The tech industry has historically struggled with diversity and inclusion, and while many founders acknowledge its importance, few have taken proactive steps to reduce bias and improve diversity in the workplace.
According to their own diversity reports, 70% of Google's staff are male, as well as 84% of Facebook's tech team, while Twitter's leadership is 72% white and 28% Asian.
In a new study conducted by Lawless Research on behalf of Techstars and Chase for Business, 72% of tech founders believe building a diverse workforce is very important, and 81% acknowledge that a diverse workforce enhances creativity and innovation. The same study, however, found that only 12% employ five or more employees from diverse or underrepresented backgrounds. The study also notes that while 92% of founders are at least familiar with the term "unconscious bias," only 45% have taken steps to combat it.
The study gathered responses from 680 tech founders and executives from companies established within the past seven years. While some major companies like Intel, Google, and Pinterest are taking proactive steps to improve the diversity of their workforce, the study concludes that early stage companies, particularly those founded in the past two years, are most likely to have no women or minorities in tech positions.
Those who champion diverse workforce initiatives, however, have a proven advantage. A 2015 study by McKinsey and Company found that companies in the top quartile for gender diversity were 15% more likely to outperform their competitors, while those in the top quartile for ethnic diversity were 35% more likely to see financial performances above the national industry median.
Other studies have found that companies run by women achieve 35% higher returns on investment, and a recent report by Intel found that a diverse workforce increases revenues, profits, and market value.
"In this report, it said that improving ethnic and gender diversity in the U.S. technology workforce could create between $470 billion and $570 billion in new value to the industry, and could add as much as 1.2 to 1.6 percentage points to the national GDP," Danielle Brown, Intel’s chief diversity and inclusion officer, told Fast Company.
In spite of the mountain of evidence to the contrary, however, only 23% of respondents of this survey believe diversity improves financial performance.
While hiring practices are a significant area of improvement for many founders, it is only one part of the equation, the study explains. Training and development programs, employee benefits, and management practices must be considered in order to retain a more diverse workforce.
In fact, the study’s authors specifically recommend a seven-point plan for improving diversity and inclusiveness, especially for early-stage companies. Those steps are:
- Companies with higher numbers of diverse technical employees are more likely to standardize their interview process, ensuring that all candidates are asked identical questions.
- Advertising and recruiting in nontraditional venues helps startups find qualified technical professionals who are women and minorities.
- Startups classified as diversity leaders are more likely to provide their employees with technical professional development, leadership training, and mentoring programs.
- Offering parental leave and leave of absence can help startups increase tech diversity.
- Startups can increase the diversity of their technical staff by examining bias in their management practices, such as auditing jobs for pay equity.
- Ensure that measurable steps for promotion are clearly articulated.
- Examine task assignment processes as well as performance evaluation tools and criteria for bias.
These are similar strategies to the ones laid out by researchers from Harvard and Tel Aviv universities who have studied why traditional diversity and inclusion initiatives like training often fail. "Companies are basically doubling down on the same approaches they’ve used since the 1960s—which often make things worse, not better," they wrote. They additionally advise businesses to encourage contact between groups, social accountability, and appoint diversity managers.
Startups have an advantage established companies don't. They can build diversity into their organizations from the beginning. Of course inclusion can be a challenge, even to those most committed to seeing it through, but it's proven itself worth the extra effort. At the startup recruiting platform Jopwell, the first four employees were former schoolmates or work associates. As cofounder Porter Braswell told Fast Company in a previous interview: "I think it is okay to hire people you trust and know, but you can’t build a product that is going to change the way people interact and change the world without diversity in your organization."