42 Small Business Statistics: Everything You Need to Know

42 Small Business Statistics: Everything You Need to Know
ByJulija A.
August 26,2021

From eCommerce stores and brick-and-mortar boutiques to finance consulting, art galleries, and craft breweries, small businesses are as varied as they are numerous. With around 534,000 new businesses started every month, it’s obvious that the market is highly competitive, and that living out the dream of being your own boss might not be quite as easy as it seems. So, what can you do? 

If you have your own company (or plan to start one soon), then the best way to make a sound business plan is to familiarize yourself with a few small business statistics. Learning the ins-and-outs of the industry and how other similar firms made it work can help your own company grow and thrive. After all, small enterprises are the backbone of the American economy, and every person with an idea and the drive to succeed should be given a proper chance to better themselves professionally. 

If you don’t want to read through a bunch of boring research papers, don’t worry—we’ve got you covered. For those readers who are looking for quick answers, we’ve also prepared a small 

FAQ section at the end of the article. If you’ve been wondering about questions like how long do small businesses last, how many small business jobs are generated each year, and why are small businesses important for our economy, you can find all the answers after the stats. 

So, without any further ado, here’s a detailed list of some of the most useful stats for business owners and future entrepreneurs. 

Practical Small Business Statistics for Your Company

  • 82% of businesses that fail do so because of cash flow problems.
  • Small businesses employ 59 million people in the U.S.A.
  • 50% of all small businesses are operated from home.
  • 84% of small business owners indicate that they’re feeling optimistic about the future of their companies.
  • 64% of small business owners begin with only $10,000 in capital.
  • Approximately a quarter of small businesses begin with no financing whatsoever.
  • Only 40% of small businesses are profitable.
  • Only 64% of small businesses have their own website.

General Small Business Stats

The Small Business Administration defines a small business as a firm with fewer than 500 employees.

(SBA.gov)

In Australia, any business that has fewer than 15 employees is considered a small business under the Fair Work Act. In the European Union it’s under 50, and in America it’s under 500. The numbers vary across the world, but the definition is the same—it’s any business with fewer employees and revenue than the average corporation.

There are 30.2 million small businesses in the U.S.A.

(SBA.gov)

According to the US Census Bureau, in 2017, small businesses employed 47.5% of the entire country’s workforce. That number keeps rising by the day. Given that it can take as few as six days to file the paperwork and open up your own company in America, it’s no wonder people are eager to jump at the opportunity. If you’re thinking of starting your own venture, bear in mind that you’ll be facing stiff competition from all sides.

Small businesses account for 99.7% of all businesses in the U.S.A.

(Fundera)

Small business stats show that the majority of businesses in America have fewer than 500 employees. Firms with fewer than 100 employees account for 98.2%, and those with fewer than 20 employees account for 89%.

Micro businesses account for 75.3% of private-sector employers.

(SBA.gov)

A micro enterprise employs nine people or fewer, and this is the most common kind of private-sector business in the U.S. Small business statistics show that while this might be the most common kind of enterprise, its share of employees is very small, providing only 10.5% of all private-sector jobs.

Analysts predict that half of the workforce will be freelancers by 2020.

(Forbes)

A lot of small businesses hire full-time workers even when they don’t have enough work to make it worthwhile. Freelancers are usually a much better investment, especially for a company that’s just starting out and can’t find the resources to pay full-time employees. Luckily, the number of freelancers is on the rise, which gives small companies a great opportunity to find professionals at an affordable price.

19% of small business owners work over 60 hours a week.

(Fundera)

Small business statistics indicate that most owners work hard to make their company succeed, particularly when they’re just starting out. Indeed, it’s not uncommon for bosses to work 60-hour weeks. Stats show a whopping 89% have a habit of working weekends, while 81% work nights.

50% of all small businesses are operated from home.

(SBA.gov)

Given that 290 million people in the U.S.A. have access to the internet, it’s a lot easier to work from the comfort of your own home. This is especially true for sole proprietorships where owners don’t have to worry about finding space for multiple employees. However, one of the challenges of home-based businesses is running an effective marketing campaign, so owners need to be organized and advertising-savvy if they want to build a good customer base.

Small businesses employ 59 million people in the U.S.A.

(SBA.gov)

US economy statistics show us that small businesses have always been an important part of both our culture and our success. They contribute to the local economy by bringing stability, jobs, and financial growth, and they can offer a more diverse inventory or specialize in unique services. Whether they remain small or grow into large corporations, these kinds of companies also contribute to the government’s budget through taxes.

Small Business Growth Statistics & Small Business Financing

84% of small business owners indicate that they’re feeling optimistic about the future of their companies.

(StartBlox)

Despite the sheer number of other small businesses and the heavy competition they face, most owners actually feel very optimistic about their future. Companies expect growth in the upcoming years, and they aren’t afraid to put in the hard work needed to succeed.

The health care and social assistance industries are projected to grow by 21%.

(Fundera)

According to the Bureau of Labor Statistics small business failure rate, the healthcare and social assistance industries are the most stable for start-ups, where 85% of businesses make it past the first year.

Technology, health, and energy are the top businesses to start now if you want to be rich in a decade.

(Fundera)

Tech, health, and energy are not the biggest industries out there, but right now they’re the most lucrative ones. If you planned to start your business in one of these sectors, your services are bound to be in high demand.

64% of small business owners begin with only $10,000 in capital.

(Intuit)

Small business stats show that the average amount of capital needed to get a company going is around $10,000. This doesn’t sound like much, but for those managing their business from home it can be more than enough to set everything up, especially if they don’t intend to hire many employees.

Micro businesses can get off the ground with just $3,000 in capital.

(LendEDU)

How much capital you need to start a business depends on a lot of factors, but research shows profitable small businesses can be financed for as little as $3,000.

Approximately a quarter of small businesses begin with no financing whatsoever.

(LendEDU)

It might surprise you to know that a lot of small businesses succeed despite starting off without any money behind them.

The average small business loan is worth $633,000.

(Fundera)

This should give you a rough idea of how much money you might be able to get to start your business. Bear in mind, though, that the actual amount you receive will depend on a range of factors, including your own credit history. Those with less than perfect credit scores need not necessarily despair — there are plenty of lenders willing to assist when starting a business with bad credit.

The average SBA loan was $107,000 in 2017.

(Fundera)

SBA loans are issued by banks but guaranteed by the Small Business Administration. If you meet all the criteria, you might be able to apply for one and get a lump sum to finance your business endeavor.

Small Business Revenue Statistics

86.3% of small business owners earn an annual salary of less than $100,000.

(Fundera)

As you’d probably expect, small business owners rarely make as much money as CEOs of big corporations. They usually make less than $100,000 a year, but what’s even more surprising is that 30.7% don’t take any salary at all.

Only 40% of small businesses are profitable.

(SmallBizTrends)

While 40% of businesses start to become profitable at one point, 30% start losing money, and 30% break even.

In 2018, 9% of small businesses made more than $1 million.

(Business Know-How)

The most profitable small businesses made over $1 million last year, while the least profitable 16% made less than $10,000.

Small businesses with two founders raise 30% more money on average.

(Serious Startups)

Having a partner means sharing the burden of management and finances with someone else. It also increases your chance of earning more money and makes you 19% less likely to scale too fast. Growing your company before you’re ready can mean losing businesses later on, so it’s important to pace yourself and follow the plan.

Small Business Failure Statistics & the Biggest Small Business Challenges

50% of small businesses survive for at least five years.

(Fundera)

Contrary to popular belief, failure rates are not quite as dire as they appear. Two-thirds of all businesses survive for at least two years, while around 33% survive over ten years. While the competition is certainly stiff, a consistent business plan can help you stay on top of the game and build your company from the ground up.

On average, one in 12 businesses closes every year.

(LendEdu)

How many small businesses fail? Apparently, the average is just below 10% – one in 12, to be precise. This might not seem like an overly encouraging stat, but bear in mind that with the right funding, adaptability, and knowledge, you can avoid the common pitfalls of owning a small business and push past the start-up stage. Establishing your company is by no means easy, but it is absolutely achievable.

82% of businesses fail because of inconsistent or insufficient cash flow.

(Fundera)

What is the primary reason that so many new businesses fail? Cash flow is the culprit here. Companies that run seasonal businesses encounter this problem more frequently than others. For example, a gardening company that gets the majority of its work during the warm months might struggle to scrape by during the off-season. Utilizing the services of invoice factoring and analyzing cash flow statements can help fix this problem.

27% of businesses aren’t able to receive the funding they need.

(NSBA)

No financing often means no sales and not enough money to hire the workers you need. A certain percentage of businesses that fail seem to do so because they can’t fund further business endeavors, which prevents them from growing. Financing should always be a top priority, regardless of what kind of company you’re trying to run.

42% of failed small businesses offer products or services that don’t bring anything new or useful to the market.

(Fundera)

The main purpose of a business is to fulfill its customers’ needs. If no one wants or needs your services, it’s unlikely that your company will manage to hold its ground. There is a great percentage of startups that fail because they don’t provide anything original to consumers in a competitive market. Without a product that stands out, they can’t increase their sales enough to finance their own growth.

19% of small businesses fail because of their competition.

(CBInsights)

Not paying attention to what your competitors are doing is one of the biggest mistakes you can make. Companies that perform effective competition research are more likely to adapt and improve their services to get ahead. By impressing their customers, they give themselves a better chance of succeeding.

23% of small businesses fail because they don’t have the right team running the business.

(Business Insider)

The startup failure rate shows us that good management is essential to surviving your first years in business. If you don’t have the right kind of professionals to help you stay on top of your finances and help you organize other aspects of your daily workflow, you won’t be able to focus on getting new customers. But it’s not just management that you need to focus on—having competent and hard-working employees is also important.

17% of small businesses fail because they lack a business model.

(CBInsights)

It’s surprising how many startups fail because they don’t have a business model. After all, it’s practically impossible to start and maintain a successful company without a well-developed plan. Simply having an idea is not enough—you need to define objectives and predict your income stream if you want to make it. A business plan is especially important for companies that are seeking investors; most people won’t even consider financing you without a clear vision.

14% of small businesses fail because of poor marketing.

(CBInsights)

You might have managed to create a great product that’s better than anything your competitors could ever offer. But if you don’t advertise it effectively, no one will buy it.

Only 35% of businesses in the construction industry survive their fifth year.

(Fundera)

Construction companies are among the toughest businesses to manage, as their extremely high failure rate suggests. While 75% manage to survive their first year, the majority can’t seem to push past the five-year mark.

Business Trends for Women & Minority Populations

There are 12.3 million businesses owned by women in the U.S.A. 

(WBENC)

Since 2007, the number of women-owned businesses in the United States has increased by a whopping 58%. Now, women-owned businesses employ more than 9.2 million people across the country.

Businesses owned by women generate $1.8 trillion in revenue. 

(WBENC)

While this number looks impressive, it actually only represents 4.3% of total private-sector revenue. It’s clear that, despite all the progress women have made, there’s still a long way to go before we achieve gender equality in the workplace.

46% of African American small business owners are the only employee in their own firm. 

(Guidant Financial)

Small business statistics show that nearly half of businesses owned by African American people have one employee only, while 41.2% employ between two and give workers. Only 13% have more than six employees. While the number of African American business owners is on the rise, a lot of firms still struggle to find enough capital to hire employees.

Veterans comprise 9.1% of the small business owners of America. 

(Small Business)

Veterans own more than 2.5 million businesses in the U.S., and 2.08 million of those are entirely self-operated businesses with no employees. Technical services and construction are the most common industries in which veterans own businesses.

Immigrants own 25% of new businesses in the U.S.A. 

(Forbes)

A quarter of all small business owners are immigrants who have arrived in the country in pursuit of the American dream. When you consider how many small businesses in the US there already are, this is a significant number. In certain states, such as California and New York, this number is over 40%. However, in others, like Idaho, it’s less than 5%.

Immigrants have founded 55% of the unicorn startups in the U.S.A. 

(NFAP)

More than half of all billion-dollar companies in America were founded by immigrants, the most notable being Uber, co-founded by a Canadian immigrant called Garrett Camp. SpaceX, Avant, and Palantir Technologies are some other examples of exceptionally successful immigrant-run firms in America.

Marketing & Small Business Firms

47% of businesses emphasize marketing as their top growth strategy. 

(StartBlox)

Small business trends show us that companies are becoming more aware of the importance of advertising. Roughly 47% of them plan to invest in marketing efforts, followed by the 33% whose primary focus is developing strategic alliances with business partners.

Only 64% of small businesses have their own website. 

(Clutch)

We live in a digital world. It’s almost unthinkable that a firm could function without a website these days, and yet more than one-third do. The accessibility of website builders nowadays means there’s even less of an excuse to skip this crucial step. Most companies, regardless of which industry they operate in, can benefit from advertising their business online. Given that a lack of marketing strategy is a major contributing factor to the small business failure rate, creating a website is a necessity.

92% of business owners believe having their own website contributes effectively to their digital marketing strategy. 

(Iron Paper)

Fortunately, while not all owners have a website, most understand that their business needs one. This shows a certain willingness to adapt to modern times and invest more resources into advertising.

31% of small business owners identify driving sales as their top marketing goal. 

(Keap)

The average small business revenue depends largely on sales, so most firms are making this their priority in the near future. This is followed by 24.6% of businesses, which are focusing on boosting customer retention and engagement, and 17.1% that want to build brand awareness. Finding the time and resources to build a good marketing campaign can be tricky for most owners. However, the efforts tend to pay off in the long run.

70-80% of people research a small business before visiting or making a purchase. 

(Blue Corona)

Most successful small businesses understand that customers these days need to research a company before they feel confident about making a purchase. One of the easiest ways for people to look into your business is to check out your website and social media profiles, then read the reviews left by other customers. Investing in reputation management services can help you present your firm in the best possible light and make it easy for consumers to trust you.

61% of small businesses invest in social media marketing. 

(Clutch)

Considering the number of small businesses in the US, social media marketing can be a great way to stand out from the crowd. Most of your customers tend to have accounts on platforms like Instagram, Facebook, and Twitter. If your company doesn’t, you’ll struggle to compete. A solid social media strategy can help you inform your customers about important deals or events, and can also serve as an easy way to get in touch.

FAQ
What is considered a small business?

A small business is a privately held corporation or a sole proprietorship. It has fewer employees and earns less yearly revenue than a large business, but the exact definition varies from industry to industry. For example, the agriculture industry classifies small businesses as those with less than $750,000 in annual receipts on average, while the construction industry’s maximum is $36.5 million in average receipts annually.

It’s important to define exactly what small businesses are in order to protect and promote them. The government usually grants special subsidies and benefits to help the little firms compete against the big market-share holders in their industry. They can also generally get bank loans sooner and more easily.

Why are small businesses important to the U.S. economy?

Small businesses are important to the U.S. economy because they make a significant contribution to the yearly GDP while also creating job opportunities, especially for disadvantaged minority communities. They also spark innovation and bring original ideas and products to the market.

Small businesses also complement the economic activity of larger organizations. Many offer important B2B services like accounting, web design, and legal services. Others offer niche products and services; for example, it’s usually small businesses that build specific car parts for large auto manufacturers. An average car has anywhere between 28,000–30,000 parts if you count each nut, bolt, and screw. Most of these parts are produced by small companies who then sell them to larger firms.

What percentage of the economy is small business?

Small businesses account for 44% of economic activity in the U.S.A. according to the latest available report from 2014. While their overall market-share has decreased over the years, they’re still an important part of our financial system. Small businesses’ share of GDP has fallen from 48% to 43.5% over the years. According to the SBA Office of Advocacy, this decline can be attributed to the fast growth of large businesses and the Great Recession.

Approximately what percentage of the jobs in the United States do small businesses provide?

There are 30.2 million small businesses in the U.S.A., and they make up 47.5% of the private workforce. Small businesses created 1.9 million jobs in 2015, and they keep contributing to local communities by providing employment and financial stability to many.

Small companies tend to hire more often than big ones because they need employees to grow and expand. Unfortunately, small firms also have a lower survival rate, meaning workers sometimes lose their jobs because of business closures.

How many small businesses start each year?

Around 627,000 new businesses start every year according to 2008 statistics, which are the latest available stats on this subject. This includes sole proprietorships, partnerships, and corporate entities.

One of the reasons so many new businesses open each year is the relative ease of getting started. In America, you can get most of the paperwork and licenses you need in as little as six days. The process is particularly easy for at-home sole proprietorships because owners don’t have to worry about hiring employees or finding the right location for their business.

What is the success rate of small businesses?

It’s difficult to calculate how many businesses are successful because it largely depends on the industry. For example, finance, insurance, and real estate seem to be doing particularly well—58% of these companies still operate after four years. Information companies have the highest failure rate—only 37% of them are successful after four years.

In general, 40% of companies are profitable, 30% break even every year, and 30% continue to lose money.

What is the survival rate for new businesses?

According to Fundera, 50% of small businesses survive for at least five years, while 80% survive the first year. The older your company is, the harder it can be to maintain your business. Federal income taxes, strict government regulations, and healthcare-management for employees are some of the biggest challenges small business owners have to face, and dealing with these problems is the top priority for many firms.

Conclusion

The competition is stiff, but most owners have a positive outlook on the future. While you’re likely to face challenges along the way, these small business statistics show that it’s possible to run a company successfully when you know what to expect.

Use this knowledge to create or modify your existing business plan, and start growing your business one step at a time.

About author

Julia A. is a writer at SmallBizGenius.net. With experience in both finance and marketing industries, she enjoys staying up to date with the current economic affairs and writing opinion pieces on the state of small businesses in America. As an avid reader, she spends most of her time poring over history books, fantasy novels, and old classics. Tech, finance, and marketing are her passions, and she’s a frequent contributor at various small business blogs.

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Diversity and inclusion are some of the most important policies that can not only improve the working environment and enhance employee engagement but significantly contribute to all other aspects of any business. The benefits are numerous, and we will discuss them as we unveil some of the most interesting diversity in the workplace statistics. Being a diverse company means hiring people of different ethnicities, gender, age, religion, etc. Companies that have successfully implemented D&I initiatives are often seen as more desirable for employees due to their broader perspective and the positive attitude they cherish. We have done our research, and these are some of the reasons everyone should embrace diversity. Editor’s Choice of Diversity in the Workplace Statistics In 2019, millennials accounted for 35% of the US labor force. Only 8% of CEOs at Fortune 500 companies are female. Diverse companies are 70% more likely to acquire new markets. 46% of Hispanic and 39% of black women earn less than $15 an hour. During the COVID-19 pandemic, fathers who worked remotely were promoted three times more than women in the same position. General Workplace Diversity Data and Stats In 2020, only 17.9% of persons with disabilities were employed in the US. (US Bureau of Labor Statistics) Based on the report published by the US Bureau of Labor Statistics, in 2020, the unemployment rate for persons with disabilities grew compared to the previous year. In 2019, the percentage of employed persons with disabilities in the US was 19.3. However, those numbers dropped to 17.9 the following year.  Regarding people without disabilities, the report stated 66.3% of them were employed during 2019, but the numbers decreased to 61.8% in 2020. These rates show that there is still much work to be done to overcome the lack of diversity in the workplace, and statistics will need to include more people with disabilities in the workforce going forward. By 2024, it’s expected that 24.8% of the US workforce will be employees older than 55. (Deloitte) It’s not a secret that the US workforce is aging each year. Research on shifting workforce demographics, conducted by Deloitte, suggests that by 2024 employees aged 55+ will make up 24.8% of the workforce. This might not mean much to you, but it is a severe increase if we go back to 1994 when this percentage was significantly lower, or to be precise, 11.9%. The research also projects that the US workforce diversity statistics are about to change and, by 2024, less than two-thirds of the labor force will be defined as “white non-Hispanic.” Back in 1994, over 75% of the labor force fell into that category. In 2019, millennials accounted for 35% of the US labor force. (Pew Research Center) Millennials are all those born between 1981 and 1996, and back in 2019, they accounted for over a third of the US labor force. In 2016, the millennial generation surpassed Generation Xers and became the largest population in the US labor force.  According to research from 2019, Millennials are expected to comprise 75% of the global workforce by 2025.  Gender Diversity in the Workplace Statistics Only 8% of CEOs at Fortune 500 companies are female. (Statista) The gap between male and female leadership roles has always been a thing, and there are multiple statistics to confirm that. However, it looks like things are changing for the better. As Statista confirmed earlier this year, there’s been a new record when it comes to female CEOs. As of June 14, 2021, there were 41 female CEOs employed at Fortune 500 companies. According to the statistics, this wasn’t the only record that got broken. For the first time ever, two black women are running America's 500 highest-grossing companies, giving us hope that gender diversity on executive boards might become a reality in the not-so-distant future. In terms of the median salary in the US, women earn around 18% less than men. (PayScale) The gap between the leadership roles isn’t the only hurdle that women are facing in business nowadays. PayScale, a company that helps employers and employees understand the appropriate pay for every position, reviewed these issues in its Gender Pay Gap Report for 2021. According to this report, women earn only $0.82 for every dollar a man makes. Although it might sound discouraging, this is a slight improvement compared to 2020, when they earned one cent less, as per employment diversity statistics. Also, bear in mind these are uncontrolled pay gap statistics - when doing the same job with the same qualifications, the numbers are less dire: women earn 98 cents for every dollar a man does. During the COVID-19 pandemic, fathers who worked remotely were promoted three times more than women in the same position. (CNBC) The ongoing COVID-19 pandemic has affected all aspects of the business as we know it. Many had to adapt to the new reality and switch to their home offices instead. According to a CNBC report, 34% of men with children working from home received some kind of promotion during this period.  On the other hand, women’s jobs have been hit much harder by the pandemic. According to an analysis conducted by the National Women’s Law Center, of the 1.1 million workers ages 20 and over, who left the labor force between August and September of 2020, 865,000 were women. Racial and Cultural Diversity in the Workplace Statistics 46% of Hispanic and 39% of black women earn less than $15 an hour. (The Washington Post) In 2019, around 39 million people earned less than $15 per hour. These 39 million employees made about 28% of the workforce at the time, and the majority of the low-wage category consisted of Hispanic and black women. In fact, they were more than 2x as likely as white men to fall into this wage category.  Based on the Washington Post’s research on diversity in the workplace, statistics haven’t really changed since 2019. Roughly 46% of Hispanic women and 39% of Black women still make less than $15 an hour. On the other hand, only 18% of White and Asian men hover around this wage bracket. More than 90% of all Google employees are white or Asian men. (Statista) According to Statista, the distribution of Google employees in the US from 2014 to 2021 does not look very racially or gender-diverse. The data for 2021 shows that white men account for 50.4% of employees, with Asian men following with 42.3%. On the flip side, only 4.4% of the employees are black men and women. If you look at the timeline of these statistics on diversity in the workplace, you will see the Asian population is experiencing steady growth, while the white population dropped from 64.5% in 2014 to 50.4% in 2021.  In 2019, black people held only 3.2% of senior leadership roles in large organizations in the US. (Coqual) “Being Black in Corporate America” is the name of Coqual’s intersectional exploration aimed to show if and how things have changed for the black people in the US during the past few years. The research on the representation of black adults in the US has shown that only 3.2% of black people held senior leadership roles in major companies, with just 0.8% of them being Fortune 500 CEOs. Benefits of Diversity in the Workplace Statistics Diverse companies produce 19% more revenue than those with non-diverse leadership. (Forbes) A study by the Boston Consulting Group (BCG), published in 2018, has found that diverse leadership increases the bottom line for companies. According to the study, increasing the diversity of leadership teams can lead to improved financial performance and better innovation. The study included 1,700 companies of all sizes across eight different countries. These findings are important as they show that diversity isn’t just an inclusion metric but an integral part of any successful business. In 2019, gender-diverse companies were 25% more likely to outperform their competitors. (McKinsey) Various diversity in the workplace stats show just how important diversity is and how it can help boost the overall performance of businesses of all sizes. Based on the findings from McKinsey’s research in 2019, companies with gender diversity have 25% higher chances to achieve higher profits than those with less gender diversity on the executive boards. Ethnic diversity in leadership teams is another vital factor. According to the report, companies implementing ethnic and cultural diversity on the executive level have a 36% likelihood of outperforming the competition.  Diverse companies are 70% more likely to acquire new markets. (Harvard Business Review) (Josh Bersin) Establishing a diverse workplace is vital for all modern organizations, and there are many diversity in the workplace statistics that prove this. Diverse companies also have 2.3 times higher cash flow per employee. They are also far better at capturing new markets when compared to the companies that do not practice diversity hiring.  80% of US job candidates look for inclusion when choosing an employer. (Deloitte) Salary and working hours aren't the only deciding factor when it comes to choosing a new employer. Back in 2017, Deloitte published a research paper that surveyed more than 1,300 full-time employees from a range of organizations all across the US. The paper showed just how important diversity and inclusion initiatives are by showing that four-fifths of all employees look for an inclusive workplace. 39% of respondents confirmed they would quit their current job if they found a more inclusive working environment, while 23% indicated they already left a job for that very reason.
By Nikolina Cveticanin · October 04,2021
Women account for 50.8% of the US population, hold 57% of all undergraduate degrees, and approximately 60% of all master’s degrees. And even though they hold about 52% of all management-level jobs, American women cannot keep pace with men in terms of representation when it comes to top leadership roles.  As male vs. female CEO statistics show, it’s the profit and loss roles or P&L responsibilities such as leading a brand, unit, or division, that set executives on the track to becoming a CEO. On the other hand, women who advance into C-suites - the “chief” jobs in companies - typically take on the roles such as head of human resources, legal, or administration. Although all of these functions are extremely important, the line of work they focus on doesn’t involve profit-generating responsibilities, which rarely makes them a path to running a company. Why does the percentage of CEOs that are female remain low in all parts of the world? There isn’t a simple answer to this question. Several studies have shown that it’s the fusion of work-life constraints, early professional trade-offs, and firmly established attitudes towards women in power and the skills and traits that make a good leader that can explain why the careers of equally ambitious and capable men and women often take such different turns. Let’s take a look at some of the most interesting findings. Male vs Female CEO Statistics - Editor’s Choice Female CEOs are running 41 Fortune 500 companies. There are two Black women among the Fortune 500 CEOs. Women made up only 5% of the CEOs appointed in 2020 globally. At the CEO level, men outnumber women by approximately 17 to one.  59% of male employees aspire to become CEOs versus 40% of women. 77% of women say the biggest obstacle to gender equity at the workplace is the lack of information on how to advance. Between 2015 and 2020, the share of women in senior vice president roles in the US increased from 23% to 28%. (McKinsey & Company) Over the same period, the percentage of women in the C-suite went up from 17% to 21%. All women, especially those of color, remained significantly outnumbered in senior management positions. However, prior to the start of the coronavirus pandemic, the representation of female workers in corporate America was slowly trending in the right direction.  According to 2020 statistics on female CEOs in the United States, 21% of C-suite members were women.  (McKinsey & Company)  Based on the survey results published by McKinsey & Company, there’s a leaky pipeline for women in leadership. In 2020, female workers accounted for 47% of entry-level positions, 38% of management roles, and 33% senior management/director roles. Women were entrusted with under one third (29%) of all vice president positions in American organizations. For every 100 men who got promoted to a managerial role, only 85 women advanced to the same position, based on the 2020 data.  (McKinsey & Company) This gap was even larger for women of color as only 71 Latinas, and 58 Black women received a promotion. Consequently, women remained underrepresented at the managerial level holding just 38% of manager positions, while men accounted for 62%. Male vs female CEO statistics from 2020 indicate that 39% of senior-level women burned out compared to 29% of men. (McKinsey & Company) Furthermore, 36% of women felt pressured to work more, in comparison with 27% of men. At the same time, 54% of C-suite women reported that they constantly felt exhausted, and so did 41% of men in similar positions. More than 50% of women in senior leadership roles promote gender and racial equality at work, in comparison with approximately 40% of male top executives. (McKinsey & Company) Women in leadership positions are more likely than men in senior-level roles to take a public stand on racial and gender diversity and champion the advancement of employee-friendly programs and policies. Women CEOs are also more likely to sponsor and mentor other female workers. According to the results of a recent survey, 38% of women in senior-level positions currently mentor or sponsor at least one woman of color, compared to only 23% of men in the same roles.   Female CEOs are running 41 Fortune 500 companies. (Fortune, Statista) In 2021, the number of women appointed to CEO positions in America's 500 highest-grossing companies reached an all-time high. However, the new record still only translates to approximately 8% of female representation at the top of the country's largest public businesses.  On the plus side, the number of women CEOs of Fortune 500 companies almost doubled in comparison with 2018 when there were 24 females leading the nation’s biggest businesses. Calls for diversity and inclusion in the highest echelons of America’s business world are starting to bear fruit as the number of female Fortune 500 chief executive officers increased for the third consecutive year. The top five biggest female-led Fortune 500 businesses as of August 2021 are CVS Health (rank four), Walgreens Boots Alliance (rank 16), General Motors (rank 22), Anthem (rank 23), and Citigroup (rank 33).  Speaking of women in leadership roles, statistics show that there are two Black women among the Fortune 500 CEOs. (Fortune) For the first time, two Black women are running Fortune 500 businesses - Roz Brewer of Walgreens Boots Alliance (rank 16) and Thasunda Brown Duckett of TIAA (rank 79). Before Duckett and Brewer started their new jobs in 2021, only one Black woman - Ursula Burns, former Xerox chief - had ever been appointed CEO at a Fortune 500 business on a permanent basis. After Burnes stepped down from the role in 2017, and, with the exception of Bed Bath & Beyond's Mary Winston, who worked as interim chief for a few months in 2019, Black female chief executive officers have been missing from the Fortune 500 list ever since. Citigroup CEO Jane Fraser is the first woman to run a major Wall Street bank. (Fortune) Fraser’s appointment marked huge progress for the financial industry. Much like Dick's Sporting Goods chief Lauren Hobart, Clorox chief Linda Rendle, new Coty CEO Sue Nabi, Walgreens Boots Alliance’s Roz Brewer, Thasunda Brown Duckett of TIAA, and CVS’s CEO Karen Lynch, Fraser took over from a male CEO. Statistics on Fortune 500 CEOs by gender reveal that there were only 37 female and 463 male chiefs leading America’s highest earning businesses in 2000. (Fortune) The number of women in CEO positions in the Fortune 500 hasn’t been growing steadily throughout the last two decades. There were 24 female chiefs in 2015, 21 women CEOs in 2016, and 32 women running Fortune 500 businesses in 2017, while that number dropped to 24 in 2018.  At the median, 16 female CEOs earned $13.6 million in 2020, in comparison to $12.6 million for the 326 men included in a study. (Equilar) According to a study published in May 2021 comparing a male CEO salary vs. a female CEO salary, women have outpaced men in total pay but remained underrepresented in executive positions. Equilar’s study indicates that Lisa Su, the chief executive officer of Advanced Micro Devices, was the highest-paid woman for the second consecutive year and the highest-paid CEO overall in 2020.  Globally, women made up only 5% of the CEOs appointed in 2020. (Heidrick & Struggles) The highest percentage of newly-appointed female CEOs was in Ireland (15%), while the lowest was in Brazil (0%). This is according to a paper that analyzed the backgrounds of chief executives leading 965 of the largest companies in 20 markets around the world. It sought to identify the skills and experience that shaped their path to the top while taking different male vs. female CEO statistics into account.  At the CEO level, men outnumber women by approximately 17 to one.  (Morningstar) According to a study that explored the gender gap in US companies, the number of male executive officers is seven times higher than the number of women holding the same positions. More than 50% of the companies analyzed didn’t have a single female on their lists of executive officers. Jackie Cook, the author of the Morningstar report, found that online retail giant Amazon didn’t have any women among its highest-paid executives as of 2020.  Women who negotiate for raises and promotions are 30% more likely to be considered as "too aggressive" or "intimidating". (Business Insider) Speaking of male managers vs. female managers, statistics reveal that women who don’t negotiate at all are 67% less likely to receive the same negative feedback. The proportion of women in senior management roles increased from 20% in 2011 to 29% in 2020, globally. (Grant Thornton) As 2019 saw a jump of 5% compared to 2018 (amounting to a total of 29%), 2020 represents a leveling off of the progress made during the previous year. This lack of movement doesn’t necessarily reflect a failure of companies to address the existing gender gap. Globally, the proportion of companies with at least one woman in senior management was 87% in 2020.  (Grant Thornton) The number of female CEOs and senior managers has risen by almost 20 percentage points over the last few years. For comparison, this figure stood at 68% in 2015 and 68% in 2017.  77% of women say the biggest obstacle to gender equity in the workplace is the lack of information on how to advance. (Working Mother Research Institute) Only 41% of female survey participants, as opposed to 64% of male respondents, said they have a network of coaches, mentors, and sponsors offering them career guidance. 37% of women versus 64% of men said that their companies provide information on career paths that lead to executive roles. (Working Mother Research Institute) Additionally, women CEO statistics indicate that 74% of female employees understand what the specific requirements are for advancing to the highest-paying roles in their companies even though they don’t receive this type of information directly.  60% of women believe they have the same opportunities to advance as anyone else at their workplace versus 74% of men.  (Working Mother Research Institute) Similarly, 65% of women express they are satisfied with the way their careers are progressing, and so do 78% of men.  Male vs female CEO stats reveal that 59% of male employees aspire to become chief executives versus 40% of women.  (Working Mother Research Institute) Of those women who aspire to become CEOs, 6% are first-level managers (as opposed to 13% of men) and 39% are executives. The same goes for 40% of men hoping to take on the role of chief executive officer.  Businesses with high representations of women in leadership roles had a 35% higher return on equity and 34% higher total shareholder return in comparison with male-dominated companies.  (Catalyst) Female vs male CEO statistics compiled by an NGO during a review of 353 Fortune 500 companies show that the differences were most apparent in facial services, consumer discretionary, and consumer staples industries.
By Milica Milenkovic · September 24,2021

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