Women in business: should we celebrate or commiserate?
Inequality between women and men in the workplace is one topic which consistently crops up in the business world. Most headlines focus on the big-hitting statistics: who sits at the top of the highest earning companies, the stark inequalities of pay, or vague estimations of the time it will take for a full gender balance to be achieved. Within these wider discussions however, our latest study has taken a more specific focus. Namely, looking at the gender split in company formation statistics from the past year in the UK. With this, we can see who exactly is at the forefront of new business creation in the UK, to get a better clue on what’s really going on with women in business.
Getting the ball rolling: women who are forming companies
Between April 2014 and August 2015, we found that a total of 39,940 companies were formed within the UK. The UK is a current hive of entrepreneurial productivity, with Britain hitting its record number of startups, and increasingly more of them becoming fully-fledged companies. But who is primarily forming these companies? The heads of these newly formed companies are overwhelmingly male:
Companies created by males: 30,225 (75.67%)
Companies created by females: 9,172 (22.96%)
‘Other’: 543 (1.35%)
Here we can see that men are heading up the larger proportion of Britain’s newest businesses. However, their domination where it comes to company creation is by no means consistent. There was a significant drop in male-led companies starting up from November 2014 (just over 2500 companies) to December 2014 (under 2000 companies). From that point onward, these figures continue to lower: never to reach the dizzying formations levels in the earlier months of 2014.
But where do women fit into all of this? Despite the numbers of female-formed companies sitting notably lower than those by men, these figures remain consistent throughout the span of our research. Each month, women were responsible for around 500 new company formations, without showing any significant declines in this figure. Insights, however, from the parts of the country in which women are forming the most new companies, and holding a more balanced ratio against men, have also proved important. Areas where percentages of women business owners are highest are mostly centered around London. The three highest female-led start up rates are:
Uxbridge: 38.14 %
Here, women are seemingly taking the largest strides towards achieving ratio balance, and are making a profound influence in the areas surrounding the UK’s power hub. Additionally, the capital is also home to the most female-headed new companies (2050). Despite these businesses only accounting for 24.67% of those created in the city overall, women are continuing to gain, and hold their ground in Britain’s most competitive business climate.
What about women in SME’s and big business?
The amount of female heads totaled in the House of Common’s latest business statistics in SME’s, and those holding directorships in the FTSE’s top 100 companies sits in a similar percentile to our findings:
SMEs lead by women in the UK: 20%
Female directorships in FTSE top 100: 23.5%
The success of women in the FTSE top 100 companies grabbed the attention of both the media and business world after Lord Davies of Abersoch’s last annual report, marking a rise in the amount of women starting up from October 2014’s figure of 22.8%. The report also confirmed there are now zero all-male boards within the FTSE top 100: charting a more balanced gender split. Business secretary Vince Cable said: “FTSE 100 boards have made enormous progress in the last 4 years, almost doubling female representation to just shy of 25%. We must celebrate this outstanding achievement and the change in culture that is taking hold at the heart of British business”.
But does this really mark a change in British business culture? Of those 23.5% of directorships, the Guardian claims only 8.6% of those are executive roles; placing women in the most part beneath their male counterparts, and missing out on more powerful positions.
What does the future hold for UK businesswomen?
Predicting power structures and gender balance in business is never straightforward. Overall, and as the statistics suggest, some may see that women’s visibility and presence within the business world still leaves something to be desired compared to men.The number of women leading new company formations, SME’s, and in the ‘bigger’ business roles are dissonant compared to those of men. With the percentage of women always sitting around the 20-25%, men are seemingly still predominating in all areas. On the other hand however, our data shows that women are consistently holding lead roles in new companies, and in the most competitive areas of the UK: whereas male numbers are dropping. What’s more, increases in female presence in the upper echelons of the business world is continuing to push back against its predominantly male population.
So what does this spell for the future of women in business? With female head rates being either consistent against male numbers falling, or simply continuously rising, it seems the current ratio at the top is set to change. The effects are proving gradual, but change is happening. Parity then within the male/female ratio then is perhaps not such a lofty ideal in years to come: the question is, however, how many? Thus far there is therefore no need celebration or commiseration; the battle for gender equality at the top of the business world has not yet finished.
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Published Tuesday January 27, 2015