Of all of the things that entrepreneurs have to worry about, diversity might seem to be somewhat low down on the agenda. Research from the University of Amsterdam suggests that might be a mistake and that gender diversity should be something that is considered right from the start.
The researchers examined why women tend to be underrepresented among employees at startups and found a self-reinforcing pattern that they refer to as a form of “diversity debt”. This is a scenario in which startups that already have few female employees have greater difficulty attracting any women to join them, which creates a vicious cycle that sees the startup workforce dominated by men.
Unjust claims
As a result, the researchers don’t believe that the common refrain that there aren’t enough women to be found in the tech industry stacks up.
“Companies may sometimes not see enough women entering their candidate pools and quickly conclude that women are just not there to begin with,” they explain. “However, employers might also not see qualified women because these women just won’t apply to workplaces with a bad diversity track record. If you were a woman, would you want to work for a company where you are by far in the minority? Some do, most don’t.”
The only way this cycle can be broken is if founding teams both have a good gender mix within them and they ensure that early employees are also diverse. If the business starts off with a homogenous group then it’s a very difficult pattern to break.
Focusing on the wrong things
This pattern can often be exacerbated by the fact that founders often pay scant attention to diversity, or the lack thereof, in their team. Instead, they have an almost laser-like focus on growth at all costs, with everything else pushed to the margins.
“This aspect is neglected until it becomes a problem beyond repair. But it can become an issue even in the early stages,” the researchers explain. “It takes several recruitment rounds to straighten out the difference between 5 men and 1 woman. You can imagine how much more difficult this gets if you start working a year later trying to address the difference between 50 men and 10 women.”
In a recent article, I highlighted research showing that diversity data is an effective recruitment tool as younger workers want to work for diverse organizations, so those that have that can gain an edge over their rivals. This appears to be the case in the startup world as well as the corporate world.
“Our research shows that women interested in a startup want to know more about the gender distribution in the workplace. If they see startups that signal diversity debt, women could worry about how they might be treated,” the researchers conclude. “Companies that realize they may be accumulating diversity debt in the early stages can focus on communication that openly acknowledges this issue.”
