Women-owned or led businesses pay better wages in Ecuador: is this still a man’s world?

Micro, small and medium enterprises (MSMEs) owned or led by women in Ecuador pay better wages than those managed by men. In addition, they provide more social benefits, tend to be more empathetic with their employees and are more productive.

These conclusions are part of the study Gender characteristics of micro, small and medium enterprises in an emerging country: is this a man’s world?, published in December 2021 in the academic publishing house Emerald. Angelica Sánchez Riofrío, Nathaniel Lupton, Segundo Camino and Álvaro Acosta conducted the analysis.

The authors studied the financial information of 112,917 MSMEs that were active between 2007 and 2016. They were based on information from the Superintendence of Securities and Insurance Companies (Supercías).

“This document shows that, although this is a world of men, women are learning earlier, developing professionally faster and overcoming stereotypes to concentrate on activities that generate both economic performance and social results,” the document indicates.

The research also details that men are still forming more companies than women. In addition, it is stated that female ownership is negatively related to microenterprise financial performance, but positively associated with small business financial performance.

“Although women-owned microenterprises are less efficient, they tend to provide more benefits to their employees and possibly to communities, through the economic stimulus they provide, in terms of the size of the financial results.”, says the document.

Segundo Camino, one of the authors of the study, indicates that they focused on MSMEs because 95% of these make up the active Ecuadorian business fabric, the rest are large companies. In addition, MSMEs create 48% of all formal employment in the country.

She explains that one of the reasons why women pay better salaries is that “they seek to give back to society things that perhaps society itself did not give them. Then, they feel a commitment to pay better wages and be more socially responsible with their companies. Men are more focused on meeting their financial goals and not so much on social ones”.

Another interesting indicator of the study is that companies that provide more social benefits (for example, higher salaries) have higher survival rates.

In Ecuador women continue to earn less than men

“Companies created or led by men have a slightly higher survival rate than those managed by women. We believe that this may be tied to the issue of self-employment, that is, since women are more affected by unemployment, they start businesses, this was even more evident with the pandemic, but it is an entrepreneurship out of obligation. Then, when they are employed again, the venture will be stopped, since it arose out of necessity, and it can go bankrupt, ”says Camino.

As of November 2021, the unemployment rate stood at 5.8% for women and 3.4% for men, according to figures from the National Institute of Statistics and Censuses.

Paola Aulestia runs her own financial consultancy. She directly employs one person and another by invoice. He indicates that maintaining his consultancy has not been easy in the midst of the pandemic. Now he manages hybrid days, but always taking care of the health and family balance of his work team.

“In my case, for management issues I usually work two more hours, but with them (employees) it’s eight hours. In addition, when they are field visits outside the city of Quito, we worry about mobilization and food. We also have a training program that is paid for by the employer because we believe that the work team that feels good in their position will perform better,” he says.

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A “career plan” has also been implemented so that employees know what their “milestones” are for the following season, so that they have an aspiration for professional growth. “Although we are an MSME, we handle certain applications from large companies to support jobs in the face of the pandemic. I like to analyze my entrepreneurship from the perspective of a woman, to generate employment and not only give income at the pay level, since there is a family behind the collaborator”.

The study on MSMEs adds that women who lead companies are empathic with their workers, regardless of whether they are men or of the same sex. Carlos Zambrano says that his employment relationship “changed” when the communication company where he works decided to place a woman as his boss.

“When I had the boss, I got on well with him, but I felt that I couldn’t communicate family issues or ask for permission to resolve them. With him everything was focused on producing. When the boss arrived, I felt closer to her and she even helped me with my wife’s health issue,” he says.

Camino indicates that the study also seeks to show the importance of promoting the call violet Economy, that proposes to reduce the gap between men and women in the social, educational, economic and political spheres.

In addition, the violet economic model promotes the incorporation of more women in senior management positions such as managers or CEOs. It also seeks to give women equal opportunities and conditions in the labor market. The Ipsos Market Research company developed a study, in 2018, in which 500 large and medium-sized companies were evaluated, it was determined that In Ecuador, only 1 out of 10 CEOs is a woman and only 26% of board members are women..

In the National Assembly rests the so-called Organic Law to promote the work of Women, equal opportunities and the Violet Economy. The regulations are under analysis by the Economic Development Commission. Camino points out that the regulations have interesting aspects and that they can be perfected: “Everything that deals with impulses will be good”. (I)