How the Pandemic Affected Women in the Workplace

working mother on phone with child next to her

"The corporate sector has to find a way to entice women back into the workforce and make the transition as easy as possible. They can't expect women workers to flip a switch and get right back into it, especially if their kids aren't yet in school." - Nela Richardson, Chief Economist at ADP

When the COVID-19 pandemic hit, it impacted millions of jobs. What was unique about this recession is that its impact was not evenly spread out and some groups — notably, women — took a much bigger hit than others.

In our third monthly Q&A, Nela Richardson, Chief Economist at ADP, speaks with us about how the pandemic affected women in the workplace and how business leaders can help address related challenges.

Q. What are the trends we've seen over the past year, and is there anything that isn't being talked about enough for how the pandemic affected women?

Richardson: "I think it bears highlighting that women lost jobs at four times the rate of men last fall as schools across the country closed or reduced in-person learning. It's a very different scenario than the past recession when job losses were more equally spread. There are a few reasons why.

First, women have been overrepresented in the hardest hit sectors like hospitality, travel and healthcare and in low paying service occupations. While it might be surprising to hear that healthcare faced job losses, there have been a lot of services postponed, like dental and nonessential elective surgeries.

Women also had to stay at home to take on new family responsibilities as daycare centers and schools closed during the pandemic. I recently ran into a teacher from a nearby private school, and she said she reduced her hours to part-time because remote classes double the amount of work.

Pre-pandemic, this was already an issue: We were seeing a decline in workforce participation from women with children, while job gains came from single women without children. The pandemic just accelerated this trend."

Above: Nela Richardson in MainStreet Macro: The March Reset

Q. What lessons should business leaders have learned from this?

Richardson: "There are some lessons companies and workers have learned during this pandemic environment. Companies have seen that they can have a bunch of people work remotely and still be productive. They'll need to weigh that against their company culture and also decide whether it's sustainable. The pride and joy of remote work might wane, and the high level of productivity may end.

Workers also learned that their company could support a lifestyle that they didn't know was available for them. They might demand more flexibility with work hours and location even after the pandemic. The corporate sector has to find a way to entice women back into the workforce and make the transition as easy as possible. They can't expect women workers to flip a switch and get right back into it, especially if their kids aren't yet in school.

Employers should also keep the type of workers and their market in mind. Overall, unemployment is about 6%. However, at the top quartile of workers, unemployment is just 4% whereas it's 17% for the bottom quartile, where women and minorities are overrepresented. The jobs in the bottom had the steepest decline. These are the ones with the longest road ahead for getting back to normal. It's crucial for employers to help with this transition back to work."

Q. What are the potential hurdles now that the pandemic is slowly ending?

Richardson: "We're approaching the one-year anniversary of the steepest job loss in history, with 22 million jobs erased in March and April of last year. It was 10 years of expansion wiped out in 2 months. In May and June, we saw the economy bring back 7.5 million of those jobs but since then, we've only added another 2.5 million. It was a summer surge followed by a slow increase.

At the current rate, it will take more than two years to get back to the same number of jobs pre-pandemic, according to the CBO, and four years before the employment rate is back to normal. We need even more jobs than what we had in 2020 due to more people graduating from college, and more people in the workforce.

It's a race against time. The longer people stay out of the workforce, the longer it takes them to get back in, while their skills decrease at the same time. That's what happens with women out of the workforce.

MainStreet Macro

Q. How can business leaders address these challenges and support their workforce?

Richardson: "I think businesses have to be very aware of who comes back into the office and who does not. Decide what's best for your organization in terms of remote work but make sure that policies around paid promotion, stretch work assignments, and bonus are well-known so employees know what tradeoffs they're making when they take on remote work and more flexible hours. Be careful it doesn't turn into a situation where people can say, 'Everyone is equal, but people who come to the office get all the promotions.'

Business leaders should also focus on helping women and other hard-hit groups transition back into the world of work. Given that all the new responsibilities from COVID might not end as soon as COVID goes away, these workers could need a transition period to adapt from remote back to employed in the office or from unemployed to employed.

What that transition period looks like will be company specific. It could be fewer days and hours in the workplace. It could be more flexible hours. Whatever approach you take, know that going immediately from 100% at home to 100% in the office won't work for most people.

As for bringing unemployed workers back, they will also need a hospitable environment. Skill retooling will be huge going forward as well as just onboarding in general to get workers back to speed. If workers weren't forced out of the job market but left due to new responsibilities, how can you support them as they still handle those new responsibilities while returning to part-time work?"

For more job market insights from Richardson, be sure to check out her Main Street Macro blog as well as her recent interview on the Cheddar financial news network. You can also read the first two installments of this series here:

The Post-Pandemic Labor Market — What Changes Are In Store?

The Puzzle of Productivity and Wage Growth During the COVID-19 Recession

Nela Richardson, ADP Chief Economist

Nela Richardson joined ADP as Chief Economist in November of 2020. Nela is the co-head of the ADP Research Institute and leads economic research for ADP. Previously she was Principal and Investment Strategist at Edward Jones, a financial services firm. In that role, Nela analyzed and interpreted economic trends and financial market conditions and recommended investment strategies. Nela is also the former chief economist at Redfin Corp., a national real estate brokerage and technology company, where she led a team of data scientists, economists and writers to track trends in the housing market. Nela also served as a senior economist for Bloomberg, L.P., covering housing and financial markets, and has held research positions at the Commodity Futures Trading Commission (CFTC), Harvard University's Joint Center for Housing Studies and Freddie Mac. She also worked as an adjunct finance professor at the Carey School of Business at John Hopkins University.

Nela earned a doctorate in economics from the University of Maryland-College Park with concentrations in financial economics, international finance and economic development. She obtained a master's degree in economics from the University of Pennsylvania and a bachelor's degree from Indiana University in Bloomington, where she was a triple major in mathematics, economics and philosophy.