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Women in tech - plugging the leaky pipeline

Women are still underrepresented in technology roles, a problem with far-reaching implications for the design and development of new products and services that will shape society. How can investors help to address this problem and ensure a more equitable future?

In some circles, 19th century mathematician Ada Lovelace is regarded as the first computer programmer, and software programming in the early years of electronic computing after the Second World War was largely considered “women’s work”. But as computers became more powerful and fundamental to the economy, and the influence of programmers much clearer, the field became increasingly male-dominated.  

In multiple sectors there is a positive correlation between higher levels of employee diversity and stronger financial performance, and the technology industry is no different. It is estimated that reaching gender parity in the US tech sector could add up to US$390bn in enterprise value.

This is partly because improving diversity of thought and approach in the tech sector would lead to increased creativity and innovation, and better problem-solving and decision-making – with more profitable outcomes. Roughly half the world’s consumers of technology are women, yet they are currently underserved, while companies that recruit only male developers risk designing products that fail to maximise their potential.

At the same time, many technology companies struggle to recruit suitable staff due to stiff competition for qualified software engineers in key hubs. Broadening the talent pool by investing in and attracting underutilised talent would go some way towards alleviating an increasingly tight labour market, especially as demand for IT and programming skills will grow by as much as 90% over the next 15 years.

There is evidence to suggest that the gender divide widens as technologies become more sophisticated and expensive, with more transformational uses and impacts. One particular concern is around the use of artificial intelligence (AI) and other emerging technologies. There is evidence to suggest that the underrepresentation of women in the technical and developer workforce reinforces gender inequality, as biases are unintentionally built into AI algorithms. For example, Amazon reportedly had to stop using an AI recruiting tool that filtered resumes as it had taught itself that male candidates were preferable, and penalised resumes that included the word “women’s”.

Dispiritingly, the situation has worsened over the last few decades, even as computers have become ubiquitous. In 2013 just 26% of the computing workforce in the US was female, compared with 35% in 1990. And the situation is worse for women of colour, with black women comprising only 3% and Latina women only 1% of computing roles. The number of black, Latina and Native American women who receive computing degrees has dropped by 40% over the last decade to 4%.

The talent pipeline

In the US, women who do enter the digital sector tend to leave it at twice the rate of men, on average. Women are also are more likely than men to cite gender bias, discrimination and harassment as their reasons for leaving the field. We have seen tech employees become increasingly vocal on these issues. For example, some Google employees staged walkouts across the globe in 2018 to demand an end to inequality of pay and opportunity, while asking for greater transparency about sexual harassment.

The higher up the company hierarchy you go, the fewer women there are, with women accounting for only 6% of CEOs of the top 100 tech companies: this is known as the leaky pipeline. It is also worth noting that there are no black or Latina women CEOs of Fortune 500 tech companies.

Many companies with which we engage will cite this talent pipeline problem as a reason for the low levels of gender diversity in technical roles, but it does not give the full story, and companies should not continue to ignore the problem by viewing it as systemic and insoluble. Instead we believe that companies should acknowledge the issue and commit to playing a meaningful role in addressing it.

One of the key barriers to boosting the female talent pipeline for science, technology, engineering and mathematics (STEM) careers is the lack of diverse leadership and decision-makers who have enough leverage within a company to drive progress. So engaging on increasing senior management diversity in tech is a priority.

It is important to shift the dialogue at companies to ensure they are building a clear strategy for developing talent. That means expanding the initial pipeline of talent by supporting STEM education whilst focusing on diversity and inclusion at every level throughout the organisation. Companies should identify and seek to resolve barriers to inclusion, supporting women in their careers through mentoring, and addressing overt and covert discrimination and harassment to avoid losing talent. This will help companies plug the “leaky pipeline” and build equal representation.

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EOS Client Service and Business Development

Amy D’Eugenio,
Head of Client Service and Business Development, Hermes EOS