A new study by McKinsey Digital reveals that Europe could solve its talent gap if more women chose to work in tech. By doubling the share of women in tech would also mean a large GDP increase.
By 2027, European companies risk a gap of nearly four million employees with tech skills. The growing demand cannot be met with the current recruitment base, which has a predominance of men. European leaders thus need to recruit and retain women for tech roles to stay competitive.
“Europe faces tech talent and competitiveness, and women can help European tech to solve its talent challenge. To do so, Europe’s tech companies must diversify their talent pool by investing in and attracting historically underutilized talent, notably women. We can strengthen our competitive advantage by diversifying Europe's tech jobs,” says Elina Mäkelä, Associate at McKinsey Helsinki office and one of the authors of the study.
While the rate of women in tech companies is closer to parity, the rate of women working in tech roles is much lower. To understand why Europe struggles to find and retain tech-talented women, McKinsey analyzed EU countries employment and education statistics.
Education is a gatekeeper for girls and women
“For the first time we have been able to take an in-depth look at the full pipeline from education and workforce. Already in education we see something striking: we find a major drop-off point at the end of secondary education. In Finland, very few women choose to study STEM (science, technology, engineering, mathematics), where the share of women is 27% and thus below the EU average,” says Elina Mäkelä.
The uneven development is primarily fueled by stereotypes and society’s misperceptions about girls’ STEM abilities vs boys. Research suggests that girls are assumed to have lower STEM skills than boys do. Combined with the influence of general stereotypes and the lack of women role models, such preconceptions can create higher expectations for girls and women.
Share of women in tech drops as graduates enter workforce
After graduation, only 23% of women STEM majors end up in tech roles, compared with 44% of men. The distribution of women in specific tech roles across all companies varies significantly. Women for example represent 46% product design and management roles. However, the lowest share of women is found in the most in-demand roles, like DevOps and cloud roles, with only 8%. “With these high-demand roles growing rapidly, we estimate the share of women in tech declining to only 21% in 2027 – European companies must act now,” says Elina Mäkelä.
The picture is somewhat more positive at tech companies, where 37% of employees are women. In social network companies, the share of women is the highest – 50% of the entire workforce. However, the general pattern remains, as only one in four tech roles at tech companies is filled by a woman.
Four measures can help reach gender balance
The lack of a diverse talent pool within the most growing and important industry (tech) is a societal and ethical issue, but there is also huge value at stake. By doubling its share of women from 22% to around 45%, Europe could increase its GDP by 260-600 billion EUR by 2027.
“For the first time, we were able to quantitatively size the impact of initiatives to get more women into tech, and truly get an understanding of how we can reach this scenario. To increase the number of women in tech by up to 3.9 million and reach an acceptable gender split in European tech by 2027, we identified four measures that can have a significant impact,” says Elina Mäkelä.
- Reframe: Introduce measures to redress bias in the workforce
- Retain: Improve retention rates by reducing isolation and improving sponsorship and support networks
- Redeploy: Focus on reskilling women into tech roles via skills adjacencies and tapping into unconventional talent pools
- Ramp up: Bolster girls in STEM classes earlier in their educational process to address STEM drop-off in university.
Source: McKinsey & Company