With study after study showing that gender-diverse companies are more profitable than male-dominated ones, it’s hard to reconcile that in 2018, women hold just 20 percent of tech industry jobs. And only one in ten Silicon Valley executives is a woman.
Fixing this disparity isn't merely a moral imperative for tech firms. It's a financial one.
As chief revenue officer of 3Pillar Global, a tech company whose executive team is half female, I've seen first-hand how gender diversity boosts revenue. Our revenue grew by double digits last year and we’re on track to see the same growth again this year.
Research confirms that our results aren't an anomaly. The Peterson Institute for International Economics and EY analyzed over 21,000 publicly traded companies from over 90 countries. They found that companies whose C-suites were at least 30 percent female had net profit margins six percentage points higher than firms with no female executives.
Another study, published by the UC Davis Graduate School of Management, looked at the 400 largest publicly traded companies headquartered in California. The 25 firms with the highest percentage of women in the C-suite posted a median return on assets of 4.4 percent, compared to an average of just 1.9 percent.
Gender diversity leads to higher profits because diverse firms are better prepared to sell to a range of clients.
Consider one personal example. Last year, we attended a networking conference and connected with teams from a variety of other industries. Many people were shocked that a company like 3Pillar, which develops customer-facing software solutions, had sent an all-female team to the conference. Many of the women I spoke with were accustomed to dealing solely with men when addressing their technology challenges.
As a result, we left with several new clients with all-female buying teams. We likely wouldn’t have made those sales if it weren't for the gender diversity of our staff.
On top of that, there's evidence that women are simply better at sales. Gong, a sales consultancy, analyzed more than 30,000 business-to-business sales calls and found that women were 11 percent more likely to close deals than men.
Beyond that initial sale, gender diversity pays dividends for client interactions. I can think of one example when we were working with the staff at a prominent national news outlet. By happenstance, the product and engineering team we sent over was entirely female.
While our work had nothing to do with gender -- we were focused on re-thinking and improving their analytics platform -- it worked to our advantage because the client buyer was also female. The client was thrilled both with the team we sent and the product we delivered. And within the tech space, sending over an all-female team is revolutionary. It shouldn’t be, but it is.
Despite all the public attention on diversity within the tech sector, tech companies are actually becoming less diverse. Today, the share of computer scientists who are women is lower than it was in the 1980s. Most people applying for tech jobs are men.
To ensure a diverse staff, companies need to actively recruit qualified women rather than passively accept whatever applicants come their way. Additionally, I ask our recruiters to search for women and men from different racial and ethnic backgrounds, even if they don't have lots of previous experience in the tech industry. We can always help train great talent on the technology.
Further, women leaders beget more women leaders -- and thus more gender-diverse management teams. About 85 percent of jobs are filled via networking, thus when women meet and mentor other female professionals, it will inevitably lead to more hiring and referral opportunities.
Tech firms' lack of diversity isn't just a problem for their public image. It's a problem for their shareholders. By hiring more women, tech companies could make themselves more relatable to customers in every industry -- and boost sales in the process.
Heather Combs is Chief Revenue Officer for 3Pillar Global, an Inc. 5000 developer of client-facing web and mobile applications. She oversees marketing and business development for the nearly 1000-person multinational company, creating the revenue acceleration strategies that drive 3Pillar’s continued double-digit growth.
Enterprising Women is a partner in the new Million Women Mentors (MWM) initiative.
The initiative supports the engagement of one million science, technology, engineering, and math (STEM) mentors — women and men — to increase the interest and confidence of young women to pursue and succeed in STEM degrees and careers.