Beyond The Broken Rung How Organizations Can Build Experience Capital For Women

By Staff Writer | Published: April 25, 2025 | Category: Career Advancement

The "broken rung" at the first management level is holding women back more than the glass ceiling. Here's why it matters.

Beyond the Broken Rung: How Organizations Can Build Experience Capital for Women

Women enter the workforce with impressive credentials - representing 56 percent of college graduates in the US and UK - yet something profound happens when they transition from education to employment. Their career trajectories diverge significantly from their male counterparts, beginning with what McKinsey researchers call "the broken rung" - the critical first step to management where women fall behind men at alarming rates.

In their new book, "The Broken Rung: When the Career Ladder Breaks for Women—and How They Can Succeed in Spite of It," McKinsey senior partners Kweilin Ellingrud, Lareina Yee, and María del Mar Martínez tackle this phenomenon head-on. Their research reveals that while women represent 48 percent of entry-level employees in North America, they account for only 39 percent of manager positions - a nine percentage point drop at this crucial first promotion.

This isn't merely about individual career trajectories. The broken rung represents a systemic failure with profound economic implications. Organizations are losing valuable talent and limiting their leadership diversity precisely when diverse perspectives are most needed for innovation and growth. For business leaders, addressing the broken rung isn't just about equality - it's about organizational resilience, innovation capacity, and economic performance.

The Experience Capital Gap: More Than Just a Promotion Problem

Perhaps the book's most compelling framework is the concept of "experience capital" - the skills, wisdom, and on-the-job learning that accounts for approximately half of lifetime earnings. Women are systematically building less of this capital and receiving less compensation for what they do build, creating compounding disadvantages throughout their careers.

This experience capital gap manifests in the phenomenon of "doubling points" - the time it takes to double initial salary. Men typically reach this milestone faster, creating a widening earnings gap that extends into retirement. The implications extend beyond individual careers to organizational effectiveness and economic growth.

Global consultancy Mercer's research supports this concept, finding that companies in the top quartile for gender diversity are 21% more likely to experience above-average profitability. Their analysis suggests that closing the experience capital gap could add $12 trillion to global GDP by 2025. The economic case for addressing the broken rung is clear and compelling.

What's particularly valuable about the experience capital framework is that it provides a tangible, measurable approach to understanding gender gaps in professional advancement. Rather than abstract discussions of bias or culture, it focuses attention on specific, addressable factors:

This framing transforms gender equity from a compliance issue to a strategic talent development imperative - a shift that resonates more effectively with business leaders.

The Bias Barrier: Recognizing Unseen Obstacles

The authors' research on bias provides stunning evidence of how seemingly objective evaluation processes are often anything but. When identical resumes are evaluated with only the name changed (John vs. Jane), men are rated as having higher leadership potential. If Jane's resume indicates she's a parent, her likelihood of getting the interview drops by 87 percent.

Similarly shocking disparities exist for racial bias, with candidates with African American or Muslim names facing significant disadvantages regardless of identical qualifications. The research convincingly shows that bias isn't an abstract concept but a measurable phenomenon with profound career implications.

Some critics might suggest these experimental results don't reflect real-world hiring processes, which typically involve multiple stages and decision-makers. However, recent field research from the National Bureau of Economic Research found similar patterns in actual hiring scenarios, with callbacks for interviews showing statistically significant disadvantages for women and minority candidates even with equivalent qualifications.

Where the authors make their most valuable contribution is in detailing how organizations can systematically counter these biases. Rather than relying solely on implicit bias training (which shows mixed effectiveness in research), they advocate for structural interventions in hiring and promotion processes:

Global technology company IBM has implemented many of these approaches, focusing particularly on skills-based assessments rather than credential-based hiring. Their internal research shows this has significantly increased gender diversity at both entry and management levels, with female technical hires increasing by 40% over three years.

The Motherhood Challenge: Rethinking Career Trajectories

The authors' discussion of motherhood provides a refreshingly nuanced perspective on what's often portrayed as a binary choice between career ambition and parenting. They acknowledge the very real "motherhood penalty" - the documented phenomenon where mothers earn less with each child while fathers often receive a "fatherhood bonus."

What's particularly insightful is their reframing of motherhood as a source of valuable skills that actually enhance leadership capabilities: crisis management, multitasking, empathy, strategic prioritization, and emotional intelligence. Rather than viewing motherhood as a career interruption, they suggest organizations should recognize it as leadership development in action.

This perspective aligns with research from the Center for Creative Leadership, which found that parents rated significantly higher on patience, multitasking, active listening, and crisis management skills compared to non-parents. These are precisely the competencies organizations increasingly value in modern collaborative work environments.

The authors' concept of "round-trip tickets" - comprehensive approaches to supporting women before, during, and after parental leave - represents a practical framework for organizations. Companies like Patagonia have demonstrated the business value of this approach, with 100% of mothers returning after parental leave and 97% remaining with the company after five years, dramatically reducing recruiting and training costs.

Critically, the authors acknowledge that addressing the motherhood penalty requires both individual and organizational strategies. Women benefit from strategic planning around parental leave, but organizations must create cultures and policies that normalize parental responsibilities for all genders and provide structural support for working parents.

The Health Dimension: Recognizing Physical Realities

The inclusion of women's health considerations represents one of the book's most distinctive contributions to the leadership literature. Their research reveals that women spend 25% more years in poor health than men, with most health challenges occurring during peak working years.

Particularly significant is their discussion of menopause, which typically coincides with the career stage when women should be advancing to senior leadership positions. The authors estimate that menopause-related productivity losses cost the global economy approximately $150 billion annually - a staggering figure that receives little attention in most management discussions.

Financial services company Blackrock has recognized this issue and implemented comprehensive menopause support programs, including flexible work arrangements, specialized healthcare coverage, and education for managers. They report significant improvements in retention of senior women and have calculated a positive ROI from reduced turnover costs alone.

The health perspective adds an essential dimension to understanding women's career progression, moving beyond simplistic assertions about personal choices to acknowledge biological realities that organizations must address. This isn't about special accommodation but about removing barriers to full participation and contribution.

Redefining Leadership: Beyond Narrow Constraints

Perhaps most fundamentally, the authors challenge narrow definitions of leadership that privilege traditionally masculine characteristics while undervaluing equally effective but different leadership approaches. As Salesforce CEO Amy Weaver notes in the book, "the courage to bring your authentic self" to leadership roles remains challenging when success models remain narrowly defined.

The organizational implications are significant. Research from McKinsey and others consistently shows that leadership teams with diverse styles and approaches make better decisions, avoid groupthink, and identify opportunities and risks more effectively. Yet promotion systems often reward conformity to established leadership norms rather than valuing diverse approaches.

Microsoft provides an instructive case study in broadening leadership definitions. Under CEO Satya Nadella, the company explicitly shifted from valuing "know-it-alls" to "learn-it-alls," emphasizing growth mindset, collaborative leadership, and empathy alongside traditional metrics of performance. This shift coincided with significantly improved performance measures, including stock performance, innovation metrics, and employee satisfaction.

This redefinition has particular significance for women navigating the broken rung. When organizations expand their conception of what effective leadership looks like, they create space for diverse talents to advance based on results rather than conformity to traditional leadership stereotypes.

Practical Strategies for Organizations

While the book focuses primarily on strategies for individual women navigating their careers, my perspective is that addressing the broken rung requires systematic organizational approaches. Based on the authors' research and successful case studies, several strategies emerge as particularly effective:

1. Skills-Based Hiring and Promotion

Moving from credential-based to skills-based evaluation fundamentally changes who gets hired and promoted. Organizations should:

Accenture has moved to skills-based hiring with remarkable results, finding that focusing on capabilities rather than credentials has increased gender diversity while also improving performance metrics for new hires.

2. Experience Capital Development Programs

Organizations can systematically build experience capital for women through:

Deloitte's sponsorship program requires partners to sponsor at least two high-potential women, with specific guidelines for development opportunities they must provide. The firm has seen management-level gender parity improve by 15 percentage points since implementing the program.

3. Bias Interruption Systems

Rather than just raising awareness of bias, organizations need systems to actively interrupt it:

American Express implemented a "decision scorecard" for promotions that requires evaluating candidates on specific competencies before discussion, reducing the impact of intuitive "gut feeling" assessments that often disadvantage women.

4. Comprehensive Parental Support

The "round-trip ticket" approach requires comprehensive support:

Bank of America found that equalizing parental leave benefits for all genders increased men's leave-taking by 30%, creating a more balanced culture around parenting responsibilities while improving retention of women.

5. Health and Well-being Integration

Addressing women's health requires organizational commitment:

UK law firm Eversheds Sutherland implemented a comprehensive menopause support program, reducing turnover among senior women by 20% and calculating a 300% ROI based on retention savings alone.

The Road Ahead: From Individual Navigation to Systemic Change

While the book provides valuable guidance for individual women navigating the broken rung, addressing this challenge at scale requires coordinated action from multiple stakeholders:

Business Leaders

Business leaders must recognize the broken rung as a strategic business issue, not just a diversity initiative. High-performing organizations are increasingly focusing on early-career advancement for women, recognizing that fixing the talent pipeline at its first critical transition yields benefits throughout the organization.

Managers

Frontline managers make the daily decisions that either perpetuate or break the cycle of disadvantage. Organizations should equip managers with specific tools for developing talent equitably, including structured evaluation processes, sponsorship skills, and bias interruption training.

Policy Makers

Broader policy interventions can create enabling environments for women's advancement, including affordable childcare, paid family leave, and healthcare policies that address women's specific needs. Organizations benefit from advocating for these policies as part of their talent strategy.

Educational Institutions

Colleges and universities can better prepare women for the broken rung by focusing on skills signaling, negotiation training, and strategic career planning. Partnership between educational institutions and employers can smooth the transition from academic to professional environments.

Conclusion: The Broken Rung as Opportunity

The broken rung represents both a critical challenge and a significant opportunity. Organizations that effectively address this first step on the leadership ladder gain access to a broader talent pool, diverse leadership perspectives, and improved decision-making capabilities.

Most importantly, addressing the broken rung isn't just about advancing individual women - it's about creating organizations equipped to navigate complex, rapidly changing business environments. The skills, perspectives, and leadership approaches that women bring are increasingly essential for organizational resilience and innovation.

As we navigate increasingly uncertain business conditions, fixing the broken rung isn't just the right thing to do - it's a strategic imperative. Organizations that master the development of experience capital across diverse talent pools will have a decisive advantage in attracting, developing, and retaining the leadership capabilities required for sustainable success.

Rather than viewing the broken rung as simply a women's issue, forward-thinking organizations recognize it as a critical leverage point for building the adaptive, innovative leadership needed to thrive amid accelerating change. The question isn't whether organizations can afford to address the broken rung - it's whether they can afford not to.

To explore further on how women can tackle the broken rung and advance their careers, you can visit this detailed discussion by McKinsey.