According to data from the salary benchmarking platform Figures, the gender pay gap at startups in the UK is more than double the national average, and is the worst in the finance and tech sector.  For every £1 men at startups, women get paid 70p. We think that’s a pretty shocking statistic. But why is it like this – and how can you, as a founder, work against this inequality in your startup?

Why are the gender pay gap statistics at startups so poor?

It’s worth prefacing this by saying a company having a gender pay gap doesn’t necessarily mean they are paying women less for doing the same job – which is obviously illegal, as per the Equal Pay Act of 1970 and more recently the Equality Act of 2010. Instead, it often means that less women are in high-paying or senior roles in the company. This could be because of a lack of career progression opportunities, unfair recruitment practices or maybe bias in promotion channels. Sifted found that six in seven C-suite roles are held by men – whilst 34% of startup boards still include no women at all.

So why is this?

Some startup founders might have you believe the recruitment pool of women in tech is just sparse, and that’s why the gender pay gap is so much worse. But really this is only part of the picture. The truth is it starts very early on, from the bootstrapping stage onwards; many startup investors just don’t care enough about equal pay and gender parity. It’s an unfortunate truth, but as pay gap consultant Michelle Gyimah says, ‘startups currently are not rewarded for building equitable workplaces, only for having viable product for investors to invest in’. While obviously partners and angel investors are going to be concerned with profit, if this is at the expense of being an equitable company, it’s only going to hurt them in the long run. Less diverse and inclusive workforces are proven to be less productive long-term.

It's also about accountability – or more importantly, a lack of it. Since 2017 companies with a workforce of more than 250 employees have been required by law to submit a gender pay gap report to the government. The difficulty is this often doesn’t apply to startups with low headcounts. Their smaller workforce often means they have less governance or transparency, so they can get away with either flying under the radar or explaining away irregularities in their pay. It also becomes a vicious cycle in that women are less likely to apply or interview for companies where there’s no pay transparency; 61% of women now use gender pay gap reports to actually inform their decision of whether to move to a new company. It’s not some abstract concept – but something that informs the real-life, real-time decisions of women in the workforce.

How can you address it?

As much as we’d love to be able to give you a quick fix – we can’t. Addressing the gender pay gap at startups is no small feat and isn’t going to happen overnight. Instead, you’ve got to be proactive from the very start, make grassroots change and be consistent in your strategy. As we said, there’s no legal requirement for you to generate a pay gap report if you have under 250 employees, but that doesn’t mean you can’t. Think about creating one anyway: you can show it to investors, board members, C-suite personnel, as well as all prospective hires. This way you can maintain transparency through the interview and onboarding process. Like we said, many women use these reports to make important career decisions, so having this available is bound to attract and retain great talent – especially if you’ve taken the proactive step rather than being legally obliged to. It shows real integrity and a willingness to be hands-on when it comes to the important stuff.

It's also important to revisit your recruitment, interview, and onboarding processes. You might not even know you’re doing it, but there could be unconscious bias or unhealthy practices happening. It’s not good enough to just be ignorant – you’ve got to be proactive, and root them out from the start. At a startup, you have a really unique opportunity to shape culture and processes from scratch; at bigger companies you’ll find it harder to make real change when certain things have been set in stone for years and are bogged down in internal politics. There are so many resources and networks out there focussing on addressing gender inequality and the pay gap in tech startups: here are just a few to look at…

• Fem Tech Lab – a global ecosystem of startups and experts invested in women’s health tech.
• We are Tech Women – helping women in tech advance their careers through events, conferences and awards.
• Ada’s List – a peer support platform for women and non-binary people in tech to collaborate and support each other (have a look at our blog post on Ada Lovelace to find out the namesake of this one!)
• Gapsquare – a bank of resources designed to help employers address gender bias in their companies. And one of our favourite STEM companies too!

Most importantly just get out there and chat to women in tech – trust us, they have so much value and insight to share!

If you want to chat about addressing bias or inequality in your startup or scaleup, connect with our co-founder and CEO Alan Furley on LinkedIn.