UK Startups Lack Gender Diversity In Top Technical Jobs

Tuesday, June 29, 2021

Women account for about 2-3% of engineering and technology directors in startups and scaleups.

In a recent report published by Computer Weekly’s Angelica Mari, she states that the proportion of women occupying technology-focused senior roles in UK startups and scaleups is still tiny, despite the hiring growth seen recently, according to a report on recruitment trends over the past two years.

The study was produced by technology recruitment firm Spinks, in partnership with data company Beauhurst. They analysed 12,975 tech companies in the UK between March 2019 and March 2021.

Looking specifically at female representation in senior executive roles, the study found that 57% of startups and scaleups (fast-growing startups that have achieved 10% or more increase in headcount or turnover over three consecutive years) had no leadership roles occupied by women.

Only 15% of tech startups had more than half of the top roles held by women, while 5% had female-only leadership.

Additionally, the research found that female leaders were better represented in some departments than others. While women were found to make up more than 50% of marketing directors and chief people officers, they accounted for just 2-3% of engineering and technology directors, the study noted.

Gender equality is a central concern for many businesses. Pre-pandemic, we saw that it was beginning to move in a more positive direction within the startup and scaleup communities,” said Robin Beattie, managing director at Spinks, adding that the study demonstrated the high-growth technology sector still has very few women in some leadership roles compared with men.

There is, therefore, a lot of work to be done in championing women in these [technology] roles through promotion and/or attracting them from roles in academia, industry or government,” he noted.

There has been “huge demand” for leadership roles in startups over the past couple of years, the study found. Non-technology-focused roles made up the top three most in-demand roles, while the largest hiring drive was for leaders in growth, customer success and finance.

Heads of engineering and product were most in demand after these areas, but female representation failed to meet expectations, according to Henry Whorwood, head of research and consultancy at Beauhurst. “The representation of women in the C-suite remains disappointing in both [startups and scaleups],” he noted.

Large Increase in Staff

Overall, headcount at startups and scaleups has increased since 2019 in these companies by 28% and 11%, respectively.

While tech startups that had not raised equity grew by 16% between 2019 and 2021, companies that had received equity grew by 35%, according to the study. Those that had raised more equity tended to grow more – startups that had raised between £100,000 and £500,000 in funding grew by 23%, while those that had raised between £5m and £10m achieved 56% growth on average.

The fastest-growing technology segments in terms of hiring were found to be challenger banks, quantum computing and open source, followed by startups focused on technology for the legal sector (lawtechs), insurance (insurtech), real estate (prop tech), regenerative medicine, on-demand services, virtual reality and financial services (fintech). From a geographic standpoint, most of the headcount growth was seen in London, followed by Scotland, the east of England, the South East and the North East.

Despite the overall growth figures, the report also noted that the recruitment market for young technology companies had experienced months of stagnation, seen in 39% of the companies analysed, while some had even contracted in size (17%) in 2020 as the pandemic hit.

Companies struggled to move to fully remote interviewing, the report noted. Additionally, they have encountered difficulties in finding ways to onboard new employees while being mostly remote, according to Spinks’ Beattie.

However, as organisations quickly overcame these challenges, we saw a surge in hiring as businesses accelerated their digital transformation and innovation programmes,” he noted, adding that this continued into the first quarter of 2021, with record investment seen in both the tech startup and scaleup sectors.

Talent is “a central parameter to any company’s growth” and ambitious technology firms are no different, according to Beauhurst’s Whorwood. Attracting and retaining skilled professionals will be crucial as the country moves to overcome the impact of the Covid-19 pandemic and adjust to a post-Brexit market.

Eyes will be on the UK’s startups and scaleups like never before, hoping their growth will drive economic recovery in 2021 and beyond. And hiring talent is key to that growth,” the analyst noted.