Product launches, funding, marketing, projected growth, patents, sales, and updates: there’s so much to think about as a tech startup that it’s not surprising issues of diversity and inclusion are often pushed to the back burner.
In fact, in many cases, it’s not until a company is already established that leadership notices the lack of diversity in the workforce – or how frequently women and minorities either quit or seem disengaged.
By neglecting diversity and inclusion, US tech companies are not only losing an estimated $16B a year in turnover costs alone. They’re also driving away valuable employees, restricting their innovation potential, and creating a culture that treats workers unfairly (often with worrying implications for their staff’s mental health).
Diversity and inclusion training can help tech startups avoid these pitfalls and instead create a workplace where employees thrive.
Tech Startups Shouldn’t Overlook Diversity and Inclusion
Diversity and inclusion can provide a competitive edge – something that will help tech startups stand out in a crowded marketplace and that could be the key to competing against industry giants.
In fact, 60% of failed startups flounder due to problems with the team. Even those that succeed will still be held back: on average, companies with poor gender diversity in their executive boards underperform their more diverse competitors by up to 21%. For companies with limited ethnic diversity, that number climbs to 33%.
In contrast, gender-balanced teams and boards see better returns on equity, investment, and growth. Diverse companies also innovate more successfully, with almost half their revenue coming from products developed in the last three years. They can adapt quicker and have overall better finances as a result.
Even better, they’re also up to 30% more likely to spot and reduce business risks. These risks can be costly for any business, but they’re especially damaging for startups that have less capital and fewer income streams to fall back on.
Few companies rely as heavily on innovation as tech startups, or exist in environments as risky and changing. Yet ironically, the tech industry tends to lag behind other fields when it comes to diversity and inclusion.
Even more important than these persuasive statistics, however, is the human impact: diversity and inclusion improve employee well-being. Staff members feel that they belong, they consider themselves part of a team, and they don’t have to expend energy on censoring themselves, hiding their background, or handling microaggressions.
The Culture Issue at Tech Startups
We know that women and minorities are underrepresented in the tech industry, but it’s not just a pipeline issue. It’s also a culture issue – and culture can be hard to create, especially for startups without fully fleshed-out HR policies.
At many tech startups, team members are prized for their grit and innovation, not their ability to spot and prevent harassment. However, in the 2020 WomenWhoTech report, The State of Women in Tech and Startups, over 40% of surveyed female employees and founders had been recently harassed in the workplace or business meetings.
And while startups find that a lack of bureaucracy allows them to react quickly, it also comes with a drawback: fewer frameworks for fair, objective decision-making.
In a three-year study of thousands of workers who voluntarily left technology roles in the US, “unfairness” at work was a key factor in causing people to quit. Interviewees spoke about:
- Being passed over for promotions
- Experiencing or seeing stereotyping, particularly in the case of people of color
- The bullying of LGBTQ staff
- Sexual harassment, particularly of women
- Condescending behavior
- Public humiliation
Women of all backgrounds experienced more unfair behavior than men, but it’s also impossible to ignore the relevance of ethnicity and sexuality. According to the WomenWhoTech survey, one in three Black women felt they had been passed over for a promotion, while 64% of LGBTQ staff had left roles because of bullying.
Diversity and Inclusion Training Makes a Difference
The picture doesn’t have to be as grim as it sounds. Evidence shows that diversity and inclusion training can make a real difference.
The same three-year study that found widespread discrimination and bullying also found that types of diversity and inclusion training could reduce stereotyping and sexual harassment. And when this training was combined with other initiatives, bullying and unfair people management practices also fell.
Diversity and inclusion training can provoke questions and give workers the framework to adopt more inclusive, less stereotyped behavior. Intervention training, for example, has been shown to lead to 80% of attendees taking action when witnessing inappropriate workplace behavior.
After all, hiring women and minorities is pointless if they are not equally paid, promoted, provided with opportunities, respected by colleagues, and able to build a career.
It’s Never too Early to Think About Diversity and Inclusion Training
When building your startup, it’s easy to put diversity and inclusion training off for later. Yet by doing that, you’re starting off on the wrong foot. If your team is already overwhelmingly male, white, and straight, it will be more difficult for you to attract a talented and diverse workforce going forward.
As one Latina UX developer said about her decision to quit, “The general culture there also wasn’t diverse… I felt very isolated… The majority of employees considered themselves to be politically liberal and inclusive, yet minorities represented a small fraction of the workforce.”
With the dizzying speed at which startups grow and the limited budget available for hiring and HR, it’s common for new recruits to be connections of existing team members. Yet this can lead to a homogenous workforce which, in turn, may drive women and minorities away or lead them to feel isolated.
However, implementing diversity and inclusion training early on can help shape your tech startup into a more female- and minority-friendly place to work. Doing so helps employees thrive – and your startup to keep growing.