A quick gender critical overview

the impact of covid 19 – THE GENDER GAP

Here at the Feminist Directory we think that it is important to observe the world through a gender lens. Data shows that the COVID19 pandemic has disproportionately affected many sectors which are female dominated such as Healthcare, Early Education etc.

The pandemic has also led to a rise in unpaid care work which is disproportionately falling to women. We have researched how this combination of factors is affecting women’s mental health, physical health, economic stability and professional lives.

On this page we will look at whether there are any gender related implications for women’s careers in the current climate of the Covid pandemic. We start with a broader view before zoning in on a couple of business sector case studies. Any intersectionalities will of course additionally shape an individual’s experience but for the sake of this exploration we focus on gender.

We will explore:

The general climate of the Covid pandemic

The broad impact on women

The impact on mothers and women with caring responsibilities

We will then look at a specific couple of sectors: finance and start up business.

The need for Gender Lens investing

What can we do going forwards?

Further resources.

General Climate

As the pandemic has unfolded, we are starting to collect data of the gendered impact of the COVID19 pandemic. Whilst the medical effects of Covid are seeing higher rates of men infected with the illness (along with higher death rates – men are 2.4 times more likely than women to die of Covid despite a higher proportion of women working on the front lines.)

The economic effect is emerging as more dangerous to women. In fact, McKinsey have predicted that global GDP in 2030 could be $1trillion below where it would have been if covid had affected women and men equally in their respective areas of employment.

https://www.frontiersin.org/articles/10.3389/fpubh.2020.00152/full)

Table: http://documents1.worldbank.org/curated/en/618731587147227244/pdf/Gender-Dimensions-of-the-COVID-19-Pandemic.pdf

General Climate Covid

The McKinsey report shows that women and men make up differing proportions within employment sectors. For example, women are more likely to work in accomodation, food and retail (sectors that have been severely impacted by the pandemic). Whilst men are more likely to work in the business and finance sectors which have weathered the pandemic much more successfully.

Table: https://www.mckinsey.com/featured-insights/future-of-work/covid-19-and-gender-equality-countering-the-regressive-effects

General Climate Statement

UN Secretary-General António Guterres:

“COVID-19 could reverse the limited progress that has been made on gender equality and women’s rights”. “The pandemic is deepening pre-existing inequalities, exposing vulnerabilities in social, political and economic systems which are in turn amplifying the impacts of the pandemic…Across the globe, women earn less, save less, hold less secure jobs, are more likely to be employed in the informal sector. They have less access to social protections and are the majority of single-parent households. Their capacity to absorb economic shocks is therefore less than that of men.”

https://www.thelancet.com/journals/laninf/article/PIIS1473-3099(20)30568-5/fulltext

General Climate: pre Covid women in business

In many business sectors women make up a larger percentage of the workforce and yet many do not progress to the leadership and executive roles.

Just 9% of 650 top investment bankers in London are female, according to exclusive analysis of the upper ranks of finance giants in the City by specialist headhunters for FN. https://www.fnlondon.com/articles/under-10-of-top-city-dealmakers-are-women-its-still-very-testosterone-fuelled-20200810

Women-led businesses achieve far lower levels of equity investment, with male entrepreneurs 86 per cent more likely to be venture-capital funded, and 56 per cent more likely to secure angel investment. (Untapped Unicorns, Female Founders Forum/ Barclays 2017)

McKinsey research has also found a diversity dividend for companies. For example, those in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability than companies in the fourth quartile.

Table: https://english.ckgsb.edu.cn/blog/psychological-resilience-before-and-after-work-resumption-during-covid-19-episode-2-resuming-work-gender-differences/

Motherhood

Women have always done the lions share of care work and domestic labour. The covid pandemic has exacerbated the pressure on women – particularly those with young children. In the earlier days of Covid there was hope that the new home working climate would serve women exceptionally well and create further opportunity.

However as the pandemic continues, research has revealed that domestic work and childcare are not being equally split. There has been an increase in women working ‘two shifts at the same time and the mental health toll is driving some to consider quitting their jobs in the pandemic’ (Simone Ramos, https://www.bbc.co.uk/news/business-53363253)

‘In Australia, provisional results of a survey by the University of Melbourne suggest that in households with children, parents are putting in an extra six hours a day of care and supervision, with women taking on more than two-thirds of the extra time.’

Whilst offices re-open and workers return to their workplaces, education establishments are still shut and there is a real threat that many women will have to need to stay at home and remain invisible. Historically to succeed within the business world, ‘women have to constantly improve performance, whereas men are promoted based on potential’ (Allyson Zimmermann, Catalyst)

There is a high rate of women in business and finance stepping back from their jobs due to family pressures in comparison with their male coworkers. UCL also found that ‘women with primary school aged children were considerable more likely to have given up working than fathers’ with mothers 14% more likely to be furloughed. In three quarters of heterosexual UK households, men out earn women in a ‘healthy’ climate. In the time of the pandemic it is clear to see whose careers will be forced to take a back seat. According to the IFC, British Mothers were 23% more likely than fathers to be temporarily or permanently unemployed during the pandemic.

A particularly hard hit demographic of the pandemic is single parent households, where the effect is drastically felt. In UK households, these have been the hardest hit, seeing the largest decline in household income.

According to Gingerbread’s report:

1 in 4 UK families are single parent households and of this figure 90% are headed by a single woman. Research by the Institute for Social and Economic Research at the University of Essex found in the wake of the Covid pandemic, the earnings of single parents fell by more than double the amount experienced by households with children and more than one adult. Average weekly earnings fell by £73, from £326 to £253.

Motherhood and Finance

Although there is a lack of data as of yet on women and mothers within particular sectors, there is anecdotal evidence of the situation. Let’s take the finance sector. An industry that traditionally rewards long hours.

According to, Caroline Criado Perez, author of Invisible women: ‘the traditional workplace is tailored to the life of the mythical unencumbered worker … his life is simply and easily divided into two parts: work and leisure’.

A mothers potential has historically been capped. She cannot compete with the ‘unencumbered’ male colleagues on the team. Although this traditional workplace environment has been challenged in the wake of the pandemic with working from home arrangements in place.

This could be a time for positive change:

‘We saw during the 2008 financial crisis that inclusion and diversity can rapidly be deprioritized when firms are in an emergency response mode, managing costs, and fighting for survival. The flexibility remote working brings will reduce the need for ambitious employees to make sacrifices in their personal lives in order to reach leadership roles. Both these outcomes will significantly benefit women and improve the gender balance in financial services.’

https://www.oliverwyman.com/our-expertise/insights/2020/apr/can-covid-19-spur-gender-balance-in-finance.html

Motherhood and Finance: case studies

Some mothers who work in the City are already expressing fear that the pandemic will derail their careers in an irretrievable way. The Financial News published the case studies of working mothers in July 2020 (by Paul Clarke) citing one mother:

“At the moment, I just feel sh*t,” said one City professional. “I feel like I’m failing as a mother and I’m failing at my job.” Her husband, an equities trader at a rival bank, had to work while markets were open, locked in the spare bedroom throughout the day. This meant Mary needed to take care of their two young boys as childcare options evaporated. “I start work at 5pm, checking emails and messages sporadically during the day to keep in touch,” said Mary, who declined to give her real name for fear of repercussions from her employer. “It’s a stressful arrangement, and not sustainable over the long term.” “I put the kids to bed and go back to work,” she said. “A lot of people are logged on at that time — but all the mothers are logged on at that time.”

Mary cites that it’s doubtful that performance drops, as many are working harder and attempting to overcompensate — “perceptions are a different matter”

Finance

Prior to the pandemic the UK Government set up the Women in Finance Charter which attempts to address the gender imbalance in the finance sector. Companies are able to register and report on their work on gender inclusivity. The Charter was introduced following the ‘Empowering Productivity’ report into harnessing the talents of women in finance.

Some great work that their members have done:

Monzo have pledged to work on gender inclusivity in their leadership team. The aim to have their board and executive committee as 40% female by 2020.

Starling bank: Aimed to increase women in senior management roles to 30% in 2021. They have exceeded this with 41% of roles now filled by women.

But why is the sector so resistant as a whole? Progression from middle to senior level roles is ‘worse in financial services than any other sector’ (Gina Miller) and yet according to McKinsey, ‘those in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability than companies in the fourth quartile.’

Start Ups

Start up business has boomed in the past few years. The number of women going into business has risen by 45% in the past decade in comparison to 27% rise in male operated business.

There are prominent differences between the genders in their reasoning for launching a business. According to HM Treasury’s Rose Review of Female Entrepreneurship in 2019 – the number one reason for women to launch a business was ‘flexibility around family care’. Men were almost twice as likely as women to cite making ‘more money’ as a motivation (ONS Regional Trends, Women in Business). There is a startling lack of investment in women led business despite evidence that women led companies are exceptionally profitable. When investment is secured, women’s businesses return 20 per cent more revenue with 50 per cent less money invested (Untapped Unicorns, Female Founders Forum).

Small and Growing Businesses (SGBS) operate on razor thin margins even whilst there is a healthy economic climate. They are reliant on steady investment flow. According to the Criterion Institute, nearly 42% of SGBS are ‘at risk of failing in the next six months’. Positive research is coming through to prove the resilience of women owned businesses – a 2019 study shows that women entrepreneurs found that their enterprises are as resilient as mens – despite receiving lower revenue and significantly lower investment’ (Farrel, Wheat and Mac, 2019).

These facts suggest that we could see women entrepreneurs being particularly hard hit in the wake of the pandemic – when investment in women owned businesses is already significantly lower. Start ups are particularly vulnerable in the wake of the pandemic ‘due to smaller client bases, fewer cash reserves and more limited credit options than larger companies’ (Action Brief UN women)

Another factor to be taken into consideration when looking at the effect of Covid on Women led startups is the sector in which they operate. Despite an initial dip in investment in early March, investment is picking up in some sectors. Is this good news for women?

Seedlegals has produced sector based research and investment has leapt up in EdTech and other tech based business (overwhelmingly male dominated). Meanwhile, there has been a drop in investment in the food sector – a sector with much more female presence.

According to Prowess, ‘up to £250 billion could be added to the UK economy if women started and scaled new businesses at the same rate as men.’

Gender Lens Investing

With women only receiving 2.7% of venture capital dollars in 2019 (according to female founders). There has been a shift to using Gender Lens Investing, this will only become more important in the wake of the pandemic to save women owned business. According to the World Bank, ‘covering costs of an unforeseen health emergency is one of the most common reasons women give for having to liquidate or decapitalize their business’.

However, the Criterion Institute believes that – in the wake of covid – where inequalities are exacerbated, if investors commit to use a gender lense then they can ‘elevate attention to existing gender and power dynamics’. They warn that if we do not then ‘structural inequalities will continue to grow and impede the economic recovery process’.

‘Women entrepreneurs and leaders have had to be flexible and adaptable in response to this crisis and now they must have access to appropriate seed capital to support business pivots or new businesses’

https://criterioninstitute.org/resources/responding-to-the-covid-19-crisis-with-a-gender-lens-an-opportunity-for-gender-lens-investors-in-southeast-asia

Gender Pay Gap

We live in a society where there is a variable gender pay gap dependent on sector. In times of global crisis, inequalities are exacerbated. Experience of past world crisis shows us that women take longer to financially recover – “Everybody’s income was affected by the Ebola outbreak in West Africa,” Julia Smith, a health-policy researcher at Simon Fraser University, told The New York Times this month, but “men’s income returned to what they had made pre-outbreak faster than women’s income.”

In a climate where paid working hours are being reduced and unpaid working hours have increased, women stand to become poorer.

“The Australian Bureau of Statistics data shows that 325,000 women became unemployed in April, which is 55 % of all jobs lost in Australia, while female work hours reduced by 11.5 %, compared to a 7.5 % reduction in male hours,”

https://www.rmit.edu.au/news/all-news/2020/aug/impact-of-covid-19-on-women

Gender Pay Gap Reporting

After the start of the pandemic, in March, the UK government suspended the need for companies to report their gender pay gap. Research carried out by Business in the Community has shown that half of the companies that reported in the previous year, when mandatory, have chosen not to report this year.

The charity has warned this crisis could “set back women’s equality a generation”. Charlotte Woodworth, gender equality campaign director at Business in the Community, says: “Pay gap reporting is a vital tool in understanding and tackling gender inequality at work. If we don’t have a clear picture of women’s status at work entering the crisis, we won’t be able to take the right steps going forward. (https://www.independent.co.uk/money/spend-save/coronavirus-women-finances-pay-gap-jobs-furloughed-retirement-household-children-school-a9580671.html)

Australia introduced legislation in 2012 which instructs companies to submit annual reports on their gender equality progress and performance. ‘These cover gender composition (including governing bodies), remuneration, parental leave, and flexible working, amongst others. A great example of government doing its bit to enforce, rather than just encourage, change.’ (https://gosuperscript.com/blog/7-startups-making-strides-in-gender-equality/).

It is no surprise that Equileap placed 25 Australian companies in it’s top 100 for accelerating gender equality in the workplace.

What’s to be done?

The World Bank warns a very bleak outlook on the world’s economy if gender is not highlighted and taken into account during the economic recovery period after the Covid pandemic.

UN Women suggest for start ups that Gender Lens Investing is imperative for them to weather this storm:

‘A multi-stakeholder approach is needed, where governments work with large businesses, intergovernmental and international organizations and civil society organizations to: 1) reach out to women entrepreneurs to identify gender-specific needs; 2) strengthen women entrepreneurs’ access to financial services and credit; and 3) promote digital transformation and flexible business models for women-owned SMEs.’

Indeed, women entrepreneurs could flourish in a post covid world according to a new report by the Cheung Kong Graduate School of Business, a study found that ‘female leaders and executives in China have shown higher psychological resilience during the Covid-19 pandemic than men of the same rank.’

There is room for home working and flexibility to bring an advent in women’s participation in the workforce. But only where it is fully embraced culturally and women are not in a position where they feel they are forced to overcompensate. The potential of working women is there to be tapped and invested in.