Despite years of inclusion initiatives, the statistics for women in the workforce today are bleak. “At the entry level in the United States and around the world, for every 100 men who are promoted, there are 89 white women, but only 64 Latina women and 54 Black women,” said  Kweilin Ellingrud, senior partner, director of McKinsey Global Institute, and head of diversity and inclusion at McKinsey & Company.

Ellingrud, also the co-author of The Broken Rung: When the Career Ladder Breaks for Women—and How They Can Succeed in Spite of It, spoke during a fireside chat at From Day One’s Minneapolis conference. Since about 70% of employees across the talent pipeline are entry level, and 48% of them are women, this “broken rung” along the career ladder leads to a major disparity in representation among leadership roles. 

Her new book, based on extensive research, identifies the broken rung as more pervasive than the glass ceiling in holding back women from career success. Ellingrud reveals the problem’s underlying cause and where the solution lies: women need to build their “experience capital” to level the playing field and maximize their earning potential—and employers need to do more to address these inequalities in the workplace.

How Experience Capital Can Help Women Thrive 

Ellingrud points out that women’s high achievements in early life often don’t translate to later career success, due in part to that broken rung. “Women today in the U.S. and most developed countries, receive about 59% of college degrees, are 70% of valedictorians, have higher average GPAs, [the] majority of master's degrees, and majority of PhDs. Women academically have been outperforming men for 40 years,” she said. But that 59% drops down to 48% in entry-level corporate roles, and even lower as they move up the ladder: women hold just 39% of first manager roles and 29% of C-suite roles, she says. 

“Women are much more likely to be heads of HR, CFO, CIO, chief legal counsel, [and other] important, critical support function roles. But they’re much less likely to run the biggest P&L or the biggest business unit,” she said. Why does that matter? When CEOs are promoted from within, they usually come from those numbers-forward positions. Currently, only 10% of Fortune 500 CEOs are women. 

Ellingrud says that the solution to this disparity is “experience capital: the wisdom you build on the job.” She cites a study of corporate roles that shows half of your lifetime earnings come from your education and what you bring to your first job, and the other half comes from experience capital, or what you learn on the job. “If women can build more and equal experience capital to men, we will catch up in terms of our career progression,” she said. 

This can also help close the gender pay gap. About 80% of the gap can be traced to two main factors: roughly one-third stems from women spending fewer years in the workforce, often due to childrearing responsibilities, while the remaining two-thirds is linked to the types of jobs and work arrangements women tend to choose. “Women, when they jump jobs, are much more likely to decrease in income quintile [and] men are much more likely to increase in income quintile. That could be because we’re choosing less competitive jobs,” she said. “But we also may be trading off things for flexibility, for deeper alignment with our values.” These are all good, valid choices, she says, but women need to find ways to continue building experience capital to subsidize their desire for flexible, meaningful work. 

Building Experience Capital

The number one thing you can do for your experience capital in your early career is not choosing a role or a boss, but picking the right company. “It’s correlated with 50% higher lifetime earnings,” she said. The right first company will invest in your learning and development, provide cross-functional rotations to stretch your skills, and have a clear strategy for your growth. 

Another smart early career decision is “making bold moves,” or choosing roles or projects that use stretch skills far beyond your comfort zone. And women should make choices that put them in the “power alley” or “the cash register of your industry,” like a profit and loss role. “If you do start there, your lifetime income is likely to be 20% higher,” Ellingrud said. Even if you don’t stay in the power alley forever, that perspective will help you across other roles. 

Finally, “go where the jobs are,” said Ellingrud. Fields like AI, healthcare, and transportation are growing, while female-dominated areas like customer service and office administration are shrinking. 

Networking is a crucial skill, she says. “Women and people of color tend to be over-mentored and under-sponsored,” she said, getting lots of advice but few tangible opportunities. “70% of jobs are not even posted, so if you want to make a bold move, it's probably somebody who knows you who’s going to bet on your potential to rise to the occasion.” 

Women should also focus on building technological skills that go beyond automation but dig deep into how tech can interact with and transform a team. “It’s not Gen AI that’s going to take your job, it’s someone who knows how to use Gen AI,” Ellingrud said. Soft skills like negotiation, empathy, relationship-building, and inspiring a team are also highly valuable to making you an extraordinary manager. 

And women can succeed by developing their own entrepreneurship. This doesn’t necessarily mean creating your own business, but instead could look like starting a new imitative, creating a department, or launching a new product within a larger organization. 

The last factor for creating experience capital is preparing for the inevitable. What is the big inevitability for women in the workplace? Bias. When faced with two resumes that are identical in every way except for the name at the top, Jane Doe vs. John Doe, even women “will ascribe greater leadership and higher future potential to John Doe, because we’ve been so socialized in our notions of what leadership looks like,” Ellingrud said. 

This bias extends beyond the image of traditional leadership and into what is known as “the motherhood penalty.” When Jane Doe’s resume lists her active participation in a parent-teacher association, she is 87% less likely to get called in for an interview because we assume she will not prioritize her work. Remarkably, knowing that a man has children can work in his favor, as he becomes viewed as more trustworthy and stable, even more so the more children he has. That’s “the fatherhood bonus.” This means women need to be thoughtful in their approach to maternity leave so that they don’t lose momentum and keep building experience capital.

They also must take their health into account. “Women, on average, live longer than men. We also live 25% more years in poor health” Ellingrud said, as they are more likely to be misdiagnosed or not taken seriously when they have a concern. Women have lower retirement savings, so they live less comfortably later on, and are less likely to be involved in financial decisions, even when they know just as much as their male partners. All of this comes down to smart planning for the future. 

Ellingrud and her co-authors compiled more than a decade of research and interviewed 50 women before deciding to write the book. She hopes that the information can empower women to make better career decisions. “Every time I would share [the research], I felt like it was new news to so many people,” she said. “And if you don’t know the facts, how can we make the best decisions and tradeoffs for ourselves?”

Katie Chambers is a freelance writer and award-winning communications executive with a lifelong commitment to supporting artists and advocating for inclusion. Her work has been seen in HuffPost, Top Think, and several printed essay collections, and she has appeared on Cheddar News, iWomanTV, On New Jersey, and CBS New York.

(Photos by Travis Johansen for From Day One)