The Real Cost of The Underrepresentation of Women in the Tech Industry

In 2020, it remains true that women are vastly underrepresented in the workforce across all industries. According to the Mc Kinsey "Women in the Workplace" 2020 study, men hold 62% of senior level positions in the UK, whereas, women represent just 38% of these roles! In addition to this, for every 100 men that obtained a promotion to management-level positions in 2020, only 85 women received such promotions (Mc Kinsey and Company, 2020). An alarming finding from the "Women Count 2020" study conducted by The Pipeline shows that across the FTSE 300, just 5% of firms have women in. CEO positions and less than 2 in 10 have appointed women as CFO. In fact, the 2020 study conducted by The Pipeline notes that more FTSE 100 CEOs were named "Peter" than women that actually held these senior-level positions! What is even MORE shocking is that until recently, there simply wasn't enough data to study the level of gender disparity within senior management positions due to this underrepresentation itself. As a result, the extent to which diversity within senior leadership roles positively impacts a company's financial performance is poorly documented in the literature. 

Women are specifically underrepresented in the tech industry (Triana et al., 2013), which is a very significant issue as the technology industry, comprising companies such as Facebook and Amazon, is one of the most attractive destinations for investors. The gender gap in the tech sector is sustained not only by the unconscious bias that it is a male dominated industry, but as a result of a lack of equal opportunity and the obvious gender pay gap. The fact that only 19% of roles within the tech industry are filled by women (Women In Tech, 2019) has a cost, not just for individual companies within the tech industry, but for the wider industry itself (Fig. 1). 

Why does the lack of gender diversity in the tech industry matter? 

For a starter, A Bloomsberg report (Basack, Green 2019) states that senior-level female employees brought in $1.9 trillion more than their male counterparts. In addition to this, firms with greater numbers of senior-level women also brought in a 6% increase in profits as well as an 8% increase in stock return (Basack, Green 2019). A lack of gender diversity within the tech industry therefore creates losses, not least in terms of profitability, but also in terms of a loss of innovation, creativity and ideas which are the ingredients for a successful business in an ever-changing technological landscape. Fresh ideas provided by women offer a competitive advantage to a company as a greater diversity facilitates more diverse viewpoints which has the potential to enhance team performance (Lozano, Esrich 2017). A further key benefit of a more gender diverse workforce is that it has the potential to attract a more diverse customer base, including more female customers or clients who are more likely to invest in a good or service that is relatable. 

So, what can be done about this? Is it destined to be all doom and gloom for women in the tech industry? 

Several high-profile tech industries in the UK are actively trying to tackle the issue, namely through the introduction of a diversity quota. Accenture, for example, has set a goal to achieve a 50/50 workforce in terms of gender by 2025. A plan many would call ambitious, however, if the financial consequences such as those mentioned above are recognised and given urgent attention, perhaps more companies will be motivated to improve and maintain gender diversity within the workplace. Perhaps stark statistics such as the fact that UK shareholders missed out on a surplus of £47 billion in pre-tax profit (compared to companies with more than a third of female executive membership) will encourage more firms to act on this issue, particularly in the wake of the economic damage as a result of COVID 19. 

Bringing women into the tech industry in the first instance is vital in order to create gender balance in the technology sector and reap the associated financial benefits. A 2020 PWC report reveals that when asked if they would consider a career in the technology industry, just 27% of women said yes in contrast to 61% of men. In fact, when asked to name a famous woman working in the tech sector, 78% of students were unable to do so. Actively encouraging girls to pursue STEM subjects is a small steppingstone to shifting the balance more in favour of women in the workplace. 

Figures 

https://cdn.statcdn.com/Infographic/images/normal/4467.jpeg

Link to Figure 1 

References 

del Carmen Triana, M., Richard, O.C. and Su, W., 2019. Gender diversity in senior management, strategic change, and firm performance: Examining the mediating nature of strategic change in high tech firms. Research Policy, 48(7), pp.1681-1693.

Lozano, J.F. and Escrich, T., 2017. Cultural diversity in business: A critical reflection on the ideology of tolerance. Journal of Business Ethics, 142(4), pp.679-696.

Mc Kinsey and Company, 2020. Women in the Workplace 2020.  [Online]. Available at: https://wiw-report.s3.amazonaws.com/Women_in_the_Workplace_2020.pdf [Accessed 16 October 2020].

The Pipeline, 2020. Women Count 2020. [ebook]. Available at: <https://www.execpipeline.com/wp-content/uploads/2020/07/The-Pipeline-Women-Count-2020-FINAL-VERSION.pdf> [Accessed 17 October 2020].

PwC, 2020. Women In Tech: Time To Close The Gender Gap. [online] Available at: <https://www.pwc.co.uk/who-we-are/women-in-technology/time-to-close-the-gender-gap.html> [Accessed 17 October 2020].

Richter, F., 2020. Infographic: GAFAM: Women Still Underrepresented In Tech. [online] Statista Infographics. Available at: <https://www.statista.com/chart/4467/female-employees-at-tech-companies/> [Accessed 19 October 2020].

Women in Technology, 2020. Women In Technology Survey 2019 - Women In Technology. [online] Available at: <https://www.womenintech.co.uk/women-technology-survey-2019> [Accessed 17 October 2020].