Creating employment is a key motivation for South Africa’s female entrepreneurs, with 90 percent saying that it was a “very important” (74 percent) or an “important” (16 percent) consideration when they started their business, according to the South African Women Entrepreneurs Job Creators Survey.
Dedication to job creation was consistent across business type and size, and the age of respondents. About three-quarters reported that creating a job for themselves was a “very important” consideration in starting their businesses.
The survey was undertaken by Lionesses of Africa, a network of more than 1.3 million women entrepreneurs across Africa, together with New York University, and supported by Absa.
The survey data was collected online from 913 female entrepreneurs in South Africa between November 23 last year and April 28 this year. It was informed by a further 150 qualitative interviews of women entrepreneurs during the same period. Participants were recruited through the Lionesses of Africa network to represent a range of business types, sizes and sectors.
The survey was an opportunity for South Africa’s women entrepreneurs to share their experiences in job creation and how Covid-19 had affected this and revenue generation. Respondents also shared their post-Covid-19 outlook for their businesses, and their experience with accessing government assistance programmes and external financing during the pandemic.
The survey provides valuable insights into solo entrepreneurs who are creating jobs for themselves and entrepreneurs with employees. The employer entrepreneurs had, on average, 29 employees. The “typical” or median entrepreneur employed five staff, while the top 1 percent had a thousand or more employees.
Most of the businesses with employees hired their first employee early in the life of their business, with 67 percent doing so within the first year. This indicates that women entrepreneurs were not only creating jobs but were doing so in the early stages of their business’s life cycle.
With regard to future hiring plans, among the entrepreneurs who employ staff, more than a third considered their current staffing levels to be inadequate for their needs and 41 percent were actively recruiting. Of those who were hiring, 73 percent reported that they were hiring to help meet demand, 12 percent to bring additional skills into the business, and another 12 percent said they were hiring, or rehiring, to replace employees who had left or were let go.
Lionesses of Africa founder Melanie Hawken said what was encouraging about the survey’s findings was that women entrepreneurs had a real self-belief in their ability to create jobs, and it remained one of the key drivers of their motivation to build sustainable businesses.
“Women entrepreneurs have job creation in their DNA. Another stand-out finding from the report was how these women fought to protect jobs during the Covid-19 pandemic. More than two-thirds either reducing their own salaries or stopping paying themselves a salary altogether in order to look after their staff first. Women entrepreneurs are committed to both creating and retaining jobs,” said Hawken.
Bongiwe Gangeni, the deputy chief executive of Absa Retail and Business Bank, said the survey highlighted the significant role women entrepreneurs played in creating jobs and supporting the economy.
“Absa is proud to be partnering with Lionesses of Africa and to play our part to support women entrepreneurs to achieve their full potential by meeting their needs holistically through our wide range of innovative products and services and enterprise development programmes,” said Gangeni.
The survey also found that female-owned businesses with a digital presence demonstrated greater resilience during Covid-19. Those that made the most of their sales through an app or online marketplace were less likely to be affected by Covid-19 and had more optimistic projections about their future revenues.
Expectations surrounding future hiring also varied substantially among businesses that did most of their sales digitally compared with those that did not. When asked about their expectations regarding jobs over the next 12 months, 35 percent of the businesses that make the majority of their sales through an app or online marketplace responded that they expected jobs to increase a lot, compared with only 22 percent of businesses that were not embracing digital sales.
According to the Quarterly Labour Force Survey for the first quarter of this year, young people were still struggling to find work. The official unemployment rate was 32.6 percent, but it was 46.3 percent among people aged 15 to 34, implying that almost one in every two young people did not have a job in the first quarter.
About a quarter (24.4 percent) of the youth had jobs, and 45.3 percent of them participated in the labour market. Within the youth, those aged 15 to 24 years had an unemployment rate of over 63 percent, an absorption rate of about 7.6 percent and a labour force participation rate of 20.6 percent. The burden of unemployment was also concentrated among the youth, as they accounted for 59.5 percent of the total number of unemployed persons.