Why flexibility remains the number one driver of retention for women

If organisations want to retain skilled female professionals, they must address the practical realities of balancing work and life, writes Suhini Wijayasinghe.

Australia is seeing a significant shift in workforce participation, with more women re-entering employment than ever before. New data from the Australian Bureau of Statistics (ABS) shows that female labour force participation has reached record levels, highlighting a powerful trend that women are returning to work in increasing numbers after career breaks or caring responsibilities.

But while participation is rising, the conditions that enable women to remain in the workforce, particularly flexibility, have not kept pace.

For employers facing ongoing talent shortages, this gap represents both a challenge and an opportunity.

Women are returning to the workforce in record numbers

According to the ABS, the female labour force participation rate in Australia has climbed steadily in recent years. Between December 2019 and December 2024, women’s participation increased from 61.2 per cent to around 63 per cent, one of the highest levels on record. Recent ABS labour force data shows female participation continuing to sit around 63 per cent in 2025, reflecting the ongoing return of women to the workforce.

More broadly, women now make up close to half of Australia’s paid workforce, a dramatic shift from just 30 per cent in 1966, according to ABS historical employment data.

The trend reflects multiple structural changes, including:

• Increased access to education for women.
• Improved childcare availability.
• Cultural shifts around dual-income households.
• Greater acceptance of mothers remaining in the workforce.

Over the past four decades, female participation has risen from around 44 per cent in the early 1980s to more than 62 per cent today, highlighting one of the most significant transformations in Australia’s labour market.

For employers, this growing cohort represents an enormous talent pool. However, participation alone does not guarantee retention.

The participation gap still exists

Despite these gains, women still participate in the labour market at lower rates than men. Government analysis shows the participation gap remains more than 8 percentage points between genders.

The reason is not capability or ambition. More often, it is structural barriers, particularly the unequal distribution of caring responsibilities.

Women’s workforce participation typically dips during their 30s when many have children, before rising again in their 40s and 50s as caregiving demands change. This pattern highlights the central issue: women are returning to work, but workplaces have not fully evolved to support the realities of modern family life.

Flexibility: The make-or-break factor

From a recruitment perspective, flexibility has become the single most powerful lever in attracting and retaining female talent.

At people2people Recruitment, we consistently see candidates prioritising:

• Flexible working hours
• Hybrid or remote work options
• Part-time leadership roles
• Job-sharing arrangements
• Structured return-to-work programs after parental leave

For many women re-entering the workforce, these options are not simply perks; they are essential to maintaining employment while managing caring responsibilities.

Without flexibility, highly skilled employees often reduce their hours, step away from leadership pathways, or leave the workforce entirely.

The business case for flexible work

Forward-thinking employers are increasingly recognising that flexible work is not simply a social policy; it is a competitive advantage.

Organisations that embrace flexible models benefit from:

• Access to a larger talent pool, particularly experienced professionals returning after career breaks.
• Higher retention rates, reducing recruitment and training costs.
• Greater diversity across teams and leadership pipelines.
• Improved employee engagement and productivity.

In a labour market where skills shortages remain a major concern, retaining experienced talent is often more cost-effective than continually hiring new employees.

Practical steps businesses can take now

For organisations looking to retain and support women returning to the workforce, there are several practical strategies that can make an immediate difference.

1. Rethink how roles are structured: Not every job needs to be a traditional full-time, office-based role. Consider whether positions can be redesigned with flexible hours, compressed work weeks or hybrid arrangements.

2. Offer genuine flexibility, not just policy flexibility: Many organisations have flexibility policies on paper, but employees don’t always feel comfortable using them. Leadership needs to actively support flexible work and model it where possible.

3. Create structured return-to-work pathways: Employees returning after parental leave or career breaks often benefit from phased returns, mentoring or refresher training to help them reintegrate confidently.

4. Focus on outcomes rather than hours: Shifting performance management towards results rather than time spent at a desk can open opportunities for highly skilled employees who require flexibility.

5. Maintain regular career conversations: Women returning to the workforce want to continue growing professionally. Clear development pathways and open discussions about progression help prevent talented employees from feeling stalled.

A workforce opportunity Australia can’t afford to miss

The increase in women returning to work is one of the most positive developments in Australia’s labour market in recent decades. But participation alone is not enough.

If organisations want to retain skilled female professionals, they must address the practical realities of balancing work and life. Flexibility is no longer an optional benefit; it is a fundamental requirement for a modern workforce.

For employers willing to adapt, the reward is clear: stronger retention, broader talent pipelines and a more resilient workforce. The women are returning. The question for businesses now is whether the workplace is ready for them.

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