the importance of diversity and inclusion in the startup culture

The business case for prioritising diversity has never been so clear. Diversity generates higher revenue and encourages innovation, and people are increasingly looking for businesses that embrace diversity. Despite the findings, actions are still lagging behind statements. Diversity action requires decisive strategies and policies and reshaping hiring practices.

A glassdoor survey from 2021 discovered that 76% of employees and job seekers prioritise a diverse culture when considering a new job. This figure highlights why diversity must integrate into the decision-making process in every company, from larger established organisations to emerging startups.

Building a startup is challenging; ensuring you have the adequate cash flow to cover your expenses and taking care of your team can be very difficult. Due to these financial hurdles, its’ easy to focus your attention on the survival strategies and ignore diversity in the early stages of a business, but this approach will ultimately impact your overall success. Increasing the viewpoints within management will lead to determining gaps in the market and reveal more opportunities.

Fresh opinions and perspectives deliver positive results and a new path forward for business leaders. It also appeals to investors and customers who typically favour the benefits of diversity in a business.

Individuals and businesses should look for more perspective, seek support from other groups and connect with other organisations developing diverse workforces. It enables a company to discover more about the challenges and the creative solutions used to overcome them.

According to a recent survey by Glassdoor, over 30% of job seekers won’t apply for a job with a business that lacks diversity within its workforce. Studies indicate that a diverse workforce can be up to 35% more productive. A report by McKinsey suggests that companies with higher gender diversity at the senior level are over 20% more profitable than other less diverse organisations. This data proves how critical diversity is for long-term sustained success.

Startup businesses must prioritise diversity within their approach toward recruitment and retention. Adopting these steps from the early stages requires putting someone in charge of diversity and inclusion. Many large organisations fail to integrate a specialist to manage and lead diversity strategies. Of course, startups may not be in a position to have a specialist diversity role, but someone could still be accountable for monitoring and measuring these plans.

Diversity goes beyond skin colour and gender identity. Startups must consider equal work opportunities for disabled workers and whether older workers are represented fairly. Businesses must remain compassionate to people and their different life situations. The best talent is increasingly attracted to companies with a clear mission and a broader view of what our society needs to progress. How startups respond to emerging talent demands will define our communities for the future.

Case Study - How Startup Talenya supported diversity plans at Stanley Black & Decker

Many businesses have started looking toward startups for support in creating new hiring plans. In the US, the nationwide protests against systematic racism drove businesses nationwide to examine their position regarding inequality and diversity. What became apparent as many companies were using hiring tools that failed to capture the broadest and best applicants on the market.

Startup companies like Talenya raised finance to increase diversity and inclusion and help tackle the diversity problems in the tech industry. Suzan Morno-Wade, EVP and chief HR officer at Xerox, explains that part of their diversity strategy focuses on having a broad pipeline that ensures incoming talent realistically reflects the markets and communities. Xerox adopted Talenya’s AI tools to increase its pool of female candidates and people of colour. Talenya discovered that keywords in applications were impacting the screening process for women and minorities. According to Gal Almog, the CEO and Co-founder of Talenya, minorities and women tend to put down 20 to 30% fewer skills on their profiles. Talenya has created an algorithm that determines and adds missing skills to alleviate these differences.

Liz Wessel, the co-founder of WayUp, explains that the number of applications narrows considerably after a round of technical assessments but believes diversity also declines during this testing stage. Wessel feels that these tests have a high correlation to socioeconomic status. Some startup businesses are focused on the hiring process, while other companies are exploring ways to diversify selected jobs or recruit different talent to increase diversity in the tech market.

Shaan Hathiramani, the CEO of tech sales firm, Flockjay, explains that many people are unaware of the opportunities in tech sales. Hathiramani believes that his business can support the tech industry and many people who have the acquired skills in technology but lack the network to see how they could work in that industry. Like coding camps enabling people to pursue jobs as programmers, Flockjay supports talented people who may not have considered a job in tech to get into the market. It provides a chance for individuals to leverage their skills from other industries and explore the opportunities available within tech. It’s also an opportunity for tech businesses to discover other talented professionals with different skills and opinions.

Like many industries, technology needs to improve its focus on diversity and inclusion. The startup company, The Mom Project, focuses on connecting women, including parents, with opportunities from businesses that employ people who match their profiles. Allison Robinson, the CEO of The Mom Project, explains that over the pandemic, 60% of job losses have been women, and the figures are higher for women of colour.

What is apparent is how important from day one is that a business focuses on how to create an inclusive culture. While startups face numerous challenges in the early days of their development, establishing a clear strategy for diversity and inclusion can create higher success for businesses in the long term.