Working women have undeniably been more impacted by Covid-19, across job losses and career stagnation.
Article by Katie Lewis, COO, Rainmaking.
According to National Women’s Law Center (NWLC) in April alone, women accounted for 55% of the jobs lost with only a third of those jobs returned in May and June. A recent study by UCL outlined that women have spent more than twice as much time as men on their children’s home schooling and development during the UK’s coronavirus lockdown.
However, as we look ahead, there is a clear opportunity for this tide to turn – and for women to switch this short-term pandemic pain into a long-term gain. As I see it, there are two market forces at play that will enable women to benefit.
Firstly, we have seen a global shift to remote working. Businesses that may have been culturally averse to letting staff work from home had to shift their policies overnight. Six months on and they are seeing the gains. Employees have had a taste of a new way of work, and they like it. As we look to the future, the vast majority of organisations have pledged to keep remote working options, and downscale offices to conserve cash. For working mothers this is a game-changer that finally levels the playing field.
Secondly, and perhaps most crucially, the pandemic is opening a door that many women had not previously considered – starting their own business. It’s a fact that women make good leaders. We’ve even it seen it play out across how governments have handled Covid-19. Former IMF chief Christine Lagarde praised female leaders for their “stunning” response to the coronavirus. She said the policies adopted by female heads of state were proactive and their communication style was clear.
To date women have been woefully underrepresented in the startup scene. A mere 7% of funds raised by European VC-backed companies went to teams with female founders. However, according to the Kauffman Fellows Research Center, startups with at least one female founder raise 21% more in venture capital funding than companies with all male teams. Perhaps this is because startups founded and cofounded by women are found to perform better over time relative to startups founded by men only – their companies are proven to generate 10% more in cumulative revenue over a five-year period.
With the right out-skilling programmes, and organisations making the transformational approach to provide more pathways during redundancy and layoff schemes, we can start to make a positive impact to the lives of these women, their futures and their families. Statistics from GoDaddy and Directline both show that a third of people redundant want to take the opportunity to start a new business. And interestingly the Global Entrepreneurship Monitor (GEM)’s 2018-2019 Women’s Report showed the intention to start a business within the next three years is approaching parity between men and women. Globally, younger women between the ages of 25 and 44 had the highest entrepreneurial participation rates.
With support, education and guidance, we can see the success rate for entrepreneurs of all kinds from those wishing to start a freelance business to the next major corporate increase from 10% to over 70%. Providing that training as an outskilling pathway within the options for redundancy will become invaluable to those who want to take this opportunity.
Those that decide to create their businesses are in the position to take control over their ability to generate security for themselves by building their sustainable source of revenue, delivering stability for futures and families. The freedom to control their work experience, career path and work environments can have huge impacts on working single mothers.
The same Pregnant then Screwed survey showed that “more than half of employed mothers say lack of childcare has had a negative impact on how they are perceived and treated by their employer.” Having responsibility for when and how they work can also give them back control over their daycare needs or even potentially work towards starting businesses that can address and innovated childcare bringing new freedoms and support to other working mums.
Adding a “startup” pathway to redundancy programmes, we could also start to see another unbalanced statistic positively impacted. If we use this time to begin providing women with the opportunity to start their own business, we could begin to bridge the startup divide.
V.C.s have traditionally invested 98% of their capital in startups led by men and when women-led startups that did raise capital, on average, raised 36 times less money in 2017 than those founded by men, according to PitchBook Data Inc. But with more women coming out of roles and having access to startup support pathways, we could start to see a new flood of women entrepreneurs.
By empowering women to start their businesses, we might just be empowering a re-start of our economies. As Luke Johnson recently wrote in the Times, “No one else in society creates jobs like entrepreneurs do. They are the real engine of any dynamic economy.” The GEM study also showed that prior to Covid19 in North America, the total employment by women-owned businesses rose by 8%. In comparison, for all companies, the increase was lower at 1.8%. When women entrepreneurs are engaged, they are powerhouses and can make a significant input into our future.
As women feel the impact of Covid-19, if corporates making these decisions to significantly reduce their talent pools can discover the power of startup outskilling we could see a movement of empowerment and economic growth for us all. Given the enormity of the challenge facing the global economy, we must be thinking about how we can empower women entrepreneurs as they will be our future.