addition, 25 percent say that they have reduced the number of work hours within a full-time job, and 16 percent say they have declined a promotion (see figure 2). What’s more, a significant proportion (38 percent) say they have deliberately chosen a position with fewer responsibilities and lower compensation than they were qualified for, in order to fulfill responsibilities at home.

Figure 2. How Many Women take a Scenic Route

Another powerful theme that cropped up during our focus group discussions was the pervasiveness of stigma around alternative work arrangements. Across a range of sectors—in law firms, media companies, and investment banks—we found that women (and men) perceive many work-life policies (telecommuting, job sharing, reduced-hour or part-time jobs, etc.) as essentially “off-limits” at their company even if they were offered as official corporate policy.

Despite what we see on television and in movies, talented women who blithely throw their careers to the wind are the exception rather than the rule. The data shows that the overwhelming majority of highly qualified women currently off-ramped (93 percent) want to return to their careers, citing financial pressure and career satisfaction as the primary reasons.

Though the majority of off-ramped women have every intention of returning to the workforce, few understand how difficult doing so will be. While 93 percent of the women surveyed want to rejoin the ranks of the employed, only 74 percent manage to do so. And among these, only 40 percent return to full-time, mainstream jobs. Twenty-four percent end up taking part-time jobs, and another 9 percent become self-employed.

Penalties of Time Out

While the average time spent out of the work force for women is only 2.2 years, our data revealed that even these relatively short career interruptions engender heavy financial penalties. On average, women lose 18 percent of their earning power when they take an off-ramp. In the business and finance sectors penalties are especially draconian. Women’s earning power dips 28 percent when they take time out. As one might expect, the longer the period of time that’s spent out, the more severe the penalty becomes. Women lose a staggering 37 percent of their earning power when they spend three or more years out of the workforce (See figure 3).

Figure 3. The High Cost of Time Out

The Emergence of Extreme Jobs

Driven by globalization and facilitated by savvy—and continually improving—communication technology, work pressures are ratcheting up, and jobs, particularly high-level, well-paying jobs, are becoming more and more “extreme” in the words of the task force. In the spring of 2005 the task force fielded two surveys and conducted a series of focus groups to investigate the impact of the emerging extreme work model on women’s advancement.

Respondents are considered to have extreme jobs if they are well paid, work sixty hours or more per week, and have at least five of the following extreme job characteristics:

  • An unpredictable workflow
  • Fast pace/tight deadlines
  • Frequent work-related events outside regular hours
  • 24/7 client demands
  • P&L responsibility
  • Significant amounts of travel
  • Large numbers of direct reports
  • Heavy face time requirements (ten-plus hours a day)
  • Onerous mentoring/recruiting responsibilities

In our national data survey, we find that fully 21 percent of high-echelon workers have extreme jobs. In our global companies survey, this figure rises to 45 percent. These jobs are no longer limited to Wall Street and the Big City. Extreme jobs are spreading and are now all over the economy, in large manufacturing companies as well as in medicine and the law; in consulting, accounting, and the media as well as in financial services. They are prevalent on a global scale and are held by fifty-five-year-olds as well as thirty-five-year olds. Extreme jobs are not a young person’s game or a three- to five-year sprint anymore. Rather, they characterize the beginning, middle, and tail end of many careers.

What are the hot-button issues? First, there are the time pressures of extreme jobs. According to our data, 56 percent of extreme workers are on the job 70 hours a week or more, 25 percent are on the job more than 80 hours a week and 9 percent are on the job a mind numbing 100-plus hours a week. Spouses and partners also suffer from the extreme work model. Extreme workers dramatically underinvest in intimate relationships. Some of the data is quite startling. For example, at the end of a twelve-plus-hour working day, nearly half (45 percent) of all extreme workers in our global companies survey are too tired to say anything at all to their wife or husband or partner—they are literally “rendered speechless.”

So, are we heading for a cliff? Both men and women find it difficult to stay with their extreme jobs; 48 percent of men and 57 percent of women don’t want to continue working at this pace and with this intensity for more than a year. And only 24 percent (27 percent men, 13 percent women) expect to be working at this pace in five years. Our survey data tells us that flexible work arrangements create a possible solution. The wish list emanating from extreme workers shows that four out of six of their top needs or wants center on flexibility. For example, 71 percent of women currently working in an extreme job would like a flexible schedule within the framework of a full-time job, and 52 percent would like a flexible schedule within the framework of a reduced-hour job (see figure 4). Many men also want flexibility—49 percent want paid leave after periods of intensive work—as do 61 percent of women—and 45 percent of men want to work flexibly within a full-time job.

Figure 4. Extreme Workers Hungry for Help U.S Survey

The Business Cost

Why should companies be concerned with all this? For starters, the financial penalties of off-ramping are not limited to individuals. Companies also must deal with significant consequences when valued employees ramp off. The fact is, losing skilled personnel is enormously expensive. There are the direct costs of finding a replacement—advertising expenses, campus recruiting efforts, head-hunting fees, and the “opportunity cost” of time spent selecting and interviewing candidates. There are also significant indirect costs—the former employee’s lost leads and contacts, the new hire’s depressed productivity while getting up to speed, and the time coworkers spend guiding and training.

Both the American Bar Association and the American Society for Training and Development have crunched the numbers and found that the cost of replacing a professional is one and a half times the departing person’s yearly salary. Peter Hom, professor of management at Arizona State University’s W. P. Carey School of Business, estimates the cost of turnover ranges from 93 percent to 200 percent of the departing employee’s salary.

Despite the steep costs wrapped up in high rates of turnover, few firms seem to pay attention—only 40 percent of companies even keep tabs on turnover rates. Given this lack of interest, more powerful arguments lie in the realm of broad-gauged structural shifts. The fact is, cyclical and demographic factors are aligned in new and alarming ways—and these macro trends are beginning to force action. The upper-echelon labor market is heating up at a time when highly qualified white males are in short supply and talented noncitizens are being drawn back home by robust economic growth rates in Asia. Who, then, will fill the talent void? The best candidates are well-qualified women who have “got the goods” (in terms of credentials) and spare capacity.

Solution Models

Our June 2006 Hidden Brain Drain Summit—when change agent teams from 34 global companies gathered to share emerging practices—was an important milestone. There was a consensus on a core package of policies: six essential elements that need to gain some real traction if a company is to fully realize female talent over the long haul. There is a growing list of models at the cutting-edge—some of them directly inspired by our research— that can help a company get up and running. These models of best practice, described in Sylvia Ann Hewlett’s Off-Ramps and On-Ramps: Keeping Talented Women on the Road to Success (Harvard Business School Press, 2007), provide a road map for companies embarking on the journey.

1. Establish a Rich Menu of Flexible Work Arrangements

As our data suggests, reduced-hour options, flexible stop and start times, telecommuting, job sharing, and seasonal flexibility—time off in the summer, balanced by long hours in the winter—are among the policies and practices women yearn for. Task force companies such as BT Group, Citigroup, and Ernst & Young present a multitude of creative ways of reimagining when, where, and how work is done.

At Booz Allen, we have had a formal part-time policy in place since 1994. We recently re-issued the policy with more standard operating procedures and processes for our commercial sector because frankly, it needed more specificity and it needed to be championed from leadership as a feasible and firm-sanctioned career option. The Alternative Career Models Task Force, part of our Women’s Leadership Initiative, issued a toolkit as part of this campaign and we have been straightforward on what success looks like plus a wider range of work-life management options along with a comprehensive set of career management guidelines--for the employee and the manager. We’ve also recommitted to our telecommuting policies, and have started measuring how often people work from home to ensure our infrastructure is adequately sized and supportive of telecommuting.

2. Create a “Arc” of Career Flexibility

Flexible work arrangements provide flexibility in the here and now—over the course of a day, a week, a year. But a related set of policies are enormously important to women: policies that provide flexibility over the arc of a career and allow a woman to ramp up after having taken time out of the paid workforce. These initiatives are quite new. Indeed, initiatives taken by Task Force Companies Booz Allen Hamilton, Goldman Sachs, and Lehman Brothers got off the ground in 2005 and 2006 as a response to the “Off-Ramps and On-Ramps” survey data and are still in the early stages. At Booz Allen, we reached out to 148 alumni and hired 99 of them into a new Adjunct program. This program is designed to provide part-time, high-impact contract work for women who had chosen to ramp down their professional commitments. The idea is to keep high-performing women who otherwise would quit, in the loop, so that when the time comes to ramp up, they will do so at Booz Allen and not go to work somewhere else. The result is the creation of a highly flexible labor pool composed of current and former employees.

Understanding the business cost of losing employees was a key driver in the creation of the career flex adjunct program. Delivering excellence requires continuity in the client-consultant relationship—which underscores the importance of retention. Retaining an experienced cadre of talented consultants is thus crucial. When an employee walks out the door of a consulting firm, it is analogous to losing an entire product line. That’s not smart business.

3. Reimagine Work Life

For many years, the best benefits—and finest support programs—within large corporations have gone to a specific demographic: employees who are married with young children. This doesn’t work for half of all women. As we discovered a large proportion of highly qualified women are childless—and almost as many are single. But if these women don’t have two-year-olds, they do (or will) have serious elder-care and extended-family responsibilities. The data shows that a significant number of women are forced to off-ramp because of an elder-care crisis. Task force members such as Citigroup, Johnson & Johnson, and Time Warner, are beginning to honor and support the work-life challenges that go beyond biological children and the nuclear family.

I believe that companies need policies and procedures to help women but they also need a mindset. It’s a mindset of flexibility. At Booz Allen, we work hard. We are in a very competitive business. We also work hard at being flexible, so that if people need to take time off for care of younger or elder loved ones, we can be supportive. The loyalty we get in return is impressive; it’s the right thing for employees and the right thing for the business.

4. Help Women Claim and Sustain Ambition

Confounded by the escalating pressures of extreme jobs and penalized for taking an off-ramp or a scenic route, many talented women downsize their expectations for themselves. This is a huge issue. An employer cannot promote a woman if she herself is not enormously vested in this endeavor. The case studies taking place at General Electric, Johnson & Johnson, and Time Warner demonstrate how ambition can be sparked and rekindled through women’s networks and other leadership initiatives.

5. Harness Altruism

Financial compensation is important to women, but it’s not nearly as important a motivator as it is for men. The data shows that while men list money as either the first or second priority on their wish list, women tend to rank this goal much further down on their list of career drivers. Career goals such as working with “high-quality colleagues,” deriving “meaning and purpose” from work, and “giving back to society” tend to be top priorities for women. Case studies showcased by American Express, Cisco, and Goldman Sachs demonstrate that recognizing and rewarding altruism gives an important lift to women’s careers and cements loyalty to a company.

6. Reduce Stigma and Stereotypes

In many corporate environments, flexible work arrangements and other work-life policies and programs are heavily stigmatized, either because of overt disapproval (a manager says quite openly that telecommuting will hurt a career) or because of subtler cues and stereotypes in the corporate environment (i.e., someone who has taken a reduced-hour schedule is simply never considered for promotion). Naturally, this has a dampening effect on the utilization of programs intended to promote flexibility. In focus groups, we found that women—often high-performing, ambitious women—routinely quit rather than take advantage of flexible work arrangement options that were on the books but had become stigmatized. Case studies featured at Cisco, Ernst & Young, and Lehman Brothers show how companies are beginning to battle stigma and stereotypes head-on—and in so doing are kick-starting the process of transforming corporate culture.

For the first time at Booz Allen, we are now measuring management’s ability to manage work life balance because it is an important asset to the firm. The expression that you get the behavior you measure and reward certainly applies here. In the part-time toolkit I mentioned earlier, we were up front about perceived organizational bias regarding part-time work arrangements and the incremental changes that are required to make things happen.

Conclusion

The current model of “work” is at a turning point. If the Hidden Brain Drain Task Force is a measure, the private sector is ready to take innovative action and make the workplace an environment where rich, complex lives can flourish. And this action comes just in time. With jobs and careers becoming more extreme by the minute, rethinking the old model has huge potential to burnish our companies’ competitive edge and restore hope and greater productivity to women’s lives.

This page was last modified on May 23, 2007.