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Article - Women in Business

Women are vital to the German economy

Introduction

Through their roles in business, entrepreneurship, skills and science, women are playing a key role for the economy.

Women make a significant contribution to the German economy. Women are very well educated, accounting for more than half of those qualifying to study and of graduate students, and around 45% of doctoral students in Germany. Women make up 46% of the workforce. They create new products, services and jobs. In their role as decision-makers, they are actively shaping the future of our country.

Despite all this, executive positions remain largely a male domain. 74% of the professorships are held by men, and the proportion of women on the DAX 30 boards currently stands at 12.8%. There is only one DAX company board where the percentage of women is higher than 30%. The gender pay gap is also still very real in many German companies, with women earning 5.5% less on average than their male counterparts across all sectors of the economy. It is thus high time to improve gender diversity in the workplace and increase women’s representation on German boards. This includes making it easier for women to balance their working and family lives. Equal opportunities in the workplace is an issue for and a factor driving the economy..

Economic policy is always also a policy for women

Providing support for women in business and making their achievements more visible is an economic policy goal and also an important aim of the Federal Ministry for Economic Affairs and Energy. The #StarkeFrauenStarkeWirtschaft series of events is bringing together Federal Minister for Economic Affairs and Energy Peter Altmaier with women entrepreneurs and female decision-makers in business to discuss the challenges to gender equality in the business world and how these can be tackled.

The Federal Ministry for Economic Affairs and Energy is thus adhering to its guiding principle of the Social Market Economy, which understands social justice and inclusion as a foundation stone for everyone to share in prosperity. Gender equality is an integral part of the Ministry’s policy – be it with initiatives like ‘FRAUEN unternehmen’, its discussions with business representatives and policy makers both at home and abroad, or at the annual Girls‘Day (in German).

Four figures about women in business

36
Symbolicon für Frau

percent
is the proportion of new businesses founded by women

38
Symbolicon für Netzwerke

percent
is the proportion of new full-time businesses founded by women

34,8
Symbolicon für Statistik

per cent
is the proportion of women on the supervisory boards of DAX companies without a women's quota (October 2020)

36
Icon for meeting

per cent
of management positions in the federal administration are held by women

Giving women entrepreneurs a boost

Using role models to encourage women to start out in business

Only one in three companies is founded by a woman. As for technology-based start-ups, the statistic is even lower. This shows that the start-up scene needs to become more attractive for women.

The number of self-employed women has risen in the last few decades, but the image of ‘the entrepreneur’ in Germany is still male-dominated. The number of businesses set up by women has recently seen an increase. Most of these are sideline businesses (2019: +29% compared with 2018) as women often tend to opt for more flexible and hybrid forms of gainful employment, for example a combination of employment and self-employment on the side.

Entrepreneurship opens up a wide range of opportunities: it helps women realise their own ideas, be creative, determine how many hours and where they want to work, thus allowing them to better balance their working and private lives. More women entrepreneurs also mean more jobs and a boost to economic growth. A high level of diversity of business models and corporate cultures can also generate crucial competitive advantages.

Successful women entrepreneurs as role models

The Federal Ministry for Economic Affairs and Energy wants to encourage women to use their qualifications and skills to realise their own business ideas and to build up successful companies.

Under the Ministry’s ‘FRAUEN unternehmen’ initiative, more than 200 women entrepreneurs from across all industries and parts of the country volunteer as ‘role model entrepreneurs’, making schoolgirls, trainees, students, graduates and other women interested in going into business aware of the opportunities and challenges of running one’s own business. This gives the women and girls a realistic and highly personal insight into what daily life as an entrepreneur is really like. The women entrepreneurs show how entrepreneurship can be an attractive career option for women. The ‘FRAUEN unternehmen’ initiative also helps to make the work undertaken by female entrepreneurs more visible – presenting their success, their dedication, and their contribution to the future of Germany’s economy.

Giving targeted support to women entrepreneurs

The Federal Ministry for Economic Affairs and Energy provides women interested in entrepreneurship with tailored information on how to set up a new business. Women entrepreneurs can access information on more than 2,000 regional partners via the Federal Ministry for Economic Affairs and Energy’s integrated information services and thus find networks, centres of women entrepreneurs and mentoring programmes.

In order to provide even more targeted support for prospective entrepreneurs and women and men interested in starting their own business, particularly during the planning stages, the Federal Ministry for Economic Affairs and Energy and KfW have set up a platform for entrepreneurs that is free to use and provides entrepreneurs with a digital toolkit covering all steps of the process of starting one’s own business. It allows budding entrepreneurs to develop a first idea or business model, draft a business plan, enquire about funding and financing and contact the relevant institutions online. In addition, the platform hosts videos of successful entrepreneurs sharing their experience and giving useful advice. The platform’s network of partners currently consists of more than 600 key stakeholders from start-up funding. The platform has a special landing page dedicated to women interested in starting their own business.

Wall with post-its from an Start-Up; Quelle: Getty Images/Emely

© Getty Images/Emely

Start-ups: a driving force for growth and competition

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Breaking the glass ceiling

The introduction of a statutory quota for women in executive positions is an important step towards achieving parity of opportunity between women and men in business and the world of work.

The Act on the Equal Participation of Women and Men in Leadership Positions in the Private and Public Sector, which became effective on 1 January 2016, introduced a fixed gender quota of 30% where new supervisory board positions have to be filled in companies that are listed and subject to full co-determination. This rule has led to a marked increase in the number of women on the supervisory boards of listed companies, bringing it to around 35%. However, the share of women on the executive boards of listed companies (DAX, MDAX, SDAX) has only risen slightly. According to data compiled by the AllBright Stiftung (PDF, 3.7 MB), it stood at around 10% in September 2020.

This means that Germany is lagging far behind other global economies such as the U.S., France and the UK. This could turn out to be a competitive disadvantage for Germany in the medium term as studies show that the more diverse a company’s management board, the more successful and innovative a company will be.

The Federal Government has thus decided to continue its efforts to improve the effectiveness of the Equal Participation Act. This means that listed companies and companies that are co-determined on the basis of parity will be required in the future to have at least one female member on the management board if the board has more than three members. Companies in which the Federal Government holds a majority stake will not only have to meet a 30% quota for women on supervisory boards but also have at least one woman on their management board if the board has at least three members. Corporations under public law will even be required to have at least one woman on their management board if the board has at least two members.

Seeking to lead by example, the Federal Government has set the goal of bringing the share of women in executive positions in the federal administration to 50% by 2025. As an intermediate step, each Ministry is to reach a share of 40% by the end of the 19th legislative term (September 2021).

Under Peter Altmaier’s tenure as Federal Minister for Economic Affairs and Energy, a wide range of measures geared towards increasing the share of women working at the Federal Minister for Economic Affairs and Energy have been introduced (see balancing career and family life). This has helped increase the share of women in executive positions from around 35% to 40%.

Worker

© iStock.com/industryview

Skilled professionals for Germany

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Combining Family and Career

The competitive advantage of being family-friendly

In order to keep up in the competition for skilled labour, employers need to give their employees all the support they need to be able to combine their job with the responsibilities they have in their private lives. Helping employees balance career, family and caring commitments is an important component of employer attractiveness. Even today, the demographic development is resulting in a clear skills shortage in some occupations, sectors and regions.

The competitiveness of our companies depends largely on the creativity, performance and skills of the employees. Companies which reward creative commitment and offer working conditions which make them competitive in the long term will always benefit from motivated employees and their innovations. Measures to improve the compatibility of family life and work pay off for the business and for the economy.

A family-friendly company has greater employee loyalty

The entire business culture must become more family-friendly. This will allow women in particular to develop their potential in working life and their leadership qualities. Studies show that it is still mostly the women who take charge of caring for children and relatives; however, the number of men who want to raise their children or care for an ailing family member is also growing. Whether it is flexible working-time models, reintegration courses, working from home opportunities, mentoring programmes, job sharing programmes, coaching for women executives or women’s networks – the measures available are diverse and must be mutually coherent.

The family-friendly business culture must be backed by a care infrastructure which is close to home, meets the needs, and is high quality.

The digital transformation opens up new opportunities for women to work

The digital transformation is opening new opportunities in the world of work, especially for women, and can offer alternative career paths. For example, digitalisation and work 4.0 are expanding the level of flexibility with regard to working times and places of work, thus making it easier to combine family responsibilities and a career. They therefore play a key role in promoting equal opportunities for women and men in business and the world of work.

Flexible work patterns have a considerable impact on women’s representation in the workforce. For example, a study conducted by KfW found that women’s representation in companies providing a family-friendly working environment is 9 percentage points higher than in other companies.

This makes digitalisation an important instrument for unlocking women’s potential – and attracting skilled labour in times where competition for talent is growing is key for employers to remain attractive.

Digitalisation can also open up opportunities for self-employment and realising one’s own business ideas, not least for women. The new possibilities offered by a digital working environment not only provide for more flexibility: digital business models also open up numerous opportunities for women to use their creativity.

Making it easier to combine family life and a career

The provision of needs-based childcare services is an investment in the future. The ‘Perspective Re-entry’ action programme – a joint initiative between the Federal Minister for Family Affairs, Senior Citizens, Women and Youth and the Federal Employment Agency – encourages women to return to the labour market following a career break of several years due to caring responsibilities.

The programme seeks to provide support for women who have been out of the labour market for several years to return to work, encourage companies to employ these women and improve the environment for returners via local networks.

The rules on family caregiver leave help families if, in addition to work and perhaps childcare, they have to look after a close relative. The Act on Better Reconciliation of Family, Care and Work permits employees to claim up to 24 months’ partial leave from work and receive a special carer’s grant.

For further information, please visit the website of the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth.

Setting a good example: a family-aware HR policy in the Federal Ministry for Economic Affairs and Energy

The Federal Ministry for Economic Affairs and Energy is setting a good example in terms of compatibility of work and family life. Since 2002, the Federal Ministry for Economic Affairs and Energy has been regularly awarded the ‘audit berufundfamilie®’ for family-friendly employers by berufundfamilie GmbH (or formerly the non-profit Hertie Foundation). The Federal Ministry for Economic Affairs and Energy was the first Federal Ministry to receive this certificate. In June 2020, the Federal Ministry for Economic Affairs and Energy was awarded the permanent certificate honouring its many years of sustained commitment to an HR policy that is family-friendly and takes into account all phases of life. Tailored part-time models (also offered to those in managerial positions), mobile working opportunities, events to help employees transition back into work after a long absence, an in-house mentoring programme and parking spaces reserved for employees with children have been implemented over 18 years of dedicated work and commitment throughout the Ministry.