Whether it’s as a business owner or in the workforce, women are driving local economies and contributing to business competitiveness on a national level. But if we fail to harness women’s business potential, we may be shortchanging our economy.
A recent study from Dr. Amanda Weinstein, University of Akron, reported local wages (for men and women) rise when more women enter the workforce. Between 1980 and 2010, Weinstein’s research found that every 10 percent increase in female labor participation led to a five percent increase in average real wages—the amount workers take home after accounting for inflation.
In other words, in cities that had more female workforce participation in 1980, Weinstein found men and women made higher average hourly wages in 2010. Weinstein also found the impact of female workforce participation was heightened when women were not segregated into lowpaying, female-dominated occupations.
When women are brought to the table (as employees and business leaders), businesses and local economies thrive. Companies with more gender diversity see higher returns on equity, higher operating results, and stronger stock price growth.
This diversity benefits all workers—including men—and female business owners are playing a key role in keeping women in the workforce. According to the 2017 Global Gender Gap Report, women in leadership positions are more likely to hire women and in doing so, these women are not just creating jobs, they’re spurring economic growth.
Women own more than 11.6 million businesses—39 percent of all privately held firms. These companies generate millions of dollars in revenue and most importantly, nearly 9 million jobs.
According to the National Association of Women Business Owners, women-owned businesses generated $1.7 trillion in sales as of 2017 and women own one in every five privately owned companies with revenue of at least $1 million.
At the Women’s Business Development Center (WBDC), we are privileged to work with women who are building multi-million dollar companies and we’ve experienced their power firsthand. These women are bringing money into their communities, giving back, and creating jobs for other women and diverse employees.
The power of women in business is clear, so business owners and economists alike should be concerned that the U.S. is seeing a downward trend of women in the workplace. From 2010 to 2016, female workforce participation decreased by 3.5 percent. We can’t afford for this to continue, so what can business leaders do to harness the economic power of women and keep them coming to work?
Support Women in Business
It’s simple. If women are innovating companies, driving economic success, and building successful businesses, we need to support them in doing that. It’s important that we create more opportunities for women in business, offer quality maternity and paternity leave, and improve access to childcare within communities so women can easily go back to work if they’ve chosen to start a family.
While women hold equal positions to men in many professions, with the same expectations and time commitments, they are typically maintaining responsibility for the schedules and activities of their children. When men try to help share the load of their partners, they tend to face criticism from colleagues. This high-mental load impacts productivity and increases stress.
According to Maribeth Bearfield, a human resources specialist, employers can counteract these issues by offering mentoring programs for seasoned employees to sponsor new parents and help them find a balance. They can also help new mothers re-enter the workforce by providing transitional programs after maternity leave or on-site childcare.
Encourage Female Leadership and Entrepreneurship
Company leadership must take active steps to recognize the work of female employees and promote them fairly. The World Economic Forum’s 2017 Global Gender Gap Report found that women made up less than 50 percent of leadership in every industry analyzed. If women are more likely to hire women, we must ensure women are fairly represented in the c-suite. This gives women examples of leadership positions within organizations to which they can aspire, and gives companies access to female executives that can bring new ideas and strategies into the discussion and take businesses to new levels.
We also need to support women in entrepreneurship. Female-founded companies still receive far less capital than their male counterparts. If we are going to unleash the full potential of female business owners, we need to invest in them at equal levels to men.
The WBDC offers access to capital for women and advocates for more parity in investments across the Midwest. We also work with corporate partners and government entities to encourage diversity in procurement. For example, our corporate partners at BP America have nearly tripled their investment in minority and women-owned businesses since 1999 thanks to their focus on inclusion.
Other funders, from banks to venture capitalists, should monitor the diversity in their funding and adjust their protocols as necessary to guarantee parity. Similarly, corporations can adopt diversity programs that encourage certain levels of procurement from female suppliers.
Pay Women Fairly
Despite their valuable contributions, women are still paid 72 cents for every dollar a man makes in the United States. If we continue to undervalue the role of women in our economy and workforce, we will continue to alienate women from participating in it. As business owners or corporate leaders, conduct routine evaluations of your employee wages to confirm women and men are being paid equally for equivalent positions and provide opportunities for each employee to discuss their wages with leadership, as appropriate.
When we talk about parity for women in business, it’s more than parity for parity’s sake. Women are actively improving our economy. They are major players in business, powerful corporate leaders, and they are creating jobs and driving innovation to help our country compete at an international level. We would be fools to not leverage this impact to take our economy to the next level.
If we want to keep women in the workforce, as a business community, we must ensure women are supported as employees and business owners, recognized for their leadership, rewarded for their success, and given a seat at the table.