Increasing gender diversity by addressing and improving the first point of contact with future talent — Job descriptions

Understanding that Women are highly underrepresented in general within business

The fact that women are highly underrepresented, not only in entrepreneurial activities, but also in general within business, and especially in the tech industry, is undeniable. At Female Founders we are actively working to change this, so let’s set the base for our discussion by looking at the hard (and actually pretty sad) facts:

Let’s start with decision-making power in business: 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 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.

When we look at the startup ecosystem specifically, things don’t get any better: The Atomico State of European Tech Report 2018 revealed that 93% of the capital invested in tech companies went to all-male teams. This means that only 7% of funding went to mixed or all-female teams. If you’re wondering if there aren’t any female founders out there, there are: 14,8% of startup founders are actually female. Of course this number is not satisfying (but fortunately growing), but it clearly shows that there is a huge funding gap. One devastating reason for that: There are way too few women in VC. The firms included in the “Europe’s Top Series A Investors” list by Sifted, have 12 female partners.

As you can see, all of these numbers are connected and the only way to improve one of them, is to consistently foster diversity within all sectors. For example: more female VCs would mean more funding, support and encouragement for female-led and mixed ventures, and more female founders in general. If you are now asking yourself why that would be beneficial for a global economy and society, here’s the answer:

Diversity is not only a necessity but is key to success and better overall performance

New research makes it increasingly clear that companies with more diverse workforces (not only talking about gender diversity here), perform better. Financially. It is also proven that more diverse companies are better at attracting and retaining top talent; in increasing customer satisfaction and making decisions. In terms of dealing with a global pandemic, being able to cope with challenges is of very special importance, 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. Taking all of these facts into consideration, it should make sense that a diverse and inclusive leadership and employee base — bringing various approaches, viewpoints & personal experiences to the table — are the keys to succeeding in today’s globalized economy.

Even though the VC industry, as well as many others, are generally willing to foster diversity and gender equality, they seem to be stuck on a strategic and theoretical level. We are seeing that the execution of necessary steps leading to a more diverse environment often fails.

That is why listing shocking numbers and getting worked up about rather sad statistics hasn’t changed anything yet, and — most likely — isn’t going to do the job in the future. We at Female Founders have observed a few things you can do to actively implement diversity within your organization. These implementation strategies include: creating more flexible working arrangements, more structure and determination during the implementation process, more networking opportunities and putting an end to everlasting (and often incorrect) excuses for a lack of diversity. We can even define the one step where fostering diversity begins: the way you advertise for job openings. The way you write your job postings, how you approach female applicants and how you attract female talent, is the first and most crucial step of fostering diversity.

For this reason, and many others, we were pretty excited that SIGNA Innovations reached out to us to work on a very specific project: Creating job postings that attract female talent to bring diversity to their investment team. This partnership and the outcome of our collaboration perfectly shows that change actually is possible, way easier to execute than some might think, and only accessible by actively working for it — with the right partners.

Now — handing over the mic to our friends from SIGNA Innovations to share insights about our collaboration and the exciting outcome.

What happens if you address the issue right from the start

As a sector-specific VC and part of the SIGNA Group, SIGNA Innovations is an active early stage investor with a focus on Proptech, ConTech & Cleantech. We started with a team of 4 people just two years ago and have continuously been looking to strengthen the team from the beginning. In an effort to grow the team, we have been advertising for internships 3–4 times a year and in early 2020 put out a job offer for an investment associate position, which we successfully filled. After having received about 120 applications for various positions so far, we noticed that the percentage of female applicants was alarmingly low. When looking at the received applicants for the associate position, it was less than 10% and when looking at the applications for the internship positions, it was around 12%. Considering that only about 5% of the applicants get an offer at all, the basic probability of a woman successfully moving through the funnel is extremely low. Basically, the above gender split allows for only two possible reasons. 1) Either there are simply an extremely small number of female applicants interested in the VC business or 2) we are not reaching female applicants.

We took it upon us to prove that up until today we had failed to adequately approach and reach female applicants. With the underlying assumption that our applications were biased and written to attract a predominantly male audience, we went out and got in touch with Female Founders as well as some other female leaders in the startup ecosystem. We asked them if they could take a closer look at the application, the job description, the written text & images and challenge the entire piece. We wanted to know if what we had written and created had an equal appeal for both women and men.

And what did we learn? First of all showing and offering impact plays a huge role in attracting female talent. In addition we need to look for “Talent” rather than specific skills and as various studies suggest that women tend to apply more often if they meet all the criteria mentioned in the job description rather than only some. Male applicants, on the other hand, have a much lower threshold in this regard and apply even if they only meet a small handful of the criteria mentioned. We found that spending more time on describing our vision, culture and team dynamic would play a greater role and that would most likely lead to having more women feeling addressed and interested in applying.

We sat down with Female Founders and redrafted the application, including as much of the above as possible — had it cross-checked and sent it out, waiting to receive the first application.

Understanding what applicants see and taking active steps give access to a larger and diverse talent pool

As applications started rolling in, we prepared a balanced scorecard to evenly and equally evaluate all applicants on the same metrics and define the application process

So, let’s look at our application process:

Kick Off: All applications we received were reviewed and scored — in total, 58 applications.

Round 1 Interview: We held 30-minute interviews with all applicants that had at least one significant touchpoint with VC or technology-driven companies as a prior experience, either during their studies at university or through their jobs. During those interviews, we scored all applicants with a balanced scorecard to get a clear overview of their skills and experiences.

Round 2 Case Study: All applicants that had an overall score higher than 60% received a case study consisting of a cap table exercise and one qualitative question to be answered — “Which of our portfolio companies should we not have invested in”.

Round 3 Case study review & 2nd interview: After reviewing the case study in terms of quality of content and form, we conducted a final interview with the applicants to discuss the case study results and especially their approach towards both parts.

Offer: For the final few, we offered them an internship!

Now, lets take a look at the gender split throughout the different steps:

Although the results speak for themselves, what was excitingly noticeable right from the beginning, was that “just” by changing and adapting the application, we were able to move the percentage of female applicants from 12% over the past two years to 40% this time! Although just missing our goal of 50%, this is a huge step up from previous experiences.

Where things start getting interesting is post receiving the applications. Female applicants outperformed male applicants across the board and were tracked with help of the BSC and case study results.

It was one thing to see that making small changes, results in a stronger diversity amongst candidates. But even more impressive was the realization that having access to that diversity led to reaching an extremely talented professional we may have never met otherwise.