What is the ‘Networking Penalty’ & How to Overcome it

Three women clinking champagne glasses at a networking event

A few weeks ago, Labour MP for Walthamstow, Stella Creasy tweeted about the fact that she was unable to attend Christmas parties and drinks because she had to collect her kids from nursery. She attributed this to the ‘Motherhood Penalty‘, a term coined by sociologists, that explains that working mothers encounter disadvantages in pay, perceived competence, and benefits relative to childless women.

Creasy caused a massive backlash on X (formerly Twitter) and her comments prompted a number of news articles with both men and women shaming her for insinuating that her children are a burdensome penalty. Others shamed her for her privilege as an MP earning £81k per year and coming from a two-parent household that is lucky enough to afford childcare in the first place. And commenters on Reddit called her out for peddling a form a feminism that is totally detached from reality.

I am sure none of us are surprised to see such a backlash when someone speaks out publically against a system that is not designed to support women in the working world.

Creasy’s tweet also stated that flexible working isn’t going far enough to dismantle the motherhood penalty and that we also need flexible networking. One of the comments I saw on Creasy’s Instagram post referred to a ‘Networking Penalty’ in addition to the ‘Motherhood Penalty’. And this really got me thinking.

For those of you who have children, I am sure your decision to start your own business was at least partly a reaction to the motherhood penalty and the many disadvantages we suffer in the workplace after having children.

The Gender Pay Gap

A study from Wharton management professor Tiantian Yang entitled “The Motherhood Wage Penalty and Female Entrepreneurship,” was published online in Organization Science and found that professional Swedish mothers faced an average 5% reduction in their yearly earnings with each child they had. This figure is thought to be much higher in other countries and could be as high as 15-20% in the US for example.

The Fatherhood Bonus

Other research has found that by the time a woman’s first child is 12 years old, her hourly pay rate is on average 33% behind a man’s. To put this in perspective, men seem to benefit from a ‘fatherhood bonus‘ whereby they are more likely to be hired than childless men, and tend to be paid 6% more after they have children. However, the pay gap is not the only disadvantage that women experience.

Expensive Childcare Provision

The UK has the second most expensive childcare system in the world as a proportion of our income (The Slovak Republic is just marginally more expensive). This leaves us paying out a huge percentage of our earnings on childcare. It also means that for many families, it is just not financially viable for a woman to go back to working full-time. This is obviously detrimental to her career progression and can be seen as a lack of commitment.

The Burden of Unpaid Labour

Furthermore, Data from the ONS shows that women do 60% more of the unpaid labour which leaves us unable to dedicate the necessary time to our career progression. In the UK, we work the longest hours in Europe but this is simply not an option for many women looking to progress up the career ladder. This again reinforces the perception that women are not as committed to their employers and their careers.

The Networking Penalty

Three middle-aged women networking

Motherhood also has a detrimental impact on a woman’s ability to network in the workplace. A study of female managers in South Korean firms found that long work hours and time constraints affect women’s marginalization in workplace relationships. Exactly what Creasy was referring to. Women often cannot work long hours and are unavailable to attend after-hours social events where much of the networking takes place.

It stands to reason then that many women, in an attempt to avoid the motherhood penalty, instead decide to embark on the journey of entrepreneurship and set up their own businesses. Indeed, professor Tiantian Yang’s study concluded that the larger the earning penalty that mothers experienced, the more likely they were to leave their employers and start their own businesses.

Yang believes that entrepreneurship is a viable way to advance our careers when we hit the motherhood paywall. But are managerial and professional skills alone enough to start and scale a successful business? I’m tempted to say no here and this brings us right back to Creasy’s point about networking. We mustn’t underestimate the importance of networking in business and all the opportunities that it can bring.

We know from the Natwest Rose Review that a lack of mentors, role models, sponsors and networks is one of the five main barriers faced by female entrepreneurs when trying to start and scale their businesses.

I actually think that networking becomes more of an issue when you work for yourself. At least when you are employed you have some access to colleagues, role models and mentors in the workplace. But when you work for yourself, often from home as many women do, it can be extremely lonely and isolating as you suddenly find yourself with no support network at all and nobody to look to for advice, guidance and encouragement.

For many self-employed women, time constraints are still a major issue when it comes to their ability to network. When you have children, those breakfast networking events run by the chamber of commerce are often out of the question as you’re busy doing the school run. Any events that take place after 5pm can be difficult too as you’re often doing the dinner, bath and bed shift. Weekends? Probably a no-go as well.

Even if networking events occur mid-morning, that can also be troublesome. If you are only able to work between the hours of 09.30am and 2.30pm while the kids are at school, taking two hours out of that already short day to attend a networking event can eat into your workday quite considerably.

So what is a woman to do?

Is Coworking the Answer to the Networking Penalty?

The hands of three women working together at a table

When I first went fully self-employed and spent every day at home frantically working school hours trying to get ahead and scale my business, I definitely felt the networking penalty. I hardly saw anyone I could network with between the mad dash of the school runs. The consequences of this were dire.

When I decided to set up my coworking space in Totnes, Devon, it was clear to me that this could go a long way to help negate the networking penalty. Coming together to work in a shared office space with complete strangers would inevitably lead to networking opportunities. Potentially meeting 1-8 new people everytime you cowork allows you to grow your network and not just in your own industry.

And the best thing about coworking is that no extra time or effort is required for networking. You don’t need to make a special effort to find events to attend or to schedule in events. You don’t even need to find or pay for childcare in order to be able to attend.

Simply book your desk, turn up and get to work as you normally would. But whilst doing this you will meet other women also running their own businesses, with their own connections, skills, expertise and experience. Conversations will occur naturally while you work, collaboration opportunities will appear and connections will be made. And before you know it you will be part of something that turns out to be so much more valuable than a network. You will be part of a community. And believe me, there is a difference.

So, if you have been feeling the effects of the networking penalty in your own business, consider coworking as a way to minimise the effects. Contact Stacey to find out how you can become part of our community and network with like-minded female entrepreneurs.

If you’d like to learn more about how coworking can benefit your business, you might want to read our other blog posts.

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