Pandemic and inequitable workplaces fuel UK rise in female founders

Economic headwinds and inequitable workplaces saw a surge in female founders in the UK during the pandemic as working women sought to take control of their careers, according to new data from LinkedIn.

LinkedIn’s data, published today in the World Economic Forum’s 2022 Global Gender Gap Report, shows women are founding their own businesses at a faster rate than men. The pandemic saw an acceleration of a longer-term trend, with the share of UK founders growing by 65% for women and by 42% for men in 2020 compared to 2019.

The rise in female founders has been accelerated in part by the pandemic. Women were particularly impacted during this period because they were more likely to work in service sector jobs, such as Retail and Hospitality, which were most affected by lockdowns. The pandemic also saw many women bear the double responsibility of work and caregiving, forcing them to seek greater flexibility than they were offered by their employers. The pandemic also created new business opportunities, as industries were upended and adjusted to operating digitally, which helped to reduce some start-up costs - like physical offices. Together, these drivers saw women set up their own businesses at an unprecedented rate. 

Underrepresentation at leadership levels 

Women remain severely underrepresented at leadership level and are significantly less likely to be promoted internally to leadership roles.

LinkedIn data also shows that women continue to be under-represented in leadership positions in the UK, with women holding less than a third (30%) of leadership positions. Women’s under-representation starts as early as the management level, creating a narrow pipeline of talent that shrinks with seniority. While women hold almost half (46%) of entry-level roles in the UK, they only hold a quarter (25%) of C-Suite leadership roles. 

LinkedIn’s data also highlights gender bias in internal promotion. Comparing the UK average for men and women in 2021, men were 21% more likely to receive internal promotions to leadership roles than women.   

Sue Duke, Head of Global Public Policy at LinkedIn, said: “The pandemic hit working women harder than men, as traditional gender roles took hold and female-dominated sectors bore the brunt of lockdowns. The serious lack of women in leadership positions continues to be a real problem, yet data shows that male colleagues are far more likely to be promoted into leadership roles.

"Given the economic and workplace turmoil of the past few years, women have sought to take control of their careers and set up their own businesses. While some women were pursuing their passions or seeking out greater flexibility, many women became ‘necessity entrepreneurs’, due to a need for income or because of a lack of opportunities at work. We have to recognise that many of these entrepreneurs had their hand forced by inequitable working environments and we must take urgent steps to make workplaces work for women.”

Scarlett Farhang, former Talent Acquisition specialist and now owner of ‘Scarlett Bakes Cakes’ said: “Like many people, I was made redundant at the beginning of the pandemic. But, ultimately, I’m thankful. If it hadn’t been for this, I don’t think that I’d have ever considered it possible to run my own business, and go full time doing something that started out as just a hobby. 

“The changes I had to make during the pandemic empowered me to take back control over the direction of my own career. I’m no longer chained to the 9-5, working overtime with no reward and recognition. Now, I’m running a bakery business that gives me the flexibility to take a day off when I need to, without waiting on a lengthy approval process or the dread of my time off being declined. Running my own business has not only given me the freedom to take back some time when I need it for my well-being and provided greater autonomy over how and where I work, but it has also enabled me to develop skills that I’d have never had the chance to discover in my previous role - such as financial management, marketing and social media.” 

Targeted action is needed to address the gender imbalance

The Global Gender Gap Report and LinkedIn’s data show that targeted action is needed to make workplaces and societies more equal. The data highlights the need to focus on inclusive and fair hiring practices, as well as internal mobility programmes, and flexible working in order to make progress. Practical steps include removing bias from job descriptions, having representative candidate slates and including women on interview panels. This also includes creating targeted mentoring and training programmes for women working at the pre-manager level, as well as increased awareness and training about unconscious bias for hiring managers and interviewers at this level.

Flexibility will also be critical to making progress. LinkedIn data shows that women globally are 24% more likely than men to apply to remote roles, underscoring the importance of flexibility to women and the role it plays in making workplaces equitable. Flexible working needs be normalised to attract a diverse talent pool, and offered to all workers, not just women. To help people search for jobs that meet their needs, LinkedIn has introduced dedicated remote, hybrid and on-site filters. Last year, LinkedIn created a new approach to flexible working with the focus on trusting employees to determine the best approach. Teams are empowered to choose where they work based on what works best for them, with options of hybrid and remote roles. 

One of the ways LinkedIn is supporting women’s career progress is through opening up free learning courses. Gender in Negotiation; Getting to Yes: Advice for Female Founders on How to Get Funded; Leadership Strategies for Women; and Success Strategies for Women in the Workplace are all available until August 23, 2022. In addition to contributing to the Global Gender Gap Report, LinkedIn has published insights on gender equity and barriers and biases affecting women at work.