female business – Dickinson Law's Inside Entrepreneurship Law Blog

by Nitya Bodavala

According to a 2022 study by McKinsey and LeanIn.org that surveyed more than 40,000 employees, women hold 40% of entry-level positions but only 26% of C-Suite positions. The higher you go on the corporate ladder, the fewer women you see. For every woman at the director level that gets promoted, two female directors choose to leave the company. The case for more women in leadership positions is evident in the value that female leaders bring. The 2022 study found that companies with more women on their boards invest more in innovation, have higher company performance, and de-risk by contributing more to CSR (Corporate Social Responsibility) and ESG (Environmental Social and Governance). Overall, workforce equality in participation, recognition, and pay would make the world economy $28.4 trillion richer.

Why Are Women Leaving the Workplace?

There are three main reasons why women have been leaving the workplace by droves: (1) lack of pay and recognition, (2) toxic work cultures, and (3) lack of choices.

Unrecognized Work

Although women in leadership do more than their male counterparts to promote Diversity, Equity, and Inclusion (DEI) in the workplace and support employee well-being, they are recognized less for their efforts. Employee satisfaction and DEI efforts retain employees and attract new talent. By 2025, 47% of millennials will actively seek diversity in a potential workplace. With the next generation of leadership actively seeking diversity in the workplace, these policies and initiatives make a huge difference in attracting and retaining top talent. However, the time and energy spent on these efforts are not factored into women’s performance reviews and do not help them advance their careers. Further, women still make only 86 cents for every dollar a man makes, while black women make even less, at 68 cents for every dollar a man makes.

Toxic Work Culture

An MIT Sloan Management Review study found that toxic work culture was a big factor in high attrition rates. The study analyzed the language used by over 3 million U.S. employees in Glassdoor reviews to describe their employer between 2016 and 2021. The study defined toxic culture as disrespectful, non-inclusive, unethical, cutthroat, or abusive. Non-inclusive environments and disrespectful leadership were major factors in responses with the largest gender gaps. The disrespect that women face spans microaggressions, gaslighting, unfair hiring and promotion decisions, outright misogyny, sexual harassment, and sexism. Non-inclusivity may present itself in hiring practices, schedules, or allyship efforts. The study found that women are more averse to joining companies they perceive as non-inclusive, and prefer to find an organization that reflects their values.

Lack of Choice

Women want agency and choices. The option of a more flexible schedule goes a long way in providing a safe work environment. Only one in ten women prefer to spend most of their time on-site, citing work-from-home or hybrid work options as one of their top criteria while choosing an employer. Working from home allows for fewer microaggressions, which is especially obvious to women of color, LGBTQ+ women, and women with disabilities. These are the segments of women who are more likely to face demeaning or disrespectful treatment. Over 70% of HR leaders have said that offering remote work options has allowed their companies to hire and retain employees from diverse backgrounds. Lastly, remote work also keeps women from choosing between their personal and professional identities. They can be parents and employees without sacrificing one for the other.

What Can You Do as an Employer to Retain Female Talent?

Now that you understand what women bring to the table and why they are leaving, here is what you can do to prevent it.

- - Conduct sensitivity and sexual harassment training for all employees and have an action plan for dealing with sexual harassment complaints. Showing your employees that a process exists to help them allows them to feel safer and like they can trust you to deal with issues fairly.
  - Be more diverse in your hiring policies. It benefits you when your clients see themselves represented in your workplace. Plus, when you have a diverse workforce, your employees have a breadth of experience to capitalize on.
  - Have more holistic performance metrics. Accurately evaluate the place women occupy in your company, the work they do, and the value it results in. Get rid of outdated performance metrics and adapt to the changing needs of your employees.
  - Try to have flexible work schedules and offer childcare services for your employees who have young children. If that is not possible, provide dependent care assistance. No employee should feel punished for deciding to have children. Remember that even if these employees take some time off, they return with the knowledge that they have a supportive employer and will be happier, more productive employees. Not supporting them during this time will result in high employee turnover rates and endless hours of training new employees.
  - Offer more leadership training opportunities and pathways for women. Informal pathways for mentorship are fewer for women, so making initiatives like this a part of your institutional structure will make a significant positive impact.

This post has been reproduced and updated with the author’s permission. It was originally authored on March 28, 2023 and can be found here.

Nitya Bodavala, at the time of this post, is a 3L of Penn State Dickinson Law. She is from Hyderabad, India, and comes from a family of entrepreneurs. It was natural to gravitate toward working with entrepreneurs even within the law.

Sources:

https://www.forbes.com/sites/tomaspremuzic/2022/03/02/the-business-case-for-women-in-leadership/?sh=7d74b5769cbb

https://www.mckinsey.com/featured-insights/diversity-and-inclusion/women-in-the-workplace#/

https://www.forbes.com/sites/forbescommunicationscouncil/2022/03/03/the-importance-of-diversity-and-inclusion-for-todays-companies/?sh=5bd9569649df

By: Allyson Lonas

Women entrepreneurs are facing unprecedented challenges during COVID-19. In this pandemic, women may not only be faced with the challenge of running a business from home but could be simultaneously in charge of their children’s care and maintaining the household. These women have been given the task of adapting to a new business environment, developing out-of-the-box thinking, and using their skills to conform to this new era of entrepreneurship. They have had to in order to keep their business afloat. So, we must prioritize these women and focus on providing capital to female business owners.

Why are women entrepreneurs suffering more than their male counterparts?

The COVID-19 global crisis has revealed that our daily lives are built on the unpaid work of women. Although women have outpaced men in college attendance and degrees, the number of women engaged in unpaid work continues to outpace that of men. Crises tend to reinforce the idea men are responsible for putting bread on the table while women should take care of the children. In the United States, statistics from 2019 reveal that the average hours per day parents spent caring for their children within the home was higher for women, even when these women worked outside of the home. In fact, a woman employed full-time spends an average of 2 ho urs on household activities and caring for family members.

According to the Bureau of Labor Statistics, the percentage of women engaging in household activities is 84.9% compared to 71.4% of men. Women spend three times as many hours as men in unpaid care and domestic work, limiting their access to opportunities in the workforce. This leads to women entrepreneurs being at the heart of the COVID-19 response.

As the formal and informal supply of childcare declines, the demand for unpaid childcare provision falls on these women. According to UNESCO, 1.37 billion students (80 percent of the world’s student population) are back home as COVID-19 closures expand. Overwhelmingly, this constrains a parent’s ability to work-from-home with children back in the household. According to the National Bureau of Economic Research, working women bear the brunt of the COVID-19 recession, unlike previous downturns that hit working men the hardest. In the aftermath of the global financial crisis, men suffered the majority of job losses because males dominated the manufacturing and construction industries which suffered the biggest blow. But, Sociology Professor Aliya Hamid Rao, at Singapore Management University, found women took longer to return to work even after the last downturn as a result of women taking care of their families.

COVID-19 provides different challenges; now, the hardest hit industries are those where workers cannot telecommute. And evidence suggests that working women are more likely to have jobs that do not allow them to telecommute. The majority of women-owned businesses are hair salons, nail salons, and hospitality/food service industries. Additionally, with women taking on the role of household maintenance, those hours spent at home taking care of their children are hours that could be spent on income generation. This burden is at the heart of the motherhood penalty in the workforce. It is devastating for women who have spent their whole life building their businesses, both economically and from a mindfulness standpoint. Their business is their livelihood, their success, and years of hard work.

What can women entrepreneurs do…

Even though many women entrepreneurs are overwhelmed with business operations and are worried about keeping their doors open, there is a solution to their problem. The solution involves support: on the governmental and community level.

On March 27th, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted. The relief package was a $2 trillion economic relief package to protect people from the public health and economic impacts of COVID-19.
The Women’s Business Enterprise National Council provides a variety of options for women: funding options, grants, and financial resources, and business support tools. The coronavirus relief options include the Paycheck Protection Program, EIDL Loan Advance (providing $10,000 of economic relief to businesses experiencing temporary difficulties), SBA Express Bridge Loans, and SBA Debt Relief.
For small business owners, the Paycheck Protection Program resumed accepting applications on July 6 and is a crucial loan program providing loan forgiveness for retaining employees during the pandemic. On the Women’s Business Enterprise National Council website (link above), there is a “learn more” button to take you to a particular funding option where you can access additional program information, frequently asked questions, and view a direct application.
In Pennsylvania, we are fortunate that the Pennsylvania Department of Community and Economic Development has specific programs and funding to ensure that financial assistance reaches minority-owned and woman-owned businesses. So note: if you are a woman entrepreneur in another state, check and you may have similar assistance waiting for you!

With so many options available, the process might seem overwhelming and difficult. To help, here is a quick guide to help point women entrepreneurs in the right direction.

Even the playing field for obtaining financial help for female entrepreneurs is far from level. A recent study found that men were significantly more likely to secure funding than women when presenting the same business concept. Fortunately, there are non-traditional ways to obtain funding. The Capital Access Lab is a national initiative that aids to find, promote, and provide new kinds of capital to underserved entrepreneurs, including women. It will provide capital in the range of $250,000 to $1 million into three to five investment funds.

In addition, there are other programs to provide support for women. The company, EnrichHer, helps fund small businesses created by women. Their mission is to focus on social change for women and create opportunities for women-led businesses.

Verizon is even launching a mentoring program for women entrepreneurs affected by COVID-19. This program will connect women entrepreneurs and business owners with a network of women business leaders to guide them through the pandemic’s challenges. The goal is to help women entrepreneurs in a variety of ways.

The Women’s Bureau also helps women by developing policies to protect the interests of working women, promoting equality and economic security, and promoting quality work environments.

…and how can we help?

Women entrepreneurs need us.

First, policymakers should consult women in economic planning and policies. Policies that do not consult women are less effective and create more harm. Before the pandemic, women struggled for equality, something that now seems to be further out of reach. The government and investors should refocus their attention once more on gender equality. Across the United States, 55% of the 20.5 million jobs lost in May were held by women. As the government shifts to rethinking its economy, it could aid the goals of equality. For example, improving the balance of women in companies’ leaderships. Government subsidies could be used to replace pay for workers who need to provide childcare during the crisis due to school and daycare closures and are therefore unable to work, conditional on a continued employment relationship (where they can return to work immediately). Then they could partner with investors to channel funds into companies led by women. It is important we prioritize women entrepreneurs and help provide capital to them.

Second, we need to spread the word and promote women-owned businesses. If you know a local vendor, maybe try her restaurant for lunch instead of a mainstream establishment. If you are going for a morning coffee, visit your local barista. A simple share on Facebook can increase the business’s advertisement reach.

Lastly, we need to show support. Evidence suggests the impacts of the COVID-19 global recession will result in a prolonged dip in women’s incomes and labor force participation. Although these women have conquered the challenge of developing online strategies, revisited their business plans, and adapted to the customers’ needs in a time of crisis, they still need us. Women entrepreneurs are at the heart of this crisis and they need to know we are here to help!

Allyson Lonas, at the time of this post, is a rising second-year at Penn State Dickinson Law. Originally from Johnstown, Pennsylvania, Ally attended The Pennsylvania State University for her undergraduate degree and has interests in corporate law, antitrust law, and government law. In her free time, pre-COVID-19, she enjoyed traveling.