And why women leaders may be best equipped to navigate uncertain times.
One question I’ve been repeatedly asked since I’ve been touring the country talking about my book, When Women Lead, is this: What will happen to women if the economy tips into a recession? Though the jobs market remains robust, a weakening housing market and high inflation have prompted the Federal Reserve to raise interest rates to curb inflation. And the higher interest rates climb, the more economic growth could be slowed. Now experts are debating not whether we’ll see an economic downturn, but how severe and long that downturn will be. I’m the author of a book on female leadership and a business reporter who covers technology and media for CNBC — I’m not an economist and I can’t predict what will happen with the economy. But I do know that concerns that a recession will hit women harder than men are very valid after the pandemic set off what’s been called a “she-session.”
Here’s what you need to know about recessions and women, and why I’m optimistic about the ability of female leaders to persevere and succeed.
The pandemic’s “she-cession”
The pandemic disproportionately took women — particularly mothers — out of the workforce, creating what has been called the first-ever she-cession. In the first 10 months of the pandemic, women lost 5.4 million jobs, one million more job losses than men suffered. Before the pandemic, the number of working women — especially working mothers — was on the rise, but women are more likely to hold roles that require in-person work, including low-wage service occupations. This meant that during the pandemic many women were either asked to work in dangerous conditions or were laid off. Plus, with the additional burden of caregiving traditionally falling on their shoulders, women were more likely than men to drop out of the workforce to care for children and elderly parents. (The sociologist Jessica Calarco put it eloquently: “Other countries have social safety nets. The U.S. has women.”)
This disproportionate damage to women in the workforce of the pandemic-sparked economic downturn stands in contrast to how economic downturns typically work. In past recessions, men have seen much greater job losses than women have, in part because downturns tend to impact industries such as construction and manufacturing, which employ more men. In the 2008-2009 financial crises about three-quarters of the jobs that were lost were held by men. That’s why the fact that women suffered more than men during the pandemic — and working mothers suffered most of all — is so notable. And that’s also why this coming downturn — especially if there are no more Covid lockdowns — is unlikely to have such a dramatic and disproportionate effect.
Why women are well-equipped to navigate this downturn
As inflation prompts recession concerns and we face so many unpredictable variables caused by the pandemic, women — especially women leaders — may have exactly the right skills and strategies to navigate these uncertain times. I have found in my work researching female leaders and their distinct traits for my book When Women Lead that they tend to be far scrappier and are able to do more with less. They’re more likely to lead with a communal (rather than top-down) approach and bring in diverse perspectives from across their organization. They rank higher than men in adaptability, empathy, and an eagerness to embrace gratitude, all traits that have been found to enable leaders to plan for the long term. All of these strategies and traits can enable resilience in the toughest of times.
The latest research bears out my optimism, too.
Women business owners are confident they can weather the storm
77 percent of women business owners say their businesses are equipped to survive a recession, according to Bank of America’s 2022 Women and Minority Business Owner Spotlight. They’re slightly less optimistic than men (in my book I discuss gender differences in confidence, particularly in times of crisis) but 63 percent expect revenue to increase in the next 12 months (compared to 68 percent of male business owners), and nearly half plan to expand their business. The women surveyed say they face more challenges than their male counterparts (59 percent say they have to work harder for the same success as men). And 29 percent of women business owners say they don’t think they will ever have equal access to capital (82 percent of all venture capital dollars went to male-only founding teams in 2021).
One reason women are thriving and may be better equipped to navigate new uncertainty is that they’re leaning into the digital potential for their small businesses. Meta’s Global State of Small Business Report found that women-owned small and medium businesses use digital marketing tools at least 10 percent more than their male counterparts. That study also found that about a quarter of women-owned small and medium businesses reported that over half of their business came from digital sales, compared to just 14 percent of men who had that amount of digital revenue.
Female leaders communicate better during times of crisis
And then there are those advantages of female leadership styles that are particularly essential in times like these. In October S&P Global released a report that found that women CEOs frequently use terms associated with positive communication and more often talk about diversity, empathy, adaptability, and transformation. Since the beginning of the pandemic female leaders have increasingly leaned into these styles as they found them important and resonant. This empathetic, adaptable leadership is found to benefit a broader range of people both inside a company (such as employees) and outside a company (such as customers). One thing that’s particularly key about the way women are tackling challenges now is that they’re more likely to emphasize a vision that goes beyond their self-interest.
Now more than ever people want to feel a sense of purpose. If women are more likely to inspire their employees and attract customers with that purpose — something that extends beyond profits — they’ll have an advantage no matter what happens with the economy.
Julia Boorstin is the senior media and tech reporter for CNBC and author of the new book WHEN WOMEN LEAD: What They Achieve, Why They Succeed, How We Can Learn From Them.
