When Startups Hire Quickly, It’s Women Who Pay the Price
In times of rapid growth, managers fall back on familiar stereotypes in hiring.
“Move fast and break things,” a phrase coined by Mark Zuckerberg, has long been a battle cry for the testosterone-fueled world of tech startups. Now, research suggests that one of the things that breaks—or at least weakens—when startups move too fast, is a commitment to gender diversity.
The study, which analyzed more than 31,000 startups launched in Sweden between 2004 and 2018, found that when new companies grow quickly, founders frequently experience pressure to also hire quickly. As a result, they tend to rely on mental shortcuts—or heuristics—falling back on stereotypes and biases that can undermine diversity and create more homogeneous workforces.
“During those moments of rapid growth, even well‑intentioned leaders can fall back on familiar stereotypes when assessing who they believe is best suited for the role,” said the study's co-author Mohamed Genedy, a postdoctoral fellow at the Stockholm School of Economics.
In startups led by men, in particular, Genedy found that rapid growth (or “scaling” in start-up parlance) reduced the chances of a woman being hired by about 18% and the chances of appointing a woman to the managerial board by 22%.
Genedy noted that these findings were particularly striking considering that Sweden is a fairly gender-equal nation, consistently ranking among the top countries in the world for women’s labor force participation. It also has one of the smallest gender pay gaps and some of the most progressive policies on parental leave.
“When scaling accelerates, cognitive bias kicks in for everyone.”
Interestingly, the study also found that this pattern of hiring more men is not driven by a hiring manager’s gender alone. In fact, startups led by a woman also displayed these stereotype-informed tendencies when scaling—though to a somewhat lesser degree.
“When scaling accelerates, cognitive bias kicks in for everyone,” Genedy concluded. “Female founders are not immune to these patterns.”
The good news is that not all rapidly growing startups are susceptible to this sort of bias. The study found that when the people doing the hiring had training in human resources, they were more likely to bring on women during periods of rapid expansion.
“When founders have experience with structured hiring practices…and HR knowledge…they are less likely to rely on biased instincts and more likely to hire from a broader talent pool,” Genedy said. As a result, the gender gaps shrink, and in some cases even reverse. “This shows that getting the basics of HR right early on really pays off.”
Josie Cox
The Persistent
