Is Inequality Pushing Women From Corporate To Entrepreneurship?

Over the past few decades, there has been a spurt in women-owned businesses. Despite women making progressive strides in the corporate world, the biggest challenge is that people continue to undermine their credibility. Corporate women face not only microaggressions and discrimination but also the need to blast through the glass ceiling as they earn their place at the top.

So, what’s compelling women to enter the most competitive business world in the masses? Most women who have reached the top in the workplace will confirm this. Several driving factors act as obstacles for them in the corporate world, including:

• Being paid less than men for effectively the same work
• The constant struggle to advance to top-level managerial roles and being underrepresented on decision-making panels
• The lack of flexibility and work-life balance
• Unconscious gender biases
• Toxic work environment

This article will provide a clear view of the factors associated with being a woman who faces inequality in the corporate sector. It will also explain why these facts force more women to transition into self-employment over climbing the corporate ladder.

Why Are Corporate Women Switching To Entrepreneurship?

1. Unequal Pay

Women in the corporate world have long struggled to attain equal pay and opportunities. Despite numerous efforts to address this issue, the gender pay gap persists. According to a recent analysis done by Pew Research Center , in 2022, women earned an average of 82 percent of what men earned in the United States.?

This disparity is even more prominent among older women. According to the National Women's Law Center , women between the ages of 45 and 64 who work full-time throughout the year are surprisingly paid only 79 cents for each dollar their male peers make.?

If you break it down further by race and ethnicity, the income imbalance becomes more visible. Black women are paid 38% less, and Latinas are paid 47% less. This means the average woman will be set back on over $ 400,000 throughout her career.

The data below shows how women’s earnings as a percentage of men’s earnings vary in various occupations.

1. Chief executives - 75.6%
2. Financial managers - 66.3%
3. Healthcare social workers -110.4%
4. Education and childcare administrators - 80.8%
5. Retail salespersons - 68.8%
6. Accountants and auditors - 82.4%
7. Marketing managers - 79.9%

While income inequality is to be expected to a certain extent ( mainly because of differences in talent, level of education, experience, and effort), too much of it can be divisive. According to the International Monetary Fund (IMF) , extreme inequality can cause social and political polarization, disrupting economic growth.

The disparity of income affects women’s current earnings and has a ripple effect on their financial stability. This gap may leave women struggling to save money for short—and long-term goals, dealing with high levels of debt, and living pay cheque to pay cheque. As a result, they may lack the financial cushion to retire comfortably or lose the ability to invest in their children’s health and education.

Beyond that, women’s lower earnings may also affect their ability to start and support their businesses. Entrepreneurship has bridged the gap by providing women an environment to continually rise and get into the upper echelons of the business world. Corporate women want to go somewhere where they can add value and be valued while building wealth on their own terms. Being their own boss means they can set their rates and receive a share of the social product (income).

2. Underrepresentation in leadership positions

Another worrying trend is that, while women are equal to the task as their male counterparts, they continue to fight to be promoted to senior-level positions. This is because, in most companies, women are less empowered than men making it difficult for them to get promoted.?

For instance, women worry about treatment during pregnancy or motherhood. They’re also more likely to experience microaggressions, such as being considered incapable of technical work or having their opinions discounted in meetings. All these factors have played a role in women being denied a raise or promotion, making it hard for them to advance.

According to a report by McKinsey & Company , “For every 100 men who are promoted from entry-level roles to manager positions, only 87 women are promoted, and only 82 women of color are promoted.” Despite massive attempts at women's representation in leadership roles, many people still don’t trust them to be in directorship.

The underrepresentation of women in decision-making positions limits their ability to effect change within the company and amplifies inequality. As such, women in the corporate world are demanding more from their employers, and they’re willing to switch to entrepreneurship to achieve their dreams and maximize their potential.

3. The Desire For Autonomy And Work-Life Balance

Unlike men, women are twice as likely to face additional challenges and realities when combining parenthood with a profession. Perhaps because women are considered nurturers, they’re expected to stretch themselves thinner at home and work.?

According to Pew Research Center , women spend a combined total of 32 hours per week managing their children’s schedules and running the household, compared to 18 hours for men.

Discrimination is another constraint on growth that is still prevalent, especially in traditionally male-dominated sectors. For instance, one of the challenges most women continue to face is the motherhood penalty (lost earnings of women with children), which acts as a stumbling block as they move up the ladder.

According to the 2021 Women in the Workplace study , one in three working mothers considered leaving their careers or taking lighter, lower-paying jobs during the pandemic.?

These microaggressions push women to set up their businesses and flee the corporate world as they aspire to create opportunities and gain control over their schedules. Entrepreneurship enables women to prioritize their well-being while coordinating work and family.

4. Unconscious gender biases?

Unconscious biases can majorly impact the hiring process, colleagues' interactions, and business decisions. Sometimes, unconscious biases stem from gender stereotypes that emulate traditional gender roles and norms. Although they may manifest in different ways, gender stereotypes have varying consequences that can contribute to why women are favoring entrepreneurship.?

The most common examples include:

• Women are assumed to offer sexual favors in exchange for a promotion, pay raise, or other hiring benefits
• Hiring managers avoid choosing women for more technical roles because they might get pregnant and leave
• Women being hired to fill a quota and not based on merit
• Women’s opinions being discounted or dismissed in meetings
• People questioning a woman’s qualifications or turning to a less experienced man in the room
• Women being made the subject of crass sexual innuendo, which seeks to diminish the validity of their abilities

Although corporate women continue to make an effort to prove their credibility, sexism against them is deep-seated and may be challenging to reverse. A report by New View Strategies confirmed that one in three women in the tech field experience gender bias at their workplace. Among the 1,000 women surveyed, 38% said they experience gender bias at their workplace, while 38% also said that men are assumed to be more capable than their female counterparts in their tech-based field.

Hiring women based on their gender and not qualifications prevents diversity making it challenging for them to chart their own course in more profitable male-dominated fields. This means that the great shift by women from corporate to business enables them to overcome the unconscious biases and barriers rampant in the corporate world.

?5. A deteriorating company culture

A toxic work environment has obvious red flags that start with the type of culture practiced. According to an analysis by Glassdoor, carried out on over three million US-based employees from 2016 to 2021, 35% of?women were more likely to mention a? toxic work culture than men.

?The data collected indicated that a toxic work culture cuts through all levels, including senior roles. Women leaders were 53% more likely to experience hostile working environments than men.

Women overworking themselves to justify their worthiness and commitment to their jobs is easily one of the reasons pushing them to leave their jobs in such disproportionate numbers.

In addition, women are sick of navigating cliques, passive-aggressive bosses, zero-to-nonexistent boundaries, and mansplaining. A toxic company culture can also lead to stifled professional growth and burnout.

Women leaders seek a more accommodating work culture that doesn’t drain their personal and professional lives. Entrepreneurship creates room and an environment for ambitious women to level the playing field and seek empowerment through business.

Conclusion

Despite being equal to the task and able to bring results, efficacy, and perspective in their capacity, women continue to face inequality in the workplace. Women, especially black women, women of color, and LGBTQ+ women, struggle with unequal pay, gender stereotypes, unconscious biases, and toxic work culture.?

Furthermore, they are still stuck in lower-level positions as they’re less empowered than their male peers, making breaking through the proverbial glass ceiling hard.

This has led to more women seeking alternative avenues to create their own opportunities, take control of their careers, and achieve flexibility. By venturing into entrepreneurship, women can work on closing the gender gap in the workplace, as employers will be forced to take a proactive approach to fighting bias. Entrepreneurship will also help women create a work environment that values and supports them and their needs.