Menu

Small business growth and entrepreneurship will be the mainstay of women in work

By Phil O'Reilly, September 2020

The latest data from Stats NZ tells us that 10 out of every 11 people who have already lost their job in the wake of Covid-19, are women. It is very sad news that women are bearing the brunt of this pandemic-induced swell in unemployment. And the fact that it was obvious that this would happen makes the situation even sadder and more frustrating.

Women are overrepresented in tourism and hospitality, as well as in part-time and casual work, and it is all of these areas that have been most affected by the lockdowns and disruptions to businesses that have occurred during the ongoing Covid-19 crisis.

Unfortunately, more unemployment casualties will follow as the government wage subsidies inevitably roll off and our "next normal" emerges. If we don't take action, we will see many more women than men on welfare for the long term. In particular, this will affect older, less-skilled women. For them, the path back to employment could potentially be long and rocky.

Worryingly, some of the public reaction to this unacceptable situation has been distinctly less than optimal. There has been much hand wringing, rather than real proposals and action.

Government is probably the worst offender in this regard. Government reaction around jobs has largely been about retaining those that already exist through the wage subsidy. Job creation has been focused on "shovel ready" infrastructure projects, which will primarily assist the construction sector, where very few women are employed.

Calls by some for business to simply step up their diversity practices and magically make things better, ignore just how complicated achieving true diversity in the workplace can be. This also ignores the fact that most businesses will be doing their very best to retain as much of their workforce as possible – and that many have recently become unemployed because the businesses they worked for have stopped trading altogether.

The uncertainty around the ongoing Covid-19 situation – unemployment, job insecurity, the move to home working and, where schools are closed, home learning – also means that more women could likely choose to take reduced hours or simply not look for work at all so they can be home with their children should alert levels change.

Fortunately, there are some steps we can take right now to try to change things for the better.

Free vocational training – the government has already indicated its commitment to free vocational training and assistance for businesses hiring new staff. This will certainly help matters, although more could be done to focus this assistance towards women. For example, tertiary institutions could consider how they attract more women to their traditionally male programmes.

Encourage new businesses – we know that the real job creators in any economy are small businesses and in particular, as OECD research tells us, new small businesses. We need to put thought and effort into creating lots of new small businesses and specifically into how we might encourage female entrepreneurs and boost female employment.

One idea is that we could concentrate on our burgeoning social enterprise and impact sector, where women are highly represented not only as business owners and entrepreneurs but also as employees.

Focus on work flexibility – if the current labour market isn't working for women at the moment, female entrepreneurs are the likely ones to create their own employment. This kind of entrepreneurship could be encouraged to allow for the very kind of work flexibility and remote working that many women might want, given the uncertainty of the Covid-19 situation.

Support start-ups more generally – most new small businesses need cashflow to survive. Government could help here by delaying initial tax payments or providing accelerated depreciation for assets that are needed to start a business. Local council procurement strategies that typically require a proven track record could also become less rigid, in the short term, to enable contracts with new small businesses.

Larger businesses could also consider this. Banks too could step up to do their part by creating proper access to quicker and easier finance.

Promote business mentoring – business success could be helped through access to business mentoring, with a particular focus on mentoring for female business owners. In addition, celebrating women who are already in business may help encourage and motivate those who have been thinking about starting a business to realise their ideas.

No matter what the intervention, some things are very clear. Firstly, we need to put women at the centre and stop the hand wringing. We need to think about how best we can ensure women are employed and a critical part of this lies in encouraging new small businesses. And finally, we need to take action to encourage more women to be entrepreneurs and start doing things their way.

Building roads and railways is doubtless a laudable aim, but if we want to keep women in employment, fast small business growth and entrepreneurship will get us there much more effectively.