The pandemic saw many women drop out of the workforce, but quite a few of them started their own businesses.
TechRepublic's Karen Roby spoke with Melanie Chase, CMO at NEXT Insurance, about women in the workforce after the COVID-19 pandemic. The following is an edited transcript of their conversation.
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Melanie Chase: At NEXT we are an InsurTech company that provides insurance to small businesses, and we do it fast, we do it affordably, we do it entirely online. And our mission is to help entrepreneurs thrive. Coming out of this pandemic period, we wanted to do a study on how small businesses were feeling, how they were thinking, what they needed in this post-pandemic world. We talked to 500 small business owners, and we had some really interesting findings. One of those findings that stood out was that women in our study were twice as likely to open small businesses during the pandemic than their male counterparts. We thought this was a really important piece of information. I think all of us have read the disheartening statistics about how many women left the workforce during the pandemic citing reasons of needing to care for their kids, take care of their families, lost wages, lack of flexibility. And I think we've all been wondering sort of, what is the long-term impact of these trends?
What we saw in this study of millions of women overall starting new businesses really gives us a sense of how the economy might be shifting. In 2020, 4.3 million Americans started new businesses, this was a record year for new business registrations in the United States. And if we think about that in terms of how many of those new businesses are coming from women, we can imagine a world where maybe the access to a flexible work-life balance can come from the individual themselves, can come from women who want to create their own path forward.
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Karen Roby: I think that's the silver lining here, Melanie, is it's actually the opposite of what you think it would be, I think, following a pandemic. But it sounds like just women saying, "OK this is my time, this is my opportunity to possibly put together a better work-life balance."
Melanie Chase: When we ask people why they started small businesses, the number one reason is always to follow up passion or to be my own boss. But what we did see was that women were four times more likely to say flexibility was the number one reason that they wanted to start their own business.
Karen Roby: Melanie, when you guys did this study, did you look at a specific industries heavily weighted in tech, I would assume?
Melanie Chase: We did look at what types of businesses were being started. When we looked across men and women, there were a lot of similarities. There was a lot of professional-services businesses starting, a lot of retail and e-commerce, some childcare and education businesses being started. But what we found among women is that they were very digitally focused. They also often tended to start their businesses alone. So, 57% of women started their businesses as solo entrepreneurs, where 42% of men started their businesses solo. Women were also more likely to start from scratch, we saw men buying into businesses, for example. So we do see differences in the way that men and women are starting out and we think that that digital focus and focus on flexibility might be part of that story.
Karen Roby: I think that's so interesting, Melanie, that it was more women decided to do this alone and start their own company versus men. When you look at the future of say, six to nine months down the road, how does this information change the way you see things will be going from here?
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Melanie Chase: I think this access to starting your own business has really opened up. What we see is also a generational trend. So if we look at baby boomers and Gen X, a lot of these folks shifted into digital as part of the pandemic. Whereas Gen Z and millennials were starting digital first businesses, but this was a sort of a generational snapshot. And I think as we look forward, a lot of businesses are going to be starting digitally. A lot more folks are going to be starting from an e-commerce perspective. They're going to be focusing on building their brand online as one of their first steps, that's what we saw among Gen Z and millennials. The first thing they do is think about building their brand, building that brand online. And so I think it does those change the access.
I think it also changes the way that people are going to be thinking about what a work day might look like for the long term. This idea of being your own boss is a major inspiration for small business owners to get started. What it means is I can shape my life the way I want it to look, I can follow my passions and I can spend my time the way I think I need to spend it. And we think this is going to become more and more an expectation of people who work in the United States.
Karen Roby: That's some good news, especially for women, Melanie.
Melanie Chase: I think that can be the silver lining that we can look for going forward.
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