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Guide

11 ways to build diverse, equitable and inclusive startups

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Guide

11 ways to build diverse, equitable and inclusive startups

Words Alice Sandelson

December 15th 2021 / 10 min read

Written in collaboration with Davina Majeethia, Senior Lead for Equity, Diversity & Inclusion at Nesta

Beyond the obvious excitement of building a new product or service from scratch, startup founders have another incredible opportunity: to define and create a new company culture from the ground up.

The core of a company’s culture comes down to policies introduced that foster diversity, equity and inclusion (DEI) into the business’ DNA. Indeed, the business case and evidence is indisputable: diverse and inclusive companies consistently perform better, and inclusive leaders are good for business.

Creating DEI policies at the foundation of a business’ life will go a long way in helping overcome the biases that underrepresented groups (including women, minoritised ethnicities, LGBTQIA+ communities, and disabled people) face in the hiring process, as well as the challenges put in their way of success in the workplace after being hired. Moreover, for leaders, introducing DEI policies and practices in the early stages will help avoid the often awkward and timely practice of retrofitting your business which can also reveal past practices that disadvantaged minoritised groups.

Here, we share knowledge, insight, and best practice for founders to build diverse, equal, and inclusive businesses in the form of 11 practical tips.

Where to begin:

The first step in any startup's DEI journey is to understand the current DEI context of the business and come up with an action plan of what you’re going to focus on (the points in this article should serve as inspiration).

Take time to think through targets and action plans to execute. Any bold statements to colleagues, investors or customers could seem empty if there isn’t an action plan in place. Equally, these statements could fall foul to superficiality if minoritised or underrepresented talent have not been meaningfully consulted or listened to at some point through the process.

Finally, accountability for your DEI strategy should be agreed upon before you embark—including measurable metrics and action owners. Ideally, accountability would be shaped in such a way that DEI is everyone’s responsibility, with different team members focused on different objectives. Accountability and responsibilities will of course change as the business grows (especially if you bring in a people function), but in the early stages, we recommend final oversight sits with the Founder.

How to hire diverse talent

1. Ensure equality of opportunity in hiring processes and take action to reduce bias

In this context, equality of opportunity means ensuring that there is a fair representation of diverse candidates throughout each stage of the talent pipeline, including the final stage. What we mean by ‘diverse’ will depend on the context and the current makeup of your team.

Ensuring equality of opportunity requires setting targets for each stage of the pipeline: for instance, aiming for 50% women candidates and 30% minoritised ethnic candidates at the first stage of interview, and ensuring there is at least two or more diverse candidates at the final stage.

This can go a long way. A Harvard Business Review study showed the impact of having more diverse candidates in the hiring pool:

You should also be conscious of overcoming biases that are an obstacle to a diverse hiring process. Tools like Textio or Gender Decoder can help you to validate inclusive language in your job postings.

For the interviews, you should aim to build interview panels that are as diverse as possible from an ethnicity and gender perspective, and host calibration meetings before interviews to ensure that the team conducting the interviews are aligned on hiring criteria, to try and prevent individual bias affecting decision making.

2. Widen the applicant pool beyond traditional sources

One common excuse for not hiring diversely is that the talent pool (particularly in tech) is not representative enough, if at all, of women and minoritised ethnicities. But there are brilliant organisations out there today with communities of diverse candidates looking for opportunities.

Focus your attention towards organisations or communities that actively increase access to jobs for diverse candidates. We recommend organisations like UKBlackTech, Women in Tech, and Black Valley, all of whom have job boards directed specifically towards underrepresented groups. If you’re working with recruiters, you should identify a recruiter with a track record for DEI , and make sure to make your targets known to them in advance.

In order to make diverse hiring easier going forward, you should also continuously assess whether the organisations you are working with to find talent are leading to proportional diversity in the talent pool. You can do this by asking very explicitly in job applications where the applicant heard about the job, or, by analysing click through to your job page to see which sites people are coming from.

How to create an inclusive culture

3. Launch a Code of Conduct

Larger tech companies have recently come under scrutiny for their working environment and company culture. You’ll no doubt remember that accusations of Uber’s toxic masculine culture saw the launch of an internal investigation into sexual harassment and abuse, which resulted in the resignation of former CEO Travis Kalanick. Or that Tesla recently paid out $137 million to a former employee who had been racially abused.

Creating and publishing a Code of Conduct at the outset of your business is the first step, allowing you to clearly define and sustain an environment which is comfortable for everyone to work in. This should include a Zero Tolerance harassment policy, which provides clear information and reporting lines should employees need to report anything.

Here is our Code of Conduct template that you can copy or edit for your own company.

Embedding this Code of Conduct is another feat. Depending on the culture of your organisation you need to find a way to ensure each employee truly understands what they are signing up to. This could include the CoC being made part of onboarding materials, that all managers are required to go through with new employees, or having quarterly team reviews of the CoC to see whether updates should be made.

4. Design an inclusive family leave policy

Current statutory maternity and paternity leave assumes that there will be one primary carer for children—the mother—which binds families to prescribed gender roles. For LGBTQIA+ couples and families, primary and secondary caregivers aren’t clearly defined, often making shared parental leave the only choice, which can be a far less economical option for families.

To counter these challenges, founders should aim to design family leave policies that are equitable to all parental carers. You should engage in this policy development actively even if none of your current employees have children or other care obligations, as it will show to prospective candidates that you are inclusive of parents and caregivers. In order to encourage this behaviour, senior managers, particularly men, can have a big impact as top-down role models by taking the advantage of the policy when the situation arises. It is also important to ensure that these policies have gender neutral language.

You should also design a returnship program (including “keeping in touch days”) to help team members transition back into the workplace after an extended leave of absence, without impacting their parental pay.

You can see the Diversity VC Parental Leave Guide for more details.

5. Introduce flexible work policies

The rise of flexible working over the past 18 months has been a huge asset for companies looking to hire more diversely and create a more inclusive culture. Startups that establish flexible or working-from-home arrangements can accommodate candidates better suited for remote opportunities (either because of geography or other commitments including caregiving).

You might also introduce a ‘Core Hours’ policy—allowing employees to vary their arrival and departure times while working around a fixed core hours (e.g. 10am to 4pm). You should back this up with a no-meetings without request policy outside of core hours.

6. Conduct equal pay analysis

The first step towards closing gender and ethnicity pay gaps across your organisation, is to conduct an audit of total compensation for individuals working across the same level. This will allow you to identify any discrepancies.

You should also conduct this in comparison to industry-wide compensation, identifying any pay gaps from a systemic perspective.

Here is People Management’s guide to conducting an equal pay analysis.

7. Conduct learning development and mentorship programs that factor in needs of underrepresented teammates

Investing in your employees skills and personal development will go a long way in enhancing the diverse and inclusive culture in your business. Set aside a budget for learning development, make sure all your employees know that this is available to them (and what it’s for), and keep track of who has taken advantage of the budget to make sure it is equally distributed.

Another way you can enhance personal development, and foster a supportive working environment, is by setting up mentorship programs between junior and senior employees. One of the biggest barriers to diversity in tech is a lack of identifiable mentors. So provide everyone with training on how to make the most of these mentorship opportunities, particularly emphasising this for underrepresented teammates. If you do not feel you have the skills in-house to provide adequate mentorship that meet the needs of your team, consider partnering with people externally who can supplement the offering.

8. Conduct culture surveys and hold retrospectives

To get an accurate picture of culture and working environment, you should conduct regular surveys to measure your employees’ experiences. Even small startups (2 or 3 employees) should start doing this to integrate the practice into your culture.

One such example is the Employee Net Promoter Score (eNPS), which measures overall employee engagement and loyalty toward a business based on how likely they are to recommend them. Conducting these surveys quarterly will allow you to track progress over time, measured against industry benchmarks as well as your own targets.

Here’s more information on setting up an eNPS survey

Equally, holding retrospectives with all team members, but especially minoritised or underrepresented talent ensures that you gain a robust understanding of existing issues, and meaningfully consult and listen to their views on how to improve.

9. Offer mental health support

The often-stressful environment of working in a startup may leave little time to think about employee mental health. But it’s vital that employees have access to mental health policies and tools. Some recommended tools include Sanctuary, an employee wellbeing platform including self care audio guides, breathwork, and meditations. Or there’s InsideOut, a platform providing on-demand video counselling. As you grow, consider having a ‘Trusted Person or People’, who are trained to be a listening ear (this should not be a replacement for formalised therapy or counselling).

It is also important that employees feel able to share their own experiences and mental health. Fostering a continuous, open conversation often starts with your leadership team: read Founders Factory’s Chief Commercial Officer Damian Routley’s story and some of his own actionable insights for founders.

10. Create inclusive office spaces

If you’re still committed to having an office as the centre of your business functions, you should be conscious of making it as inclusive as possible. This includes making it wheelchair accessible; if it isn’t, make a commitment to incorporate this into your next office space, and identify nearby events spaces with wheelchair access.

If possible, designate a ‘quiet room’. This can be available for a multitude of purposes: breastfeeding, prayer, meditation, for instance. If this isn’t possible in your current setup, or should you not need it at the time being, create an action plan for when the need arises.

Other DEI best practices:

11. Publish an organisational DEI statement

Be proactive about showing your company’s own strategy around enhancing diversity, equity, and inclusion by developing and clearly publicising a statement of your commitments. This should include the changes you’re looking to drive in your own organisation, as well as in the wider industry.

You can read Founders Factory’s DEI commitments here.

About Alice

Alice Sandelson is Head of Strategic Partnerships at Founders Factory. She also leads Founders Factory's diversity and inclusion committee, as well as the FF Women+ Network.