What will the impact of Covid be on women entrepreneurs?

As figures emerge showing the number of women-founded businesses falling way below men during the pandemic, workingmums.co.uk asks what the impact of Covid might be on women’s self-employment.

'Self-Employed' written on blackboard

 

The gender pay figures have been published and show a slight deterioration in the mean pay gap, even though the gender pay figures relate to snapshot dates in the early part of the pandemic and, for the most part, do not include those who were furloughed. We are beginning to see from various sectors, such as hospitality, travel and leisure, the impact of Covid on women’s careers.

The same seems to be true in the world of enterprise. Data provider mnAI shows that, since March 2020, 726,919 businesses have been formed across the UK, with 72.33% being founded by men and just 27.67% being founded by women. This equates to 416,330 male businesses and 141,204 female businesses founded during the pandemic, says mnAI.

Its figures show the gender gap is apparent at all stages of people’s working lives. For instance, in the 20-30 year old bracket, 21.5% of businesses were founded by women. There was a similar divide in the 30-40 age group, with just 19.1% founded by women. The 41-60 age group contributed the most new businesses during the pandemic, with just 18.03% being founded by women. The remaining age group, 60+, contributed a much smaller number of new businesses and only 12.18% were female founded. There has, of course, long been a gap between women and men when it comes to starting a business, but women have been making up ground of late, mainly as a result of the need and desire to earn and the lack of sufficient flexible working in many workplaces as well as access to affordable childcare.

Yet in her 2019 report for the Government, Alison Rose noted that only one in three UK entrepreneurs was female and that female-led businesses were only 44% of the size of male-led businesses on average, in terms of their contribution to the economy. Moreover, male SMEs were five times more likely to scale up to £1 million turnover than female SMEs. A large part of the scaling up issue is due to access to investment, but the review recognised other factors such as lack of practical family support, such as flexible childcare, higher risk-awareness and aversion and confidence issues from a lack of role models and practical encouragement.

With the pressure during Covid to manage work and children/caring falling mainly on women it is likely that many women just didn’t have the headspace to start a business, which may explain the lower figures in older age groups. It will be interesting to watch whether things rebound as we hopefully emerge from the pandemic in the next year, but the long tail of Covid may make for a more lengthy recovery time for women. Another factor is whether employers, facing skills shortages and having experienced the success in many respects of remote working, will be more open to flexible working and less likely to want to lose women to self-employment as a result.



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