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02 Fri Jul

Diversity and Inclusion – all the whys & hows you have to know

Diversity and Inclusion is an increasingly popular topic in the world of tech and innovation. From large corporations to startups and accelerator programs to VCs and other investors, there is a lot of talk around these two words. We are constantly hearing about the efforts to achieve diversity or action plans to be more inclusive. But what does this actually mean? Why is the topic becoming more and more popular in the first place? Is the lack of diversity and inclusion really such a big problem?

The simple answer to this last question is: YES! It is a huge problem, for multiple reasons. When you want to become the leader of tomorrow, you have to be aware of these problems. And if we are being completely honest, if it wasn’t a problem, there wouldn’t be a need for what we are doing at Female Founders. But before getting into that, let’s back up a couple of steps and go over the basics:

Defining diversity and inclusion

Even though the two words often lumped together in the workplace, Diversity and Inclusion are not the same things. They are, however, closely related to each other, but they have their own separate and equally important meanings.

Diversity in the workplace is referring to the presence of different traits and characteristics represented by the team members of an organization. Some of the most commonly considered aspects of diversity are age, gender, race, ethnicity, physical and mental ability, but can include many more.

Inclusion is making reference to the behaviors, norms and culture of a workplace that allow diverse team members to feel welcomed and, well, included. Inclusion is about celebrating the differences within a team and recognizing the individual needs that must be met in order for all team members to be at their best. A workplace with a great inclusion culture will embrace different types of work, practices and paths to success.

At Female Founders we are primarily focused on the aspect of gender diversity and the inclusion of women, specifically in the tech and innovation scene. Through our experience, we have learned that when tackling the issues of diversity, all minority groups need to come together and support each other. That is why we partner with organizations that specialize in diversity aspects other than gender.

Gender disparity in the European startup ecosystem

The startup ecosystem is booming, and joining a startup seems like the new hype. In the State of European tech report for 2020, Atomico reported that all-male founding teams received over 90% of the total capital raised that year. That means that startups with mixed or all-female founding teams received less than 10% of the funding raised in 2020, and this is an even smaller amount than the year before. These numbers aren’t necessarily shocking when we look at the low number of female investors within the startup hubs across Europe.

In sifted’s recent article on the number of women in European Venture Capital firms, they shared that in the UK women represent only 13% of senior investment positions at VC firms. Moreover, in the CEE region, 81% of VC firms don’t have any female general partners. When looking at the number of women who hold leadership positions within companies, the situation is equally as grim. Women hold 37% of managerial positions, 28% of all board seats, and 18% of senior executive positions of the publicly listed companies in the EU. As I’m sure you can imagine, these numbers drop even more when looking solely at these roles in the tech scene.

Why is the lack of gender diversity a problem?

As the founder of Trending Topics, Bastian Kellhofer said, diversity is crucial, especially within the founding team. In regards to the statistics, women represent 50% of the European population, but that is not reflected by the people who are shaping society through the decisions that are made and the technology that we use in our everyday lives.

Only 27,8% of board members of the largest publicly-listed companies registered in EU countries are women. Looking at the gender composition of executive-level positions in 2018 in Europe, for every 1 female executive, there are 12 male executives. On the tech side, the stats show that only 17% of ICT specialists are women.

And these problems perpetuate themselves. Having fewer women in these important roles means fewer women can see themselves in them, thinking about entering the field or starting their own business. We believe that tech should be created for everyone and in order for this to happen it needs to be created by everyone.

To make a change, we need to start putting more women in all spaces of tech and innovation. This is what we are actively trying to do at Female Founders: by providing access to funding for female-led startups with our startup accelerator (Grow F) and promoting female talent in the tech industry through our leadership accelerator (Lead F).

Why diversity and inclusion matter in the workplace?

Moving to a smaller scale and looking at individual businesses, companies who lack a diverse team miss out on half the talent pool, untapped creative potential, varying strategic perspectives and ideas for growth. According to the founder of Planetly, Anna Alex, diversity and diverse skillset is very important for real startup success. This is one of the main reasons, why the importance of diversity and inclusion is so high! From a business perspective, it’s simply not smart to miss out on these great talents.

Research shows that diverse teams perform better across the board. Financially, diverse teams have proven to be more successful than all-male ones, driving more business value. Research also shows that more diverse companies are better at attracting and retaining top talent; in increasing customer satisfaction and making decisions. In terms of dealing with the current global pandemic, being able to cope with challenges is more important than ever, and the fact that female entrepreneurs tend to be more resilient than male ones, and are proven to handle stress better, gives women a clear advantage here.

How to promote diversity and inclusion in the workplace

At this point, you might be unsure, what diversity and inclusion initiatives exactly are. How to measure diversity and inclusion is certainly not easy… Instead, coming up with well-defined initiatives will help you create a great foundation for D&I. At Female Founders, for example, on top of our accelerator programs for female entrepreneurs we have also come up with some clear actions that companies can take in order to improve diversity and inclusion on their teams.

Examples for diversity and inclusion initiatives

For example, creating more flexible working hours that reflect the needs of responsibilities outside of work. Or an office environment that is a comfortable space for men and women. This can look like different equipment, space for daycare or the recognition of the importance of childcare. Other examples include more determination during the implementation process of building a diverse team. For instance, following through with inclusiveness, more networking opportunities and putting an end to everlasting (and often incorrect) excuses for a lack of diversity.

We have also defined the one step where fostering diversity begins: the way you post job openings and hire new team members. The language used in your job descriptions, how you approach female applicants and talents and the approach you take to the hiring process is a crucial first step of fostering diversity. Here are three concrete actions you can take:

Introduce blind CVs

Unfortunately, across Europe and especially the DACH region it is still a common requirement to insert information about your gender and an application photo. Although portrayed as a usual way of evaluating an applicant’s personality, it increases the potential for biased decision making, even when not done intentionally.

Reduce the (skill) requirements to a minimum

Ensure that the criteria listed are a must-have and 100% essential for the job. Women are less likely to apply for a job where they believe that they do not meet requirements stated in the job description and most of the time they do not apply unless they meet 100% of them. So, only include skills that are really essential for the job and not skills that are “nice to have” or even easily teachable.

Review the role descriptions and ensure use of inclusive language
Most of the time, job descriptions are written using masculine coded phrases. Research has shown that certain stereotypical words keep women away from applying to jobs that might have been otherwise interesting. Here are two examples:

Masculine coded phrase:

  • Superior ability to satisfy customers
  • Strong communication and influencing skills

Feminine coded phrases

  • Sensitive to the customer’s needs or can develop warm customer relations
  • Proficient oral & written communication skills

71% of the employers who’ve adopted diversity practices experienced a distinct and positive impact on their recruitment efforts.

When looking at diversity and inclusion, and especially the shocking numbers that show how far we need to go to reach a more acceptable level of equality it can be discouraging. It’s important to remember that (although slowly) progress is happening and any small action taken towards change truly can have a big impact! We have also seen that the largest changes happen when different players involved in the startup ecosystems work together and support each other in becoming a more inclusive space. We are always looking for opportunities to make meaningful connections and provide resources regarding D&I to the members of our community. If you are interested in this topic and want to learn more, sign up for our newsletter below to get bi-weekly updates straight to your inbox!

Conclusion

Diversity and inclusion have many benefits in the workplace. But first, you have to define, what’s the meaning of diversity and inclusion for you, and how you want to tackle the problems surrounding this topic! See how diversity and inclusion can drive business value, why it is important, and what are some of the specific examples you should avoid. And if you wish to leverage all the great opportunities a diverse and inclusive workplace has, make sure to adapt all the tips above!

Need help starting your D&I initiatives? Reach out to amelia@female-founders.org for more information about how we can support you!