Editor’s note: This article has been contributed by guest poster, Ariel Camus.
Europe has a thriving startup scene, with many countries on the continent boasting impressive numbers of successful companies, entrepreneurs, investors, and accelerators. Yet one issue that persists is a lack of diversity in the workforce – nearly 85% of European startup teams are predominantly white and male.
Further, 87% of VC funding in Europe is raised by all-male founding teams, while the proportion of funding raised by all-female teams fell from 3% in 2018 to 1% in 2022. The same report found that just 1% of the capital was raised by funds with all-female general partners (GPs) compared to 84% raised by funds with all-male GP teams.
On top of that, none of Europe’s unicorns have an all-female founding team. Just 1.4% of European unicorns have a founding team entirely made up of minority entrepreneurs, and those founders have raised a paltry 0.7% of total unicorn funding. This lack of diversity can be a significant obstacle to growth and success.
Innovation through diversity
A diverse workforce brings a wealth of different perspectives, ideas, and experiences, which can help a startup innovate and create better solutions.
This isn’t solely diversity in terms of race or gender — it goes far beyond that. Diversity comes in many forms, such as age, culture, ethnicity, sexual orientation, and educational background. When all of these factors are considered, the team becomes a melting pot of different experiences and knowledge, leading to a more rich and fulfilling work experience for everyone.
Business benefits of diverse teams
By bringing together people from different backgrounds, cultures, and experiences, startups can create a dynamic environment that encourages creativity and problem-solving. Prioritising diversity and inclusion in the workplace have also been shown to facilitate innovation.
A study conducted by McKinsey & Company found that companies with more diverse executive teams were more likely to outperform their peers in terms of profitability. Another study from Harvard Business Review found that diverse teams were better at solving complex problems and more likely to develop new products than those with homogenous leadership.
Diversity can also draw inspiration from seemingly unrelated sources. When faced with complex projects, consider assembling a team with a range of diverse talent to tackle the challenge. You may be surprised by the innovative approaches they bring. By hiring professionals from various backgrounds you can improve overall brand exposure and profits. The benefits are endless.
Attracting top talent
A workplace that values diversity and inclusion is more likely to attract and retain top talent. Diverse workplaces foster a sense of inclusivity, which can create a positive work environment where employees feel valued and respected. When people feel comfortable being themselves at work, they are more likely to be engaged, productive, and motivated.
Some of the most successful and forward-thinking companies today are harnessing the power of diverse talent to drive their growth and expansion. Indeed, a recent D&I survey reveals that almost 80% of full-time employees consider inclusion a crucial factor when evaluating job offers and companies.
According to the most recent Deloitte DEI Report, 40% of employees would even prefer to leave an organisation that does not follow diversity, equity, inclusion, and belonging (DEIB) practices.
Working at a diverse company enables you to learn from, and alongside, a diverse group of colleagues and gain a broader understanding of the world around you.
It can also be a game-changer when it comes to developing new skills and advancing your career. Whether it’s learning a new programming language, discovering a new approach to problem-solving, or gaining a better understanding of cultural nuances, connecting with diverse individuals can help you identify blind spots, challenge your assumptions, and develop a more well-rounded perspective.
DEIB Benefits of remote work
As companies continue to grapple with the issue of diversity, equity, inclusion, and belonging, they can turn to remote work as a powerful ally. By eliminating geographical barriers and promoting a more flexible work environment, companies can create a more inclusive workplace that is accessible to a wider range of individuals.
A distributed team model is a useful way to promote diversity within the tech industry. Through this, you can reach talented individuals around the globe and enable them to expand their careers in tech.
This approach has proven particularly successful in helping individuals from underrepresented backgrounds break into the industry, including women, people of colour, and individuals from low-income communities.
By embracing remote work as a means of promoting diversity, you can also help create a more inclusive tech community. Distributed teams also enable people to build relationships with peers and mentors from all over the world, breaking down cultural barriers and promoting cross-cultural understanding.
As we’ve seen above, companies that actively promote diversity, equity, inclusion, and belonging have stronger business results and are better positioned to attract and retain top talent — their pool widening as they also embrace remote work. These companies are not only leaning into DEIB best practices but also positioning themselves for success in the global market.
Companies that actively promote diversity, equity, inclusion, and belonging are not only doing the right thing but also positioning themselves for success in the global market.