Research present that ladies are much less prone to apply to male-dominated startups

Mark Zuckerberg, Larry Page, Sergey Brin, Jeff Bezos: What these names have in common is that they are all founders of some of the most powerful companies in tech. The other important similarity is that they are all males.

While there are many female founders – Canva’s Melanie Perkins and Cisco’s Sandy Lerner are just two, along with Mira Murati, the CTO of OpenAI, creator of the much-vaunted ChatGPT – there is significant gender inequality in the tech industry.

There are many systemic reasons for this. Globally, women make up over 50% of the population but own only 1% of total wealth, and cultivating wealth is even more difficult: a study by the United Nations Economic Commission for Europe (UNECE) found that women only have access to 3% . of bank loans.

WEgate, the European portal for women entrepreneurs, reported in its WEbarometer report 2021 that the UNECE findings are valid. Less than 25% of respondents rated the environment for accessing finance as good or better, and many of them are therefore self-financed or financed from family sources.

Other studies have found that 65% of venture capital firms do not have a single female partner and only 12% of decision makers at VC firms are women. Given the male-dominated funding context, it’s not surprising that US startups with all-female teams received just 1.9% of the $238.3 billion in venture capital provided in 2022, according to PitchBook.

broken rung

Other factors holding women back are access to flexible work and childcare. Then there’s the “broken rung,” a workplace phenomenon identified by McKinsey and LeanIn.Org.

It refers to a problem where 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, creating an inequality that is difficult to correct and leading to fewer women in managerial positions.

All of that is grim enough, but a recent study from the University of Amsterdam found that women are far less likely to apply to startups where men are in the majority. Also, women made up less than 15% of the workforce in more than one in five startups in the study, showing that underrepresentation is rampant — and it’s really damaging when there are less than 15% women in an organization , female applicants are almost 30% less likely to apply.

Yuval Engel, first author of the study and professor at the University of Amsterdam, explains how this can become systemic in startups.

Hiring decisions are made by the founders themselves and not by professionals with experience in recruiting and hiring. These founders often tend to recruit from their personal networks and typically do not invest in formalized policies or procedures to guard against bias.

The solutions

It’s easy to understand why women choose not to apply to a small, male-dominated tech startup, and there’s no quick fix to this problem, multifaceted as it is. For women looking for new career opportunities, there are a number of things they can do to screen any size company for gender diversity, both before applying and during the interview phase.

Check the website first: While it’s unlikely that all employees will be listed, those in senior positions should be. Assess the gender distribution – are there women and if so, what roles do they play?

Look at the company’s social media, particularly the company’s LinkedIn page – which employees are listed there and what is the mix of males and females? Another measure, which is usually best for enterprise-level companies, is to check the ranking using Best Places to Work 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.

This means the organization thinks strategically and understands 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.

This is supported by a study by the Boston Consulting Group, which found a significant correlation between the diversity of management teams in overall innovation. Companies that report above-average diversity in their management teams also reported 19% higher innovation revenue than companies with below-average leadership diversity.

During interviews, it’s perfectly acceptable to ask questions about a company’s diversity. One of the best ways to do this is to frame your questions in relation to existing policies – D&I and ESG journeys are not one and done, they are constantly evolving and should be.

Ask questions about progress so far and next steps. If you get blank stares, you know it’s not a priority. Also, ask if there are employee resource groups (ERGs). For example, Microsoft’s Women at Microsoft ERG’s mission is to attract, retain, and develop women around the world.

Finally, know this: if you have the qualifications and experience, you have a right to be in this field. In the words of the late Ruth Bader-Ginsberg, former Associate Justice of the US Supreme Court:

Women belong everywhere where decisions are made. It shouldn’t be that women are the exception.

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