Women In Tech: Why Startups Need To Focus On Gender Diversity

Sheryl Sandberg, one of the foremost global leaders in tech, once said “We need women at all levels, including the top, to change the dynamic, reshape the conversation, and to make sure women’s voices are heard and heeded, not overlooked and ignored.”

Having women in positions of leadership accomplishes all of this and more. We’ve discovered that it has a positive ripple effect not only on the gender ratio at work and providing more role models for other women, but also on overall organisational culture. 

Let’s start at the beginning: the fact that women are underrepresented in the workforce is not news. It’s a problem we’ve been dealing with globally, and especially in India, for decades; a problem that only gets worse at the top of the ladder. 

We recently conducted a detailed culture study titled ‘Startups Employees Love (SEL)’ in which over 50,000 employees from 150+ startups were surveyed. Our goal was to determine what makes employees happy at work, what their companies excel at, and what needs to be improved. This survey, which measured the startups’ eNPS (employee Net Promoter Score®) across multiple dimensions, provided us with an unprecedented amount of data (over 2.5 Mn data points! ), as well as a number of eye-opening insights.

One of the aspects we investigated was how the startup ecosystem fared among female employees. 

We discovered that gender diversity is higher in startups in India than in large corporations. Women account for 35% of the workforce in Indian startups. While there is still room for improvement, this figure is significantly higher than the white-collar workforce as a whole. 

What stood out to us, however, was that the eNPS among female employees was 18 points lower on average than the eNPS among male employees. This indicates that women in the startup ecosystem are less happy and fulfilled than men. 

The eNPS Gender Gap

There is a very clear reason for this disparity in eNPS scores between men and women. Having fewer women in a firm leads to a vicious cycle of under-representation and non-inclusive policies that create an unsuitable, if not dangerous, workplace for women. 

For starters, many startups lack the procedures in place to deal with sexual harassment and casual sexism. “Higher-ups in my company make jokes out of anything, and employees copy them,” one woman explained. Leaders appear to be unaware of how unsafe it makes women feel.

Women in male-dominated teams frequently feel overlooked or ignored when important business decisions are made. Furthermore, having poor representation in teams can lead to poor business decisions. One lifestyle company took an average of 25 days to convert female customers versus 15 days for male customers. No points for guessing why — it was because there were no women on the team. 

While women make up 34% of the startup workforce, this figure drops dramatically at the top. Women make up less than 20% of startup leaders, and many startups lack CXOs, which means fewer role models and mentors for women in these companies. These organisations are also perceived to have unequal hiring and promotion practices, which leads to female attrition and further deterioration of the gender ratio.

Add in annoyances like poor restroom facilities, maternity policies, and unsafe working hours, and you have a workplace that isn’t designed for women to thrive. 

Bridging The Gap

While there are no silver bullets, the one obvious solution to all of these problems is to hire more women, particularly at the top.

Here’s why: startups with more than 40% female leadership have a higher overall eNPS, which is 7 points higher on average than startups with less than 10% female leadership. 

It’s easy to see why: women leaders help build more inclusive policies, serve as role models, and signal a lack of gender bias in the organisation’s long-term growth – all of which contribute to women’s happiness. 

One woman shared that her manager’s presence gave her more confidence in her role. “I work in customer service,” she said, “And some customers can be really sexist and condescending on the phone. I feel lucky that my team is led by Ekta (name changed) — she has been in my shoes before and I don’t feel the need to explain why I drop certain calls.”

Startups should view gender diversity as a win-win proposition that benefits the entire organisation, rather than simply a fairness initiative to be completed.