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Studies show that 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 that they are all founders of some of the most powerful tech companies. The other important thing they have in common is that they are all men.

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 acclaimed ChatGPT — there is significant gender disparity in the tech industry.

There are many systemic reasons for this. Globally, women make up more than 50% of the population, but they 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 access to 3% of bank loans.

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WEgate, the European gateway for female entrepreneurship, reported in her WEbarometer report 2021 that UNECE’s findings were valid. Less than 25% of respondents rated the funding access environment as good or better, and as a result many of them self-fund or receive funding from family sources.

Other surveys found that 65% of venture capital firms have no partner who is a woman, and fair 12% of decision makers in VC firms are women. Given the male-dominated funding context, it’s not surprising that by 2022, U.S. startups with all-female teams will receive just 1.9% of the $238.3 billion in venture capital allocated, according to PitchBook.

Broken sports

Additional factors holding women back are access to flexible work and childcare. Then there’s the “broken step,” 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 managers, only 86 women are promoted, creating an inequality that is difficult to correct and results in fewer women in leadership positions.

That’s all nasty enough, but recent study from the University of Amsterdam has found 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 under-representation is common – and it’s also very detrimental, because if there are less than 15% women in an organization, then female applicants will be nearly 30% less likely to apply.

Yuval Engel, the lead 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 rather than professionals experienced 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 protect themselves from bias.

The solutions

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

For starters, check the website: while it’s unlikely to list all employees, those in higher positions should be. Assess the gender distribution: Are there women there, and if so, what kind of roles do they represent?

Look at the company’s social media, especially the LinkedIn company page: which employees work there and what is the mix between men and women? Another metric, which is usually best for enterprise-level companies, is checking the rankings in “best places to work” 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 that the organization thinks strategically and understands the value of women in its workforce. A McKinsey report found a direct correlation between diversity of employees and financial performance with companies in the top 25% in terms of racial and ethnic diversity being 35% more likely to generate higher revenues.

This is supported by a Boston Consulting Group study that found a significant correlation between management team diversity in overall innovation. Companies reported above-average diversity in their management teams and also reported innovation turnover that was 19% higher than those 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 base your questions on existing policies: D&I and ESG travel are not one-and-done, they are and should be constantly evolving.

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

And finally, know this: if you have the qualifications and the experience, you are entitled to this space. In the words of the late Ruth Bader-Ginsberg, former Chief Justice of the U.S. Supreme Court:

Women belong in all places where decisions are made. Women should not be the exception.

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Shreya has been with australiabusinessblog.com for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider australiabusinessblog.com, Shreya seeks to understand an audience before creating memorable, persuasive copy.

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