Women in tech: The best bet to solve Europes talent shortage by McKinsey and Company

To remain competitive in technological growth and innovation, Europe must recruit and retain women for the fastest-growing tech roles of the foreseeable future.

European leaders looking to build competitive advantage and growth by addressing their technology gap should consider one fact: women1 occupy only 22 percent of all tech roles across European companies.2 That’s a stunning statistic at a time when technology underpins so much of the innovation and growth in the world today.

Addressing this shortfall is about much more than doing the right thing; it’s an economic necessity. While the spate of tech layoffs in the face of economic uncertainties ahead has caused companies to rethink their talent strategies, only 7 percent of the layoffs have been in Europe, according to the State of European tech report for 2022,3 and the underlying economic fundamentals that rely on tech talent remain in place. In fact, McKinsey analysis shows a tech talent gap of 1.4 million to 3.9 million people by 2027 for EU-27 countries.4 If Europe could double the share of women in the tech workforce to about 45 percent, or an estimated 3.9 million additional women by 2027—something we believe is possible—it could close this talent gap and benefit from a GDP increase of as much as €260 billion to €600 billion.5
To better understand why Europe struggles to find and retain tech-talented women, and to determine how best to address the issue, we undertook a detailed analysis of the entire development funnel in Europe, from primary school all the way to entering the workforce (see sidebar, “About the research”). The analysis produced some interesting insights:

• A significant drop in the percentage of women in STEM (science, technology, engineering, and math) classes happens at two points: during the transition from primary and secondary education to university, when it drops 18 percentage points, and during the transition from university to the workforce, when it drops another 15.
• While the rate of women working within tech companies (such as social networks) is closer to parity, the rate of women working within tech roles (such as developers and data engineers) is much lower.
• The problem is likely to get worse. Women’s graduation rate in STEM disciplines during higher education is declining.6 Furthermore, the share of women in the workforce is lowest in the tech roles that are growing fastest, such as DevOps and cloud. At current rates, the share of women in tech roles in Europe is heading toward a decline to 21 percent by 2027.

There are two major drop-off points for women in European tech: at the end of secondary education and at workforce entrance

A closer look: First drop-off—from primary and secondary education to university

During primary and secondary education, there are no indications that girls lag behind boys in STEM classes. In fact, in Bulgaria, Finland, Latvia, and Sweden, girls slightly outperform boys in science and math tests.7

Despite this fact, there’s an 18-percentage-point drop in girls going into STEM disciplines when they go to university. The drop is even more dramatic—31 percentage points—when analyzing young women going into ICT disciplines (ICT is a subsegment of STEM that focuses on information science, computer science, and technology, fields that more closely match education requirements for those going into tech roles) (Exhibit 2). Worse, trend lines showed a small but steady decline of one to two percentage points in women STEM graduates from 2016–20. This is all the more discouraging because in some STEM disciplines, such as natural science, we are almost reaching gender parity.

Women’s participation in ICT disciplines, a core element of STEM and fundamental for tech, drops drastically in tertiary education

There are two main reasons for these drop-offs. The first is that secondary-school girls get significantly less teacher, parental, and peer support than boys do for pursuing STEM careers.8 Second, some research suggests that girls are told that they aren’t good at STEM, often communicated in subtle but debilitating behaviors, such as teachers in STEM classes calling on boys more than girls.9

This drop-off has the potential to create a self-fulfilling downward cycle. With only 19 percent of ICT bachelor students being women, the resulting isolation is often another reason women drop out of these classes.10 The silver lining in the data is that women’s graduation rates are on par with or slightly higher than men’s, suggesting that women who choose these disciplines are more likely than men to stick with them over the course of their higher education.

A closer look: Second drop-off—from university to the workforce

Across multiple industries, the data shows another dispiriting and significant drop-off in the percentage of women who transition into tech roles after graduation. Only 23 percent of women STEM majors end up in tech roles, compared with 44 percent of men.11

The distribution of women in specific tech roles across all companies also varies significantly (Exhibit 3). Their greatest participation rate as a percentage of available roles is in product design and management (46 percent) and in data engineering, science, and analytics (30 percent). Their lowest participation rates are in DevOps and cloud roles (8 percent) and compute and operations roles (15 percent).

The way forward: Four interventions

• Reframe: Enable women in tech to thrive at work
• Retain: Give women a reason to stay in tech
• Redeploy: Ensure women are in tech roles that matter
• Ramp up: Address STEM drop-off in university

Women can fix European tech’s talent challenge, but only if and when companies address the issues that keep more women from joining and staying in the tech workforce can Europe hope to build its competitive edge.

Article written by McKinsey & Company – read the full article here