Why is it that women make up 47 per cent of the workforce, yet account for less than one third of entrepreneurs in the UK? These ONS statistics are hardly surprising considering the obstacles facing women in work today, but addressing these issues is in the government’s best interests. Statistics suggest that investing in women would bring vital success to our country- RBS estimates that boosting female entrepreneurship would contribute £60bn to the UK economy.
So how can we improve on this? Kauffman Foundation found women tend to start firms at half the rate of men, especially during the ages of 35 and 44 years old. Notably this is also the age when women have young children. We have teamed up with Janvi Patel, Chairwoman and co-founder of Halebury, who suggests a number of options which could help to boost the female entrepreneurial market and redress the balance.
Improve statutory maternity pay
Maternity pay (or the lack thereof) is a major issue that female entrepreneurs face if they are planning to have children. While employers have to provide statutory maternity pay (SMP), this is based on earnings over a period of time, which means that those not employed at the start of their pregnancy can find that they do not meet the criteria to receive it. SMP is also not available to self-employed workers, which for many women is a huge barrier to setting up their own businesses.
In my situation because we had just launched the business, started trading and were taking minimal salary, I lost all my SMP rights – a situation likely to be mirrored by countless others and a big deterrent for many women. Successive UK governments have failed to understand the impact of the maternity and childcare barrier, which has led to much female enterprise potential going to waste. The UK government has the opportunity to change this. A simple solution is to base the SMP calculation not just in the year of pregnancy but over a period of years before the pregnancy.
I was initially against setting quotas because they are arguably antimeritocractic and there is a danger of tokenism. I also believed other initiatives would increase the number of women in government and business without the need for this blunt instrument. However, progress has been slow. Quotas have the potential to do something transformational: change culture. Laws help create our culture and determine what is acceptable or not. For example, through shared parental leave we make it acceptable for parents to share maternity leave.
The legal and regulatory enforcement of quotas would serve two purposes; firstly, they create the culture and standard which should be greater equality for women in work, at senior positions, in government and also for women entrepreneurs. Secondly, once equality is achieved it ensures decisions are made though a lens of equality which could finally signal the death-knell of the “old boy network”.
Increase availability of funding and investment
Research published by Barclays Bank and the Entrepreneurs Network suggests that despite the fact women have been found to out-perform their male counterparts, there is a serious lack of funding available for female-led start ups. Women entrepreneurs bring in 20 per cent more revenue with 50 per cent less money invested, and yet for many companies this is a reality that has to be faced in order to make up for the worrying lack of investment available to them: women-led businesses were found to achieve far lower levels of funding, with male entrepreneurs 86 per cent more likely to be venture-capital funded, and 56 per cent more likely to secure angel investment.
Female entrepreneurs are still facing a long journey to gender equality in business. Considerable investment is required in order to help women thrive and to increase the numbers of female-led businesses, but with the potential growth that be gained, this investment should be made a priority.
Chairwoman and co-founder of Halebury