Leadership and the Gender Gap

We have all heard of the glass ceiling cliché to describe the inequities of women in leadership positions. While many pioneering women have cracked that ceiling, it still looms above America’s ambitious and innovative female workforce.

The big gap in the U.S.

According to a study by Grant Thornton, women hold only 20% of U.S. senior corporate leadership positions.

When compared to their global counterparts, the U.S. falls far short in shrinking the gender gap. Emerging economies seem to be doing much better at achieving gender equality in the workforce. Even the progressive nations of Western Europe don’t measure up with the likes of China with over 50% of corporate leadership positions held by women. Estonia and Vietnam rank in the top ten with 40% and 33% respectively of women in leadership roles. Even the African country of Botswana has us beat with 32% of their corporate leaders being women.

G7 falls behind the developing world in corporate female leadership

The U.S. isn’t the only established market with low percentages of women in leadership positions. The U.K. is right behind us with 19% and Japan at 7%. Cultural conservatism might explain Japan’s low percentage of women in leading roles within the corporate structure. However, how do you explain China? This ancient culture has not always been women friendly and due to the one child rule, sex selection in favor of males has been widely practiced. However, the fact is China and most emerging economies need workers. Women generally make up half the population at birth and enjoy longer life expectancy. 

Malaysia’s cabinet passed a 2011 mandate stating that companies must achieve a 1/3 ratio of women on corporate boards and in executive roles by 2016. U.S. corporations are unlikely to respond positively to gender mandates or equitable hiring regulations, however the U.S. would do well to change it’s corporate culture in order to stay competitive. 

Benefits of gender equitable leadership 

Deloitte conducted a global study on workplace diversity and while 72% of executives responding believed gender equality and workplace diversity were essential to continued growth and success of their companies, only 28% believed it was a top priority at the senior level. Many corporations have targeted strategies to recruit and retain women yet senior leadership roles are still lacking in diversity. Women bring a different skill set to the marketplace and smart businesses are harnessing the power of the female approach to business. 

Key leadership traits where women excel

Kathy Caprino writing for Forbes magazine reports that certain leadership traits are in a sense inherently female. Men possess these traits but women are more likely to possess them and to a greater degree. The four traits are:

• Strong interpersonal skills and empathetic relating skills
• Resilience in applying lessons and learning from adversity 
• Honoring inclusion over hierarchy
• Risk taking and resisting following the “rules”

Caprino argues that these traits foster a more open, flexible, creative and inclusive corporate culture. Which translates to greater innovation and productivity.

Corporate America has made great strides in regard to diversity and equality of gender, race, religion and sexual orientation, however we still have a long way to go. More and more organizations are embracing the female approach because they recognize the incredible contributions that women can make at the highest levels of business.

Tom Bulger, CPA celebrates the important contributions women entrepreneurs and leaders make to our communities. Tom has helped countless women achieve their financial goals through customized financial planning and advice. Give Tom Bulger a call today.

Are you a woman in a leadership position within your organization? What were some of the struggles you encountered and how did you overcome them. Share your thoughts with us in our comment section below.

Check back for our next post on the tax implications due to the repeal of DOMA.

Working Moms and Personal Finance

The American workforce has seen a dramatic increase of women joining its ranks over the last forty years. Today women make up 47% of the workforce and by 2020 women’s participation is expected to exceed that of their male counterparts. This is of course due in part to large swing in attitude about traditional household roles. But the need for two incomes in order to support a family is also sending plenty of parents into the workforce who might otherwise prefer to stay at home and raise their kids.

Does that second paycheck make sense?

For many middle class women with dual incomes, returning to the workforce after maternity leave is a real question as to whether it is economically astute in light of the high cost of childcare. In a New York Times op-ed Lilian Faulhaber, associate professor of law at Boston University, writes that the IRS hurts mothers because “the tax code starts with a bias in favor of couples in which one partner works and one stays home.” Faulhaber admits that “this bias, however, does not directly discourage one partner from working. What does is the tax code’s treatment of childcare.”'

Mom's are taking charge of finances

Working moms are breadwinners in 40% of US households, and most of them are single.

According to a Pew Research Study, women performing as the primary breadwinner has climbed from just 11% in 1960 to nearly half of U.S. households with children in 2012. As the major breadwinners, working moms are making more of the financial decisions, managing investments, and dealing with tax issues. 

Although there are more breadwinning moms, the gender gap in pay is still a real issue in today's businesses. According to the Bureau of labor statistics women earn on average between 77% and 80% of what men earn for the same work. A new PAYSCALE analysis has released more optimistic findings, contending that men and women at the beginning of the careers see more equitable pay with women earning about 98% of what men earn. However, as they move into executive positions women’s earnings still fall to around 91%. 

But despite the gap, several studies show women are better at managing their family's finances. They save more money, manage their credit, and take on less debt. 

Tom Bulger, CPA has been helping working parents and families of all types make informed financial choices for over 25 years. Contact Tom to see how he can help you grow your family's wealth today and tomorrow.

Are you a working mom? Are you the major breadwinner in your household? Share your experiences with us in our comment section below.

Check back for our next post in our series on women in the workforce where we will look at women in leadership roles across industries.

Tom Bulger’s Tips for Managing Your Cash Flow

One of the most fundamentally important aspects of running a small business is managing cash flow. A business can be booming and yet strapped for cash making expansion and growth nearly impossible. However, developing a plan to manage your cash flow can be a vital tool in maintaining business continuity and continued growth.

What is cash flow management?

At its core cash flow management is about delaying outgoing payments and expediting incoming payments. Cash flow management is about timing. The first step in developing a cash flow strategy is to create projections.

How do I measure my cash flow?

Creating a cash flow projections spreadsheet for your business will serve you well in measuring and managing your cash flow. There are various elements that make up the cycle of your business and thus affect your cash flow such as:

• Buying and selling on credit and net terms
• Collection processes
• Cost of doing business, payroll, rent, marketing etc.
• Seasonal sales fluctuations

By looking at the history of payments in and out along with expected expenses and forecasting for unexpected expenses business owners can get a handle on when the cash flows in and out and adjust accordingly. Check out this Cash Flow Projection Spreadsheet from the non-profit SCORE. 

How Can I Improve my Cash Flow?

One way to help out with cash flow problems is quicker turnover of receivables into sales. The time from which receivables are paid for and then turned into profit can be shortened with a few techniques:

• Offer incentives to customers for paying immediately or quickly
• Require cash deposits at the time of order
• Process invoices and billing ASAP and follow up if payments are slow
• Require COD with customers who pay slowly.

How does a business survive when the coffers are empty?

Temporary cash flow shortfalls are a part of doing business. It happens to even the most careful planners. The key to surviving the shortfall is again identifying that you will have a cash flow problem and planning for it. A line of credit should be applied for months before the cash is needed. It is far easier to get credit when you don’t need it then when you do.
 
In addition to lines of credit you can ask suppliers to let you delay payments, ask your best customers to pay early, and offer discounts for paying immediately. Some other tactics for managing cash flow include managing payables:

• Don’t pay bills before they are due, take full advantage of payment terms
• Let your vendors know about your issues and work with them, they have a vested interest in keeping you afloat
• Pay through electronic funds transfers on the due date, to keep your cash as long as possible
• Look for vendors and suppliers with flexible payment terms not just the lowest price

Creating projections and forecasting for cash flow is a numbers game. Your projections will never be 100% accurate, however with some careful consideration and numbers crunching a solid cash flow management plan will get you through the lean times and help you to leverage that cash when it flows. 

Tom Bulger, CPA helps start up entrepreneurs and established business owners manage their cash flow for maximum leverage. Talk to Tom today.

Are you having trouble managing cash flow? What steps are you taking to find a solution? Share your experiences and tips with us in our comment section below.

Check back for our next post when we begin our series on women in the workforce.