Studies show women are less likely to apply for jobs at male-dominated startups
Mark Zuckerberg, Larry Page, Sergey Brin, Jeff Bezos: what these names have in common is they are all founders of some of tech’s most powerful companies. The other key thing they have in common is they’re all men.
While there are many women founders—Melanie Perkins of Canva and Sandy Lerner of Cisco are just two, along with Mira Murati, the CTO of OpenAI, creator of the much-lauded ChatGPT—there is a significant gender disparity in the technology industry.
There are many systemic reasons for this. Globally, women make up over 50% of the population, but own only 1% of the total wealth, and cultivating wealth is even more difficult: a United Nations Economic Commission for Europe (UNECE) study found that women only have access to 3% of bank loans.
WEgate, the European gateway for women’s entrepreneurship, reported in its 2021 WEbarometer report that UNECE’s findings held water. Less than 25% of its respondents rated the environment for accessing finance as good or better, and as a result many of them self-fund or get finance from family sources.
Other studies found that 65% of venture capital firms do not have a single partner who is a woman, and just 12% of decision makers at VC firms are women. Given the male-domainated financing context, it isn’t surprising that in 2022, US startups with all-women teams only got 1.9% out of the $238.3 billion in venture capital allocated, according to PitchBook.
Broken rung
Additional factors that hold women back are access to flexible work and childcare. Then there is the “broken rung,” a workplace phenomenon identified by McKinsey and LeanIn.Org.
It refers to a problem whereby women in entry level positions are promoted to managerial positions at much lower rates than men. For every 100 men promoted to manager, only 86 women are promoted, which causes a disparity that is hard to correct, and results in fewer women in leadership positions.
All that is dismal enough, but a recent study from the University of Amsterdam has discovered that women are much less likely to apply to startups where men are in the majority. Women also made up less than 15% of the workforce in more than one in five startups in the study, showing that underrepresentation is common—and it’s also really detrimental, because when there are less than 15% of women in an organisation, women applicants are almost 30% less likely to apply.
Yuval Engel, the lead author of the research and a professor at the University of Amsterdam, explains how this can become systemic in startups.
Hiring decisions are made by the founders themselves rather than professionals experienced in recruitment and hiring. These founders often gravitate towards recruiting from their personal networks and do not typically invest in any formalised policies or procedures to protect themselves from bias.
The solutions
It’s easy to understand why women might choose to opt out of applying for a job at a small, male-dominated tech startup, and there is no quick fix for this problem, multi-faceted as it is. For women looking for new career opportunities, there are a number of things they can do to assess a company of any size for its gender diversity, both pre-application and at interview stage.
For starters, check its website: while it’s unlikely that all employees will be listed, those holding senior positions should be. Assess the gender split—are there any women there, and if so, what sort of roles do they represent?
Look at the company’s social media, in particular its LinkedIn business page—what employees are listed as working there and what is the mix of men versus women? Another measure, usually best for enterprise-level companies, is to check its ranking on “best workplaces”-type reports.
Establishing a company’s diversity and inclusion (D&I) and environmental, social, and governance (ESG) policies is another key indicator of a workplace that supports diversity.
It means the organisation is thinking strategically and will understand the value of women in its workforce. A McKinsey report found a direct correlation between employee diversity and financial performance with companies in the top 25% for racial and ethnic diversity being 35% more likely to generate higher revenues.
Backing this up is a Boston Consulting Group study which found a significant correlation between the diversity of management teams in overall innovation. Companies reporting above-average diversity on their management teams also reported innovation revenue that was 19% higher than that of companies with below-average leadership diversity.
When it comes to the interview stage, it’s perfectly acceptable to ask questions about a company’s diversity. One of the best ways to do this is to couch your queries around any existing policies—D&I and ESG journeys are not one and done, they are, and should be, ever-evolving.
Ask questions about progress so far, and what the next steps are. If you get blank stares, you’ll know it is not a priority. Ask too, if there are any employee resource groups (ERGs) in place. For example, Microsoft’s Women at Microsoft ERG has a mission to attract, retain, and develop women around the world.
And lastly, know this: if you have the qualifications and the experience, you are entitled to be in this space. In the words of the late Ruth Bader-Ginsberg, former associate justice of the US Supreme Court,
Women belong in all places where decisions are being made. It shouldn’t be that women are the exception.
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