More women in tech can solve Europe's talent shortage

Europe's biggest bet to stay competitive in technical advancement and innovation is to hire and retain more women in tech jobs expected to grow the fastest in the near future. In order to close the technological gap and gain a competitive edge, European leaders must consider that women hold only 22% of all tech positions in European businesses. At a time when technology drives so much innovation and expansion in the world today, that is a startling statistic from McKinsey.

More than just doing the right thing, filling this gap is necessary from an economic standpoint. Only 7% of the layoffs in Europe, according to Atomico's  State of European Tech Report for 2022, and the underlying economic fundamentals that depend on tech talent remain in place, despite the spate of tech layoffs that have prompted businesses to rethink their talent strategies in the face of economic uncertainties ahead. According to McKinsey research, the EU-27 countries will have a digital skills gap of 1.4 million to 3.9 million people by 2027. Europe can close the talent gap and see a GDP rise of between €260 billion and €600 billion if it can double the proportion of women in the tech workforce to roughly 45 percent, or an estimated 3.9 million additional women, by 2027.

An analysis by McKinsey to better understand why Europe fails to attract and retain tech-talented women and to establish the best way to solve the issue yielded some intriguing insights:

Women's participation in STEM (science, technology, engineering, and math) fields significantly declines at two points: the transition from primary and secondary education to college, when it declines by 18 percentage points, and the transition from college to the workforce when it declines by another 15 percentage points.

While the proportion of women working in tech-related businesses (like social networks) is approaching parity, the proportion of women working in tech-related occupations (like developers and data engineers) is far lower.

In higher education, the proportion of women graduating in STEM fields is dropping. In addition, the tech jobs with the biggest growth, including DevOps and cloud, have the lowest percentage of female employees. If current trends continue, the proportion of women working in IT in Europe will drop to 21% by 2027.

Women's decreasing role in tech is a challenging issue to resolve. There aren't any miraculous solutions, but four interventions—addressing workplace sexism, raising retention rates, retraining women for digital jobs, and encouraging girls to take STEM subjects earlier in their education—can make a big difference.

Enabling women to thrive in tech

According to McKinsey, companies can raise the number of women in tech roles by 480,000 to one million by ensuring that businesses and men in positions of influence give women the assistance they need to succeed in today's digital economy.

Companies should start with a thorough strategy that actively considers women's requirements and problems. Almost 70% of tech-related women still believe that, due to their gender, they must work more and demonstrate their worth. Making sure several women are working in the same place can assist in lessening the isolation of women in tech roles, as can establishing larger support networks, kind HR practices, and efficient sponsorship. Active sponsorship—often from men—in the form of promoting women and providing access to sponsors' networks enhances the likelihood that women's ideas will be heard by 70% and implemented by 200 percent.

Enhancing workplace flexibility can have a significant impact on meeting women's demands as well. Almost one in four women mention a lack of work-life balance as a major factor for leaving tech employment, and 7% of European women (compared to 5% of males) are out of the workforce due to domestic caregiving responsibilities. For instance, offering flexible work schedules, on-site childcare, and remote or hybrid working options can have a significant impact. According to one European entertainment company, a "work from anywhere," strategy reduced attrition rates by 15% and boosted the proportion of women in leadership positions from 25% to 42%.

Making the tech industry appealing to women

Since women leave the tech sector at a rate more than twice as high as males do by the halfway point of their careers, there are far fewer women in leadership positions. According to a McKinsey report, European businesses could double the proportion of women in tech by 370,000 to 440,000 by boosting retention rates.

According to research, women give two main justifications for leaving. First, businesses need to offer them strong management support or worthwhile chances. This problem is highlighted by recent research by the Integrating Women Leaders Foundation, which found that while executive men believe they are active allies for gender equality in their organizations, 55 percent of executive women disagree with that.

Though resolving this issue is complicated, creating efficient diversity, equity, and inclusion (DEI) policies and integrating them into regular corporate operations is crucial. These practices should include strong assessment and measurement programs and accountability. This includes, for instance, incorporating retention targets for women into managers' performance appraisals and incorporating KPIs for retaining women talent into the overall talent dashboard that leaders utilize.

The second problem is that women who want to work in better tech positions frequently think they need to switch employers. This is part of a larger trend: According to McKinsey data, changing employers accounts for more than 80% of role shifts, demonstrating that most employees choose this path when looking to advance their careers. While there are many reasons employees change jobs, organizations may retain more women by providing flexible career paths and actively encouraging women to pursue new digital careers.

Employing women for rising tech roles

Through various strategies, organizations may raise the number of women in tech roles by up to 530,000 to 1.8 million by 2027. These include recruiting women from underrepresented groups, educating them about cutting-edge technologies (including agile and MLOps), and enhancing their tech skills.

The greatest value is not in the number of people who make the change, even though this hiring goal represents the highest potential in terms of sheer numbers. In reality, many women work in tech jobs that are rapidly diminishing, such as systems administrators and programmer analysts, which the latest waves of tech layoffs have disproportionately impacted. Product leaders, machine learning engineers, and AI specialists are a few tech positions businesses should concentrate on hiring and training women.

Companies might take a cue from the tech industry, where over 44% of women working in tech roles have degrees in fields other than STEM and are self-taught.

The full potential of redeployment comes from three groups comprising 270,000-850,000 women. The first is European women with STEM degrees who work in nontech professions but possess the most in-demand tech abilities, such as SQL and Python (39 percent of this group). The second is European women who work in nontech positions but also have these in-demand tech talents (3 percent of this much larger group). The third group consists of European women who possess complementary tech abilities to those in high demand, such as complementary skills like C++, Java, and Linux for top-rising talents like Python.

With an apprenticeship program, one top big-tech business is utilizing this potential to reskill and upskill previously underutilized talent pools, such as single stay-at-home mothers. The business has hired 98 percent of the women in its cohorts from North America and Africa by mixing classroom instruction with practical engineering tasks.

Addressing STEM drop-offs

The data indicates that while encouraging more women to be major in STEM fields is a noble goal, it won't make much difference. Even if nations could boost the number of girls enrolling in STEM university classes by 1% (about 300,000 women), that would result in just around 15,000 more women assuming tech roles until 2027, given the present drop-off rates across bachelor's degree programs.

Programs assisting women enrolled in university STEM courses have the most potential to affect change. Programs like expanding and improving internship opportunities, coaching and mentoring women as they get ready to enter the workforce, and actively seeking out women to work on cutting-edge projects in leadership roles can help increase the graduation rates for women in STEM and boost their overall numbers in tech by between 225,000 and 695,000. Long-term solutions for the broken STEM rung in women's tech career ladder must also address the earlier drop-offs in primary and secondary education.