Startup Failure Rate and 80+ Other Startling Statistics About Startups

Startup Failure Rate and 80+ Other Startling Statistics About Startups
ByMilan Mijatovic
March 10,2021

It takes guts, determination, and a healthy dose of wild optimism to attempt building a startup of your own. It also takes years of hard work. Despite all this, 70% won’t live to see their 10th birthday. So, what is the startup failure rate in your industry, your city, your niche? And why do so many people give up on the idea they fought so hard for?

Most entrepreneurs are aware that it can be difficult to get repeat funding, build a viable business model, and grab their customers’ attention. But did you know most businesses fail simply because there is no market for their product? If you don’t do your market research properly, all your subsequent efforts to stay afloat will have been in vain.

It’s important to learn what percentage of startups fail in the industry you’re targeting. Don’t set yourself back by ignoring economic, financial, social, and cultural data on the current state of affairs in your particular niche. And make sure you have a good grasp on what the competition is doing so you can provide a product or service with a point of difference.

We’ve prepared an infographic on the latest and most relevant startup statistics to help your business get off the ground. To do this, we’ve compiled high-quality data from independent studies and reports, as well as government websites and academic papers. Our goal? To find out what prevents startups from failing, how to conduct the best market research, where to get funding, and how long it takes to start making money organically.

What are the best cities for startups? What are the most profitable industries for startups? It’s worth asking yourself all these questions before you begin investing time and money into an idea that may not succeed. With a steady focus and the right information, you’ll give yourself the best chance of getting the job done.

Top Startup Failure Rate Statistics - Editor’s Choice

  • Access to talent (63%) was the critical issue affecting most startups in 2019.
  • Only 6% of U.S. startups believe organic growth will be their company’s next source of funding.
  • Incompetence, at 46%, is the most common reason why businesses fail, according to a Statistic Brain study.
  • San Francisco and Silicon Valley account for 13.5% of global startup deals.
  • 50% of U.S. startups say they were concerned trade policy between the U.S. and China will hurt their businesses in 2019.
  • Of the startups surveyed, 58% started with less than $25,000 and one-third started with less than $5,000.
  • More than 80% of U.S. startups said they planned to add employees in 2019.

Startup Failure Rate Statistics

1. Incompetence, at 46%, is the most common reason why businesses fail, according to a Statistic Brain study.

(Statistic Brain)

In this case, the term “incompetence” refers to a wide variety of inadequacies. These include emotional pricing, no experience in record-keeping, a lack of planning, no knowledge of finance, failure to pay taxes, and spending too much with limited business revenue.

2. The percentage of startups that fail after four years in the U.S. is over 50%.

(Statistics Brain)

Businesses in the fields of information (63%), transport, communication and utilities (55%), and retail (53%) are the most likely to fail. Their somewhat more successful counterparts include real estate, finance, and insurance (42% failure rate), along with education and health (44%).

3. 65% of entrepreneurs admit they were not fully confident they had enough money to start their business.

(Business Insider)

Sadly, 93% calculated a run rate of under 18 months. Of these, 25% calculated a run rate of less than six months, while 36% didn't make any calculations at all.

4. Only 9% of businesses fail due to an utter lack of passion.

(CBINSIGHTS)

How many new businesses fail just because their owners simply don’t care enough to make an effort? Not too many, as it turns out. Still, this is a ridiculous reason to go down. As stated in the infographic, CBINSIGHTS performed post-mortems on 101 failed startups to learn what drove them to an early grave. Mostly, it was a lack of market need, inadequate funding, or an incompetent team.

5. In 2018, there was a decline of about 2% in cultural support, human capital, competition, internalization, and risk capital.

(Global Entrepreneurship Index 2018)

Unfortunately, the Global Entrepreneurship and Development Institute has noticed that the overall environment in 2018 is less supportive of startups and entrepreneurship.

6. 56% of companies that raise a follow-up round of funding after their seed are then able to raise a second follow-up round.

(CBINSIGHTS)

Wondering how to make a startup company successful? Make sure you project a professional, hard-working image to earn subsequent funding. As this research shows, it’s easier to raise a third round of financing than a second one, with only 40% of businesses successfully raising their first post-seed round. After the third round, though, your chances of getting subsequent funding are likely to drop steadily.

7. Access to talent (63%) was the critical issue affecting startups in 2019.

(US Startup Outlook 2019)

Even the best startup business will face a number of challenges on its way to success. In the 2019 US Startup Outlook survey, nearly 1,400 technology and healthcare startup founders and executives cited the most important public policy issues affecting their business. The most compelling issues other than access to talent were healthcare costs (44%) and cybersecurity (40%). The final three concerns were customer privacy (33%), corporate taxes (22%), and international trade (also 22%).

8. In 2019, 50% of U.S. startups said that their more realistic long-term goal is to be acquired, 7% less than in 2018.

(US Startup Outlook 2019)

A larger percentage of startups compared to last year say they don’t know what their ultimate goal is, underscoring the difficulty of planning an exit strategy amid increased market volatility. With plenty of capital available, many corporations, private equity funds, and scaling companies have the resources to make acquisitions.

9. Only 6% of U.S. startups believe organic growth will be their company’s next source of funding.

(US Startup Outlook 2019)

Organic growth is crucial, as startup success statistics show. Other important sources of funding include bank debt, IPOs, mergers, government grants, ICOs, and crowdfunding.

10. 50% of U.S. startups say they are concerned trade policy between the U.S.A. and China would hurt their business in 2019.

(Exploring the Factors of Startup Success and Growth)

Of those, 33% are somewhat worried, while 17% are very concerned. This might be due to China’s “Made in China 2025” plan. This is a strategic project issued by Chinese Premier Li Keqiang and his cabinet in May 2015. In short, China plans to move past being the world’s “factory” and start producing higher-value products and services. The small business survival rate – which currently sits at 30% past the 10-year milestone – might not drop because of this economic shift. There is another issue, though. According to a Churnbase study, China has more unicorn companies than the U.S.A., in spite of America being the primary source of venture capital.

11. Of the startups surveyed, 58% started with less than $25,000 and one-third started with less than $5,000.

(Business Insider)

Kabbage recently polled 600 thriving U.S. small business owners to better understand their cash flow issues. Admittedly, these small business owners indicated they had at least some knowledge of how to build a startup. In many cases, this knowledge included experience in financing and bookkeeping (35%), legal and compliance (29%), and marketing and advertising (28%) when starting their business. Maybe the motto that “it takes money to make money” doesn’t apply all the time.

12. Globally, product innovation scores have increased by 22% since 2017, while startup skill scores have risen by 11%.

(Global Entrepreneurship Index 2018)

The Global Entrepreneurship and Development Institute came up with these figures. It is one of the top research centers focused on understanding and improving the relationship between entrepreneurship, innovation, and prosperity. Based on the organization’s findings, people are getting better at understanding and identifying successful startup business ideas and turning them into useful products.

13. 60% of U.S. startups expected business conditions for their company to improve in 2019, 1% less than in 2018.

(US Startup Outlook 2019)

Entrepreneurs’ hopes and dreams are slightly grimmer than in 2017. On the other hand, 31% of respondents believe that business conditions will stay the same. As many as 9% think conditions are likely to get worse, a 4% increase since 2018.

14. On average 15% of micro-enterprises are traders, while the share is 60% for small enterprises.

(OECD)

The success startups expect to achieve seems to revolve mostly around trade. A 2018 OECD report on entrepreneurship classified micro-enterprises as having between zero and nine employees (zero meaning the owner is the only one working). According to this measure, a small enterprise employs between 10 and 49 people.

15. Organizations’ capacity to channel innovations to the economy is more potent in innovation-driven economies (1.55%) than in efficiency-driven (1.17%) or factor-driven economies (-0.59%).

(Global Entrepreneurship Index 2018)

Successful startup businesses identify and understand how developed their country’s economy is before they decide what startup idea to pursue. Factor-driven economies rely mainly on unskilled labor and natural resources, while efficiency-driven economies are characterized by more efficient production processes and higher quality. Finally, innovation-driven economies depend on skilled, educated, and knowledge-based labor, with a more developed service sector.

16. Scores on the Global Entrepreneurship Index have improved by 3% on average since last year.

(Global Entrepreneurship Index 2018)

The GEI analyzes startups’ health based on 12 main factors. These startup success factors include product innovation, process innovation, human capital, cultural support, and the perception of opportunities. 

17. 71% of surveyed U.S. startups have successfully raised capital in 2018.

(US Startup Outlook 2019)

A quarter of these businesses don’t consider the fundraising environment to be challenging. That may be because there is currently a trend of venture capitalists and private equity firms investing larger sums into a smaller deals. These startup trends only apply to high-performing young businesses, however. Struggling startups are finding it increasingly more difficult to raise funds. 

18. More than 80% of U.S. startups said that they planned to add employees in 2019.

(US Startup Outlook 2019)

The success startups hope to achieve often relies on paying a bunch of new employees to do the heavy lifting, so to speak. As many as 29% of entrepreneurs recognize that it’s extremely challenging to find talent with the necessary skills to grow their businesses. Another 62% say it is somewhat challenging. Startups are most in need of filling product development, sales, and technical positions.

Startup Guide: Ageism, Racial Bias, and Venture Capital

19. In 2019, the percentage of startups with at least one woman on the board of directors increased to 37%.

(US Startup Outlook 2019)

That’s the highest result since SVB started doing research in 2015. Additionally, 53% of startups now feature at least one woman in an executive position, a 10% increase compared to last year.

20. 37% of founders believe startup investors show some kind of age bias against them.

(State of Startups)

In 2018, the State of Startups annual survey interviewed hundreds of venture-backed founders, who talked about what it’s like running a tech startup today. On average, founders think ageist attitudes begin once they turn 46.

21. In 2018, 26% of surveyed tech startup founders believe a race bias is exists.

(State of Startups)

Small business stats and startup stats don’t usually cover these issues, but discrimination remains a huge problem. In the State of Startups annual survey of 529 founders, almost 30% agreed people in the American startup scene need to do more to fight racial bias.

22. In 2019, 52% of U.S. startups expected their company’s next source of funding to be venture capital.

(US Startup Outlook 2019)

That’s down 2% from 2018. Due to limited revenue or high costs, most of startups’ small-scale operations aren’t sustainable in the long run without additional funding. That’s why, after receiving their initial investment, most young startups will either fail or need subsequent investments. As for subsequent investments, 17% of the U.S. startup budget comes from angel investors, micro VCs, or an individual investor. Only a small number of companies become profitable solely thanks to their first investment. As many as 8% hope for private equity, while 7% rely on private investors.

23. On average, a typical angel investor in the U.K. holds their investment for six years.

(The UK Business Angel Market)

A study of the U.K. Angel Business Market came up with this figure. Startup statistics in the UK show hugely positive signs of continued growth in the angel market. In fact, 41% of angel investors increased their investments during the 2016-17 tax year. Growth has been impressive, with 69% of investee businesses surpassing their expectations.

24. San Francisco and Silicon Valley account for 13.5% of global startup deals.

(StartupsUSA)

San Francisco tops the list, playing host to nearly 10% of global venture capital deals. In other startup news, New York is the runner up, with 6.5%. London is next, with 5% of global venture capital deals, half of what San Francisco provides. Finally, the heart of Silicon Valley, San Jose, accounts for almost 4% on its own. Boston and L.A. each account for more than 4% of all startup deals on a global scale.

25. Bangkok takes first place for global growth of venture capital deals, with an increase of more than 600% between 2010 and 2017.

(StartupsUSA)

Thailand's successful startup industry expected to see double-digit growth in 2018, driven by local funding and foreign venture capital. Local startups are being encouraged by government support, and Thailand is promising as overall costs for startups are low relative to Singapore.

26. Globally, the majority of enterprises (between 70% and 95%) are micro-businesses, meaning they have fewer than 10 employees.

(OECD)

Startup statistics show that in most OECD economies, small and medium-sized enterprises account for over half of all employment and value added within the business sector. These are either single-person businesses, where a freelancer opens a firm and is self-employed, or a partnership of some sort. Small businesses such as these are easier to manage. Since poor time and resource management are some of the most common causes of the high startup failure rate, this reluctance to start big is probably a good idea.

27. In most OECD countries, venture capital constitutes less than 0.05% of GDP.

(OECD)

This is according to the OECD, an intergovernmental organization consisting of 36 member countries. The two major exceptions to the small GDP percentage of venture capital are Israel and the United States, where the venture capital industry is more mature and represents more than 0.35% of GDP.

Tech Startup Statistics

28. The fastest-growing tech startups are in advanced manufacturing and robotics, which is growing at a rate of 189.4%.

(Global Startups Ecosystem Report)

According to a 2018 report, advanced manufacturing and robotics has the best five-year growth rate of any tech subcategory. This stat specifically measured early-stage deals from 2012-17.

29. Agtech and new food is the second-fastest-growing sector for startups, with a growth rate of 171.4%.

(Global Startups Ecosystem Report)

The 2018 Global Startup Ecosystem Report found agtech businesses to be among the most profitable startups. The agriculture industry employs a huge number of people and adds $3.2 trillion annually to the global economy. Now, digitization is transforming this vital industry, especially in the fields of automation and quality control.

30. Blockchain is the third-fastest-growing tech startup category, with a 162.6% growth rate.

(Global Startups Ecosystem Report)

Blockchain is still in the emerging phase of the startup lifecycle. This peer-to-peer value exchange eliminates the need for third-party mediators. The technology has applications across myriad industries, particularly within the financial services sector. When you look at tech startup trends, nothing’s hotter right now than blockchain.

31. AI, big data, and analytics are the fourth-fastest-growing tech startups, at 77.5% growth rate.

(Global Startups Ecosystem Report)

This sub-sector is growing strongly and is much closer than many other sub-sectors to the mature phase, encompassing 5% of all global startups. Worldwide GDP could grow up to 14% by 2030 as a result of AI, which would mean an additional $15.7 trillion for the global economy.

Why Some Startups Succeed (and Why Most Fail)

  • Market research: You’ve fulfilled your lifelong dream by starting a real estate agency. But the area you should be covering is already packed with realtors, and your service is surplus to the market’s needs. You fail.
  • Business plan: Identifying market demand is just the beginning. You need to split your business plan into small, achievable goals, and predict potential problems and solutions.
  • Funding: Whether you’re backed by a venture capitalist, an individual contributor, or the government, your business will probably need repeat investments. The best startup advice you can get is to not stretch for cash during your first year, or you might never get off the ground.
  • Location and marketing: An integrated, multi-channel online presence is a must for any business to survive in the 21st century. If you open a coffee shop with no website or social media presence in a neighborhood that couldn’t care less, you’re going to have a bad time.
  • Knowledge: The truth is that some entrepreneurs take up this challenge with little to no previous knowledge of finance, accounting, or their niche. Make sure you enroll in courses to learn the skills you need before you try to break into the market.

Frequently Asked Questions
What percentage of new businesses fail in the first year?

It’s estimated that around 20% of businesses don’t live past their first year. This is a minority, of course, but still a significant risk to be aware of. Bad online and offline marketing, as well as poor market research, are probably the chief culprits here. Remember to over-prepare and conduct in-depth research before you decide to start building your business.

What percentage of entrepreneurs are successful?

If you’re optimistic, the one standard that seems to apply across all cultures and societies is the 10-year milestone. Only 30% of businesses live to see their 10th birthday, so entrepreneurs can consider themselves successful if they make it into their 11th year. According to a 2018 report, over 67% of the adult population hold entrepreneurs in high esteem. Enjoying that respect within their community helps them be happier and makes them more likely to succeed. (Exploring the Factors of Startup Success and Growth) (Fundera)

What percentage of startups fail UK?

Only 53.7% of companies founded in 2013 lived past their three-year milestone. Surprisingly, this number is 3.6% lower in London. According to Mark Hart, deputy director of the Enterprise Research Centre, this happens because a lot of people come to London to seek business opportunities. The businesses that do survive, however, grow by 20% (in employees and turnover) for at least three years in a row. Northeast Scotland has the highest rate of survivors who scale up (9.8%). Professor Hart attributes this partly to the region’s successful oil and gas industry. (The Financial Times)

What percentage of startups are successful?

About 80% of startups that have employees will keep working after their first-year milestone. The Bureau of Labor Statistics provided the most recent research on this issue, which shows that 79.9% of businesses that opened in March 2016 were still operating in March 2017. (BLS.gov)

Conclusion

If you want to succeed, a positive attitude and hard work alone aren’t going to cut it. You need to know, not hope that your business will be a success. The startup success rate becomes less favorable with every year your business keeps operating, and as time goes by, survivors are increasingly rare. You won’t get too many shots at building a profitable company, so time and quality information are of the essence.

Don’t be fooled: the myth of the personality cult, maverick tech entrepreneur who makes millions winging it is a sham. If you’re born into considerable wealth, you might be able to pull that off. The chances are, though, that you’ll only succeed if you work harder and smarter than your competition. Over-prepare, read up on all the you can get your hands on, then prepare yourself for the ultimate leap of faith so you don’t become just another number in the startup failure rate.

More from blog

Victimless crimes without bloody traces, fingerprints, or mysteries worthy of Hercule Poirots’ insights and findings don’t shake the public too much. People don’t usually expect white-collar office workers with their noses buried into piles of papers to keep dark secrets. Despite that, white-collar crime statistics show the seriousness of this problem, which can have devastating consequences on businesses and enterprises.  Money laundering, embezzlement, financial statement frauds, check or payment tampering are among the most common crimes committed by white-collar workers. We compiled data regarding those felonies to help you learn more about white-collar corporate crimes.  White-Collar Crime Stats: Editor’s Choice Only 28% of white-collar employees involved in corporate crimes are women. A typical white-collar felon is a married male in his forties.   White-collar crimes cost the United States over $300 billion per year. Only 6.1% of corporate criminals come from an unhealthy family background. Only 9% of frauds happen in nonprofit organizations. Corruption accounts for 43% of white-collar crimes and causes a median loss of $200,000 per case.  The maximum prison sentence for insider trading in the US is 20 years. White-Collar Crime Demographics: Who Commits the Crimes? Only 28% of white-collar employees involved in corporate crimes are women. (2020 Global Study on Occupational Fraud and Abuse) If there has ever been a need to draw a forensic sketch of a typical corporate criminal for identification purposes, it very likely wouldn’t be a woman. Detailed research into the demographics of white-collar criminals showed that women are very rare corporate crime offenders, accounting for only 27% of committed frauds. The fact that a vast majority are men is understandable given the disproportion of females in higher management positions at corporations. Corporate crime statistics reveal that a typical white-collar felon is a married male in his forties. (Bajoka) (University of Cincinnati School of Criminal Justice) The typical white-collar criminal doesn’t look any different than the co-workers you sip your morning coffee with. He is likely in his mid-forties, though some start earlier. He doesn’t have a criminal record and hasn’t committed any criminal acts until his late 30s. Most of them boast at least a Bachelor’s degree and belong to the professions not so often associated with illegal activities: lawyers, financial advisors, accountants, and clergy members. Some companies use employee tracking software to get a better insight into their workforce, but these felons are usually in positions of power, where they don’t get tracked or at least know how to circumvent it.  Statistics of white-collar crime in the US show 35.3% of felons have more than $10,000 in assets. (University of Cincinnati School of Criminal Justice) As we can see from the statistics gathered in the research commissioned by The University of Cincinnati School of Criminal Justice, over a third of white-collar criminals are well-established in the society, with more than $10,000 in assets. 63.5% have residential stability, and out of that number, 50.3% are homeowners. They are usually highly ranked in their companies, often at managerial positions, and 65.8% of them have steady employment.  White-collar crime racial statistics reveal 73.9% of offenders are white. (University of Cincinnati School of Criminal Justice) Social and other prejudices often take over the minds of people when they think of criminal activities. Corporate crime is a different beast, though.  Nearly three-quarters of white-collar offenders are white people coming from middle-class or better backgrounds. Notably, income tax frauds are overwhelmingly white-male driven crimes, with 91.4% of perpetrators being male and 89.1% white. Only 6.1% of corporate criminals come from an unhealthy family background. (University of Cincinnati School of Criminal Justice) When we speak or think about thefts, kidnapping, rape, or murders, we often envision the perpetrators coming from tough financial conditions and unhealthy family backgrounds. Statistics on white-collar crime indicate some often overlooked facts regarding the families the felons come from. Namely, only 6.1% of them were raised in families where they were abused, neglected, or abandoned as children. Only 6% grew up with at least one family member involved in criminal activities, and 15% had parents who struggled to provide the necessities of life. Common Types of White-Collar Crimes Asset misappropriation schemes account for 86% of frauds and cause a median loss of $100,000 per case. (2020 Global Study on Occupational Fraud and Abuse) Now that we know who commits white-collar crimes and the statistics behind them, we can determine the most common types of these crimes. According to the data gathered in the Report to the Nations global study on occupational fraud and abuse, the most frequent fraud scheme is asset misappropriation. This felony accounts for 86% of all white-collar crimes, but, luckily, it’s the least costly type with a median loss of $100,000 per case. Asset misappropriation happens when an employee misuses or steals the company’s resources and thus defrauds their employers.  Financial statement frauds are the most costly type of white-collar crime, with a median loss of $954,000. (2020 Global Study on Occupational Fraud and Abuse) Luckily, white-collar crime statistics indicate that financial statement fraud schemes are the least common type of corporate fraud, accounting for only 10% of the cases. So what are financial statement frauds? They involve schemes in which the offender intentionally omits or misstatements the material in the company’s financial statements. Corruption accounts for 43% of cases and causes a median loss of $200,000 per case. (2020 Global Study on Occupational Fraud and Abuse) Corruption takes up an expectedly high proportion of occupational frauds. Offenses such as bribery, extortion, conflicts of interest, bid-rigging, and other illegal activities cause losses of around $200,000 per case. One of the more alarming facts about white-collar crime is that corruption cases often cost companies more than just money. Often their reputation goes on the line, and many have to reach out to costly reputation management services to mitigate the damage. 64% of organizational offenses in the United States happen in closely-held or private corporations. (United States Sentencing Committee) Speaking of the structure of the organizations where frauds are committed, 64% of them are private or closely-held corporations. US white-collar crime statistics show that limited liability companies account for 22.7% of cases, and 9.3% of cases happen in publicly traded corporations. If we dig deeper into the infrastructure of American businesses committing corporate offenses, we can conclude that most are small in size. Namely, 66.1% had fewer than 50 employees, and only 9.7% had more than 1,000.  Only 9% of frauds happen in nonprofit organizations. (2020 Global Study on Occupational Fraud and Abuse) Although nonprofit organizations reported very low white-collar crime rates, the $75,000 in damages per case can be a serious blow to smaller organizations. According to the 2020 Report to the Nations study, private organizations accounted for 44% of corporate frauds, public ones for 26%, government agencies for 16%, and other company types for 6%. General White-Collar Crime Statistics FBI white-collar crime statistics show that these criminal offenses cost the US over $300 billion per year. (Cornell Law School 2020 Global Study on Occupational Fraud and Abuse) According to the Federal Bureau of Investigation (FBI), corporate crime offenses are estimated to cost the US more than $300 billion every year. Aside from fines, other penalties for white-collar crimes include paying the cost of prosecution, home detention, forfeitures, community confinement, supervised release, and even imprisonment.  Only 56% of organizations conducted an investigation of their worst corporate criminal incident. (PwC's Global Economic Crime and Fraud Survey 2020) When we look at white-collar crime report statistics, we can see that the main reason for the persistent recurrence of corporate crime might be the lack of people willing to report it. Figures show that only 56% of businesses conducted an investigation of their worst incidents related to white-collar crime. Simultaneously, barely one-third of organizations reported the incident to the board. 89% of the interviewees reported negative emotions after an incident or fraud happened at the company. Taking all the necessary steps to address and better understand the issue results in fewer fraud cases in the future. Ignoring white-collar crime sentencing statistics for a moment, nearly 60% of companies who conducted detailed investigations into the fraud cases ended up being better off for it.  80% of white-collar crime perpetrators received some punishment in 2020, but only 59% of the cases were referred to law enforcement agents. (2020 Global Study on Occupational Fraud and Abuse) Organizations can refer to the corporate criminal incident internally, through civil litigation, or by reaching out to law enforcement. The statistics on the response to frauds indicate that nearly half of the victim organizations (46%) never refer these frauds to law enforcement, believing that internal discipline is sufficient. Another big reason for refraining from reaching out to the criminal justice system is the fear of bad publicity (32%). There were 755 cases of money laundering in the United States in 2020. (United States Sentencing Committee) White-collar crime statistics by the state indicate that the Southern District of Florida had the highest number of money laundering cases during the fiscal year of 2020 (42). This was followed by the Southern Districts of New York and Texas, with 33 convictions each. One of the ways to prevent money laundering and tax evasion is to engage professional tax software solutions to help companies stay up-to-date and compliant with state and federal tax laws. White-collar crime prison statistics reveal that the maximum prison sentence for insider trading in the United States is 20 years. (US Securities and Exchange Commission) Even though not many people and organizations are willing to go to law enforcement in resolving corporate fraud cases, there are exceptions. When reaching out to the criminal justice system to solve the problem, victim organizations can expect the maximum prison sentence for insider trading to be 20 years. At the same time, the maximum amount of money charged from corporate criminals is $5 million for individuals and $25 million for organizations. Obviously, insider trading is just one of the many corporate frauds that can ruin a company’s finances and reputation, but the steep punishments should serve to encourage more people to speak up and get the felons convicted.
By Danica Djokic · October 07,2021
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

Leave your comment

Your email address will not be published.


There are no comments yet