New data shows female bosses are thriving in the business world
At the weekend, The Sunday Times featured a recent survey by Barclays Wealth Management which showed that female entrepreneurs were out-performing their male counterparts when it came to pay. The average income of a female entrepreneur or business owner with at least £1m in investable assets was £382,000 vs £327,000 for the average male, a difference of 16.8%. However, for executives in paid corporate employment, the average female is taking home £217,000 vs £273,000 for the male which is a difference of -20.5%.
The Sunday Times cited several reasons why the female entrepreneurs are performing so well as their own boss, as opposed to in the corporate environment.
- First, when running their own companies, women have the flexibility to organise their day around other responsibilities they may have, especially children. Women with children, or elderly dependents, frequently find it hard to reconcile the demands of the corporate structure including desk-time and face-time with the needs of the family. As their own boss, women are rewarded for what they do, not how or when they do it.
- Secondly, when running their own companies, women can pay themselves based on their business performance and growth. In the corporate environment, pay can be very much dependent on the relationship with a boss, and the ability to negotiate salary, bonuses and other elements of an executive package. Julie Logan of Cass Business School says, “Women hate asking for money. They tend to go to their bosses only when they have a problem, whereas men tell their bosses when they are doing well, which increases the chances of a pay rise.”
- Julie Logan has also found that women tend to more risk averse when it comes to borrowing money. This may mean that their business expands more cautiously but when growth comes, more of that upside can be allocated in salary or drawings.
- Many women find the presence of conflict and politics in the workplace quite draining and difficult to navigate, especially if they are also trying to achieve a good work-life balance. As an entrepreneur or business leader, a woman can set the tone for how she wants to work and focus on productivity instead of managing up and across.
In my experience, men and women have the ability to perform equally well in a corporate job or running their own businesses but I have observed 2 other factors which I think gives women a head-start as an entreprenuer.
- Without generalising, the kitchen table sector has grown because of a wealth of creativity in the minds, and lives, of a huge number of women. Mumprenuers are responding to the needs of others like them and building great businesses as a result. Consider “Not on the High Street” from Sophie Cornish, or Anna Gibson and Philippa Gogarty who imported the essential Micro Scooter. Not to be outdone, Paul Lindley has had huge success with Ella’s Kitchen – a man, Ella’s Dad.
- I have also personally seen that many of the women I work with are very happy to start small and to grow over time. They set manageable goals and stick to them. Many of the men I work with are conditioned just to think about the big ideas and the hugest success stories. They do not want to start small with realistic goals. This can cause them to procrastinate. There is nothing wrong with huge goals but we do have to start somewhere.
I thought the article on Sunday 27th January was very thought-provoking. So did Suzanne Doyle-Morris PhD and author of Female Breadwinners. Suzanne told me, “This has got to be a huge wake-up call to companies to rectify pay inequities, particularly in fields where there is a discretionary pay element, such as bonuses. This research essentially tells women: “If you set up on your own as an entrepreneur, not only will you have more control over your own hours – but you’re likely to take home a bigger pay packet too!”