The need for true equity in equity compensation

I began my career at Oracle in the mid-1980s and have since been around the proverbial block, particularly in Silicon Valley working for and with companies ranging from the Fortune 50 to global consulting companies to leading a number of startups, including the SaaS company I presently lead. Throughout my career, I’ve carved out a niche not only working with technology companies, but focused on designing and implementing global compensation programs.

In short, if there’s two things I know like the back of my hand, it’s tech and how people are paid.

The compensation evolution I’ve witnessed over these past 35+ years has been dramatic. Among other things, there has been a fundamentally seismic shift in how women are perceived and paid, principally for the better. Some of it, in truth, has been window dressing. It’s good PR to say you’re a company with a strong culture focused on diversity, as it helps attract top talent. But the rubber meets the road once hires get past the recruiter. When companies don’t do what they say, we see mass exoduses and even lawsuits, as has recently been the case at Pinterest and Carta.

So with the likes of Intel, Salesforce and Apple publicly committed to gender pay equity, there’s nothing left to see here, right? Actually, we’re not even close. Yes, the glass ceiling is cracking. But significant, largely unaddressed gaps remain relative to the broader scope of long-tail compensation for women, especially at startups, where essential measures of economic reward such as stock options in companies are often not even part of the conversation around pay parity.

As a baseline, while progress is evident, gender pay is an unfinished product to say the least. Recently the U.S. Bureau of Labor Statistics found white women earn 83.3% as much as their white male counterparts, while African-American women earn 93.7% compared to men of their same race. Asian women made 77.1% and Hispanic women earned 85.1% as much respectively.

According to Payscale, the ratio of the median earnings of women to men has decreased by just $0.07 since 2015, and in 2020, women make $0.81 for every dollar a man makes. Long term, in calculating presumptive raises given over a 40-year career, women could lose as much as $900,000 over the duration of a career.

But that’s just the tip of the iceberg. Even if we solely left the gender pay gap to just a cash salary disparity, there is something further to see here. However, to quote a famous pitchman, “But wait, there’s more!” And the more — at least in my mind — is far more troubling.

As innovative startups from Silicon Valley to New York’s Silicon Alley and beyond continue to reshape the business landscape, guess how most of them are able to lure bright, entrepreneurial minds? It’s certainly not salary, as when a company has nothing beyond a great idea and maybe a lead to a VC on Sand Hill Road, there’s no fat paycheck or benefits package to offer. Instead, they dangle the proverbial carrot of stock/equity compensation.

“Look, we know you can get $180,000 a year from Apple but we’ll give you $48,000 a year plus 1,000 shares presently valuated at $62 per share. Our board — which is packed with studs from the Bay Area — is expecting that to soar within two years! Wait ‘til we go public!”

This is the pitch, at least if you’re a promising male. But women, historically, have tended to get left out of this lucrative reward package for varying reasons.

How has this happened? Beyond just a furtherance of business culture, while there have been legislative steps taken to address inequities in public company compensation and stock dispersal, there are no regulations as to how private companies distribute or manage the appreciation of stock. And, as we all know, the appreciation can be potentially massive.

It makes sense. Many companies and even naïve job-seekers consider equity as the “third pillar” of compensation beyond titles/compensation (which come hand-in-hand) and benefits. Shares of startups are just not top-of-mind — often ignored or misunderstood — by many who look at gender pay inequities, although that could not be more misguided.

A recent study published in the “Journal of Applied Psychology” found a gender gap for equity-based awards ranging from 15%-30% — even beyond accounting for typical reasons women historically earn less than men, including differences in occupation and length of service at a company. Keep in mind many of these companies will go on to massive valuations, and for some, lucrative IPOs or acquisitions.

It’s a problem I recognized long ago, and it is largely why I agreed to lead our Bay Area startup on behalf of our New York-based parent company AST. I found a commitment to a genuinely equitable culture instilled by a shared moral compass, a belief that companies who care about gender equity perform better and provide better returns, and a conviction that diversity brings unique perspectives, drives talent retention, builds a stronger culture and aids client satisfaction.

In speaking with industry colleagues, I know it’s something CEOs, both men and women, are dedicated to addressing. I believe creating a broader picture of compensation is essential for startups, global conglomerates and every company in between. If you are in a position of leadership and recognize this is a challenge in need of addressing at your company, here are some steps I recommend you implement:

  1. Look at the data: Do the analysis. See if this is truly an issue at your company, and if it is, commit to creating a level playing field. There are plenty of experienced consultants who can help you work through remediation strategies.
  2. Remove subjectivity: Hire an independent arbiter to analyze your data, as it removes the politics and emotion, as well as bias from the work product.
  3. Create compensation bands: Much like the government’s GS system, create a salary grade system that contains bands of compensation for specific roles. Prior to hiring a person, decide which band the job responsibilities should be assigned.
  4. Empower a champion: Identify and empower an internal champion to truly own parity — someone whose performance is judged based upon creating equity company-wide. Instead of assigning it to your human resources chief, create a chief diversity officer role to own it. After all, this is bigger than just pay or medical benefits. This is the culture and thus foundation of your company.
  5. Get your board on board: Educate your board as to why this matters. If your board doesn’t value this, it ultimately won’t matter. Companies have audit committee chairs or nominations chairs. Identify a “culture chair.”

One of the first reports we created is a Pay Comparison Report so there are tools anyone in management can easily use to review stock grants made to all employees and ensure equity between people of different ethnicities or gender. It’s not that hard if you care to look.

When I was graduating from college and Ronald Reagan was in office, we were talking about the potential for women to break the glass ceiling. Now, many years later, somehow we’ve managed to develop lights you can turn on and off by clapping and most of us are walking around with the power of a supercomputer in our hands. Is it really asking too much that we require gender pay equity, including all three compensation pillars (cash, benefits and stock), to be a priority?

 

#column, #compensation, #diversity, #gender, #human-resource-management, #labor, #opinion, #oracle, #policy, #recruitment, #sexism, #startups, #tc, #venture-capital

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#Gastbeitrag – Ab in den Funnel – 5 Bereiche, die Startups automatisieren sollten


Startups sind chaotisch? Unsinn. Gerade junge Unternehmen haben die Chance, die Abläufe strukturiert zu gestalten. Schließlich müssen sie nicht Jahrzehnte lang eingespielte analoge Prozesse über den Haufen werfen, sondern können von Anfang an auf automatische Workflows setzen. Der große Vorteil: Anstelle der Mitarbeiter erstellt die Software größtenteils automatisch Reminder und Termine sowie für einzelne Aufgaben und Folgeaufgaben bis ein finales Ergebnis vorliegt. Dadurch gerät kein Follow-Up in Vergessenheit, kein Termin wird übersehen. Einfache Dinge – wie etwas das manuelle Übertragen von Rechnungsbeträgen – übernimmt die Software gleich komplett. Dadurch vergeuden Team-Manager wie auch einzelne Mitarbeiter ihre Zeit nicht länger mehr mit administrativen Angelegenheiten. Im Vertrieb und Marketing haben sich solche Funnels und Workflows bereits bewährt – nun erleben wir ähnlich innovative Arbeitsweisen abteilungsübergreifend in anderen Bereichen. Fünf Beispiele für (teils) automatische Funnels und Workflows im Arbeitsalltag:

Onboarding
Hat ein neuer Kollege tatsächlich alle erforderlichen Stationen durchlaufen, um zu wissen, wie das Unternehmen funktioniert? Tools wie Personio automatisieren den Onboarding-Prozess weitestgehend. Jedes Meeting, jeder Workshop wird terminiert, die dafür erforderlichen Kolleginnen und Kollegen eingeladen. Bevor der neue Kollege nicht die erforderlichen Skills erworben hat, bleiben die dafür notwendigen Termine in der Pipeline. Es folgt Reminder nach Reminder und Termin nach Termin. Bei Finiata haben wir dafür ein “Buddy-Programm” initiiert. Ein erfahrener Mitarbeiter steht dem Neuankömmling zur Seite. Personio erstellt für beide weitestgehend automatisch Termine und Reminder für die erforderlichen Onboarding-Sessions, die einmalig im Vorfeld festgelegt wurden – aber selbstverständlich je nach Abteilung und Level variieren.

Recruitment
Wer kennt es nicht? Eine Bewerbung trudelt als PDF ein, das Feedback aus der Fachabteilung zieht sich hin, irgendwann versandet die Mail und wenn sie wieder auftaucht, ist der Kandidat längst anderweitig untergekommen. Im Recruitment sorgen Workflows dafür, dass alle im Einstellungsprozess involvierten Mitarbeiter zentral in der Cloud gemeinsam bearbeiten. Ist noch eine Einschätzung jenseits von HR von einer Fachabteilung erforderlich, erfolgt dies unmittelbar in der Cloud. Ist eine Bewerbung spannend, wandert der Kandidat in die nächste Stage – beispielsweise zur Einladung zum Bewerbergespräch. Daran an knüpft wiederum die Evaluierung. Reminder für die Bearbeitung der Kandidaten erfolgen automatisch. Abhängig vom Level und dem Fachgebiet der Bewerber variieren die “Funnels”, sind mal kürzer, mal länger – aber die Logik bleibt immer die gleiche: Erst wenn ein finales Ergebnis vorliegt – also die Zu- oder Absage – geben die Tools Ruhe.

Buchhaltung
Tools wie Spendesk oder Pleo automatisieren das Verwalten von Unternehmensausgaben. Statt dass Mitarbeiter Papier-Belege oder Rechnungen als PDF horten und sie dann am Monatsende der Buchhaltung übergeben, erfolgt die gesamte Administration unmittelbar nach der Bezahlung. Einzelne Mitarbeiter erhalten virtuelle oder physische Kreditkarten des Unternehmens. Geschäftsessen oder auch Marketing-Budgets bezahlen sie dann eigenständig – ab bestimmten Beträgen wird selbstredend die Freigabe durch dafür verantwortliche Personen vorausgesetzt. In diesem “Administrations-Funnel” erfolgt fast alles automatisch ab dem Scan der Rechnung mit dem eigenen Smartphone: Die Beträge und entrichtete Umsatzsteuer wird ausgelesen und direkt an die Buchhaltungssoftware übermittelt, die Rechnung entsprechend gesetzlicher Vorgaben archiviert. Alle Ausgaben lassen sich etwa nach Person oder Typ kategorisiert und visualisieren. Schwankungen oder auch Einsparpotenziale fallen dadurch auf einen Blick auf.

Marketing
Im Marketing automatisiert zeitgemäße Cloud-Software die Prozesse weitestgehend. Beispielsweise clustert Hubspot Personen nach ihren Öffnungs- und Klickquoten, um dann Newsletter zu individualisieren. Besonders spannend sind zudem Cloud basierte Verzahnungen von Vertrieb und Marketing. Unter anderem können dann die Vertriebskollegen übernehmen, wenn ein potenzieller Neukunde zwar noch seine Telefonnummer eingegeben, aber eine Anmeldung nicht final abgeschlossen hat – die DSGVO-konforme Einwilligung natürlich vorausgesetzt. Solche Tasks erstellt die Software komplett automatisch in den Workflows der Vertriebskollegen. Idealerweise verteilt sie hochwertige Leads aus dem Marketing dabei gleichermaßen im Vertriebsteam – damit alle Kollegen gleiche Voraussetzung auf Abschlüsse und Kommission haben.

Vertrieb
Vertriebssoftware – Vorbild aller Funnels – bringt jeden neuen Kontakt in Workflows. Kein Lead gerät in Vergessenheit, kein Termin landet nicht im Kalender. Jede einzelne Kontaktaufnahme hält die Cloud-Software fest und erstellt direkt Folgeaufgaben. Bis zum finalen Abschluss oder auch nicht. Und nach erfolgreichem Abschluss, beginnt der Zyklus mit möglichen Upselling-Optionen idealerweise gleich von vorne.

Ein solches Arbeiten im Autopilot erleichtert den Arbeitsalltag ungemein durch weniger Administration, weniger Vergesslichkeit und einem immensen Plus an Zuverlässigkeit. 

Über den Autor
Jan Enno Einfeld ist Geschäftsführer von
Finiata, einem Fintech mit Fokus auf kurzfristiges Liquiditätsmanagement für Kleinunternehmen, Selbstständige und Freiberufler. Finiata nimmt neben dem Kernmarkt Polen Märkte wie Italien, Spanien oder die Türkei für die kommenden Jahre ins Visier. Die Bonitätsprüfung erfolgt komplett digitalisiert und automatisiert. Der Algorithmus “Copernicus” hat sich durch Machine Learning kontinuierlich weiter entwickelt und prüft binnen weniger Minuten die Kreditwürdigkeit der online-Antragssteller – bei einer Ausfallquote von zwei Prozent und einem Gini-Koeffizienten, der 30 Punkte besser ist als der von vergleichbaren Auskunfteien. 

Startup-Jobs: Auf der Suche nach einer neuen Herausforderung? In der unserer Jobbörse findet Ihr Stellenanzeigen von Startups und Unternehmen.

Foto (oben): Shutterstock

#aktuell, #buchhaltung, #gastbeitrag, #marketing, #onboarding, #recruitment, #vertrieb

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What’s different about hiring data scientists in 2020?

It’s 2020 and the world has changed remarkably, including in how companies screen data science candidates. While many things have changed, there is one change that stands out above the rest. At The Data Incubator, we run a data science fellowship and are responsible for hundreds of data science hires each year. We have observed these hires go from a rare practice to being standard for over 80% of hiring companies. Many of the holdouts tend to be the largest (and traditionally most cautious) enterprises. At this point, they are at a serious competitive disadvantage in hiring.

Historically, data science hiring practices evolved from software engineering. A hallmark of software engineering interviewing is the dreaded brain teaser, puzzles like “How many golf balls would fit inside a Boeing 747?” or “Implement the quick-sort algorithm on the whiteboard.” Candidates will study for weeks or months for these and the hiring website Glassdoor has an entire section devoted to them. In data science, the traditional coding brain teaser has been supplemented with statistics ones as well — “What is the probability that the sum of two dice rolls is divisible by three?” Over the years, companies are starting to realize that these brain teasers are not terribly effective and have started cutting down their usage.

In their place, firms are focusing on project-based data assessments. These ask data science candidates to analyze real-world data provided by the company. Rather than having a single correct answer, project-based assessments are often more open-ended, encouraging exploration. Interviewees typically submit code and a write-up of their results. These have a number of advantages, both in terms of form and substance.

First, the environment for data assessments is far more realistic. Brain teasers unnecessarily put candidates on the spot or compel them to awkwardly code on a whiteboard. Because answers to brain teasers are readily Google-able, internet resources are off-limits. On the job, it is unlikely that you’ll be asked to code on a whiteboard or perform mental math with someone peering over your shoulder. It is incomprehensible that you’ll be denied internet access during work hours. Data assessments also allow the applicants to complete the assessment at a more realistic pace, using their favorite IDE or coding environment.

“Take-home challenges give you a chance to simulate how the candidate will perform on the job more realistically than with puzzle interview questions,” said Sean Gerrish, an engineering manager and author of “How Smart Machines Think.”

Second, the substance of data assessments is also more realistic. By design, brainteasers are tricky or test knowledge of well-known algorithms. In real life, one would never write these algorithms by hand (you would use one of the dozens of solutions freely available on the internet) and the problems encountered on the job are rarely tricky in the same way. By giving candidates real data they might work with and structuring the deliverable in line with how results are actually shared at the company, data projects are more closely aligned with actual job skills.

Jesse Anderson, an industry veteran and author of “Data Teams,” is a big fan of data assessments: “It’s a mutually beneficial setup. Interviewees are given a fighting chance that mimics the real-world. Managers get closer to an on-the-job look at a candidate’s work and abilities.” Project-based assessments have the added benefit of assessing written communication strength, an increasingly important skill in the work-from-home world of COVID-19.

Finally, written technical project work can help avoid bias by de-emphasizing traditional but prejudicially fraught aspects of the hiring process. Resumes with Hispanic and African American names receive fewer callbacks than the same resume with white names. In response, minority candidates deliberately “whiten” their resumes to compensate. In-person interviews often rely on similarly problematic gut feel. By emphasizing an assessment closely tied to job performance, interviewers can focus their energies on actual qualifications, rather than relying on potentially biased “instincts.” Companies looking to embrace #BLM and #MeToo beyond hashtagging may consider how tweaking their hiring processes can lead to greater equality.

The exact form of data assessments vary. At The Data Incubator, we found that over 60% of firms provide take-home data assessments. These best simulate the actual work environment, allowing the candidate to work from home (typically) over the course of a few days. Another roughly 20% require interview data projects, where candidates analyze data as a part of the interview process. While candidates face more time pressure from these, they also do not feel the pressure to ceaselessly work on the assessment. “Take-home challenges take a lot of time,” explains Field Cady, an experienced data scientist and author of “The Data Science Handbook.” “This is a big chore for candidates and can be unfair (for example) to people with family commitments who can’t afford to spend many evening hours on the challenge.”

To reduce the number of custom data projects, smart candidates are preemptively building their own portfolio projects to showcase their skills and companies are increasingly accepting these in lieu of custom work.

Companies relying on old-fashioned brainteasers are a vanishing breed. Of the recalcitrant 20% of employers still sticking with brainteasers, most are the larger, more established enterprises that are usually slower to adapt to change. They need to realize that the antiquated hiring process doesn’t just look quaint, it’s actively driving candidates away. At a recent virtual conference, one of my fellow panelists was a data science new hire who explained that he had turned down opportunities based on the firm’s poor screening process.

How strong can the team be if the hiring process is so outmoded? This sentiment is also widely shared by the Ph.D.s completing The Data Incubator’s data science fellowship. Companies that fail to embrace the new reality are losing the battle for top talent.

#column, #coronavirus, #covid-19, #data-science, #developer, #entrepreneurship, #glassdoor, #hiring, #job-interview, #recruitment, #software-engineering, #startups, #talent, #tc

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CakeResume, which wants to become Asia’s largest tech talent pool, raises $900,000 seed round

CakeResume is a startup creating an alternative for the tech industry to job search platforms like LinkedIn. The Taipei-based company, founded in 2016, announced today that it has raised $900,000 in seed funding from Mynavi, one of the largest staffing and public relations companies in Japan. The round will be used to expand CakeResume’s operations in other countries, including Japan and India.

Founder and chief executive officer Trantor Liu, who was a full-stack web developer at Codementor before launching CakeResume, said the startup’s goal is to have the biggest pool of tech talent in Asia. The platform currently has about 100,000 active resumes, 75% of which were created by job seekers in Taiwan. More than 3,000 employers, ranging from startups like Appier to   companies like Amazon Web Services, TSMC, Nvidia and Tesla, use it for recruitment.

The other 25% of resumes come from countries including India, Indonesia and the United States. CakeResume plans to expand in Japan with the help of Mynavi, a strategic investor, and is also seeking partnerships in Southeast and South Asia with recruiters. Liu said CakeResume has a particularly high conversion rate in India, and its goal is to build a pool of at least 100,000 resumes there.

In statement about its decision to invest in CakeResume, a Mynavi represenative said, “The global shortage of IT engineers is becoming more apparent and we are focusing on services related to IT talent in Asia. Among them, CakeResume’s service is excellent in product design, and the service is already used by many talent in the country,” adding that it expects the platform to become “the largest IT talent pool in Asia in the near future.”

In Taiwan, CakeResume’s main rivals are LinkedIn and job search site 104.com.tw. It also competes against other job sites like AngelList, Indeed and Glassdoor.

CakeResume differentiates by giving tech professionals more ways to show off their skills, since many tech companies want more in-depth resumes than the traditional one-pagers used in other fields. The startup was named because its resume builder enables job seekers to add more layers of information, like assembling a cake. For example, CakeResume’s template allows engineers to embed projects from GitHub, while designers can add data visualizations, instead of just including links to them.

“We aren’t just providing a form to fill in that you can then download as a formatted PDF resume. We want to allow you to be more creative,” said Liu. “You can easily embed project images and add descriptions, which makes it easier for HR to understand what you can contribute.”

Another difference between CakeResume and its competitors is that most people who create a profile are actively seeking new positions, instead of professional networking opportunities. Since it is also tailored for the tech industry, recruiters have a higher chance of getting responses from interested candidates, Liu said.

“We recently got a review from one of our clients, and they said when they used our platform to contact talent, they got about a 50% reply rate, but on LinkedIn it might be less than 10%,” he added.

Before the COVID-19 pandemic, many job seekers were willing to relocate, but chief operating officer Wei-Cheng Hsieh said CakeResume is now focusing more on helping people find remote jobs. More tech companies, including Facebook and Google, are extending their work from home policies until at least summer 2021.

Though many job postings still specify a location, Liu said CakeResume’s team anticipates this will change as companies continue adapting to the pandemic. While CakeResume will remain focused on matching applicants to jobs instead of networking, it also also testing some social features to help workers around the world connect with companies and each other.

#asia, #cakeresume, #fundings-exits, #job-platform, #mynavi, #recruitment, #startups, #taiwan, #tc, #tech-recruitment

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Recruiting for diversity in VC

Like many industries with a high concentration of wealth — and the careers that help professionals accumulate it — investment firms have a severe dearth of diversity in their ranks.

Regardless of whether the focus is venture capital, private equity or any other investment asset class, the firms are replete with white men. Though there have been some modest efforts of late to push for diversity, particularly in VC, these have yielded single digit percentage changes at best — and nothing at worst. Only 9% of investment decision makers in VC today are women; just 2% are Black.

Some firms have made reasonable inroads on this problem with good intentions. Based on my search experience recruiting investment professionals, I would guess that at least half of those searches were for clients with a strong preference to hire a “diverse” candidate. The Black Lives Matter movement has recently advanced the dialogue even further and has shined a light on underrepresentation in VC more than ever. “How do we increase our pipeline of diverse candidates?” is a question I heard frequently before 2020, but in past weeks this has become a chorus. Unfortunately, if solving this problem were as easy as telling a recruiter you want more diversity, it might have been solved long ago.

Below are a few common pitfalls we see in our searches with VC firms in particular, as well as some thoughts on how firms can improve their hiring processes, in order to work toward having more diverse representation within their investing teams.

Job description: Great comes in many forms

The most common reason I see for hiring processes leading to a slate with primarily white male candidates is because the criteria my client views as required almost completely precludes the possibility that the candidate slate will be diverse.

Taken as a given that women and minority men are not well-represented at senior levels in VC, any job spec that asks for a candidate to have seven to 10 years of experience in the industry, or a large number of board seats or investments led, will mean that the pool of “qualified” candidates will consist of mostly white men. This has historically been referred to as the “pipeline problem” and it’s an increasingly well-studied concept that academic literature is beginning to point to as a bias that pushes the onus of hiring minorities away from the hiring manager and on to the candidate pool. Even for firms that remain committed to hiring underrepresented groups without making adjustments to their criteria, the result is a zero-sum game where proven minority investors rotate from firm to firm, and an outcome that does not increase diversity in the industry as a whole.

VC firms seeking to improve their diversity have to recognize that great comes in many forms. By crafting broader specs and really thinking about the qualifications for their investing roles, a whole new talent pool opens up. To see that new pool of talent though, firms must first determine what characteristics are relevant to the role, and avoid tenure (or other tenure stand-ins) as the main criteria. VC investing is as much an art as a science; firms should decide what personal traits make somebody strong in their organization and why. How would a different viewpoint be additive to sourcing or diligence discussions?

Firms then need to commit to interviewing for those traits and perspectives, and assessing candidates along those same lines. One VC firm I worked with interviewed dozens of candidates before they realized that their process focused too much on financial acumen and not enough on the other factors they felt would make somebody a strong venture capitalist, resulting in a final slate of safe, “qualified,” and mostly nonminority candidates.

We reworked our process, and theirs, to interview for different criteria moving forward. We asked about overcoming hardships and about risks taken, and we got a sense for what type of impact that person made in whatever organization they came from rather than just asking about deals and transactions. It should be no surprise that the candidates with noninvesting backgrounds are performing much better in the process now, and the value they’d add to the organization more clear, even though the interviewers and the roles are the same.

Affinity bias: Go beyond what’s familiar

A broad spec and a team committed to hiring diverse talent, and interviewing appropriately, are great starting points. But then there is much more to do. Affinity bias is a well-known phenomenon that many investors are likely aware of, but it is pernicious in hiring settings and can be a serious challenge to overcome. Affinity bias in hiring is when a person or group of people prefer a candidate who looks, talks, acts or has a similar background to them.

In the case of hiring candidates with diverse backgrounds, affinity bias may be the tallest hurdle. In VC, the job is in many ways to seek common ground with the people you talk to. Good VCs are relationship builders — with entrepreneurs, other VCs and strong executives they want to recruit into their portfolio companies. But most investors are white people from affluent communities who attended elite universities and have worked at top-tier banks or consulting firms. In some cases there may have been a stint at another top-tier institution, be it a technology company or another investment firm.

White men are more likely to have these backgrounds. In a hiring process, white male VCs will naturally find ways to connect with candidates with similar backgrounds (i.e., other white men), in contrast to candidates with none of those same experiences, even when the candidates with other backgrounds are equally qualified for the role.

Affinity bias can be very subtle. It is human nature to feel the conversation was easier with somebody who in many ways has led the same life you did. It can feel somewhat logical even: The critique of the nonwhite or nonmale candidate is never as obvious as “They didn’t go to Stanford” or “They don’t belong to my country club.” Rather, it is often expressed as something softer and subjective — a seldom-articulated criteria of cultural fit. “Our culture is different from the place they work” is the most common. “I’m not sure they have the drive” is another, or “They don’t have an X-factor.” Now, these critiques can be completely legitimate.

A candidate may indeed be a bad fit for the culture of the firm because, for example, their prior employer was a gigantic corporate machine reliant on extraneous processes and they are interviewing for a role at a small entrepreneurial organization. But sometimes, particularly when interviewing candidates from different backgrounds, culture fit is a mask for affinity bias, and VCs (like all interviewers) need to be conscious of this tendency.

Look in the right networks

Investment firms almost always try to make a hire through their own network before leading a full search, and even before posting a job as being open anywhere online. This has become such an ingrained behavior that it is often discussed as a best practice. Unfortunately, “hiring through our network” almost certainly means the slate of candidates that a firm considers at the outset is going to be heavily nondiverse. Unless a firm (or to broaden this guidance, an organization) is already diverse across multiple vectors, then beginning a search by canvasing the firm’s own network is highly unlikely to yield a “diverse” candidate. This seems innocuous but it can actually be harmful to the odds that the firm ever hires a candidate from an underrepresented group. Why? There is another bias at work, the status quo bias.

Studies have shown that people tend to make choices that favor the status quo. Creating a balanced slate of choices is critical to avoid disfavoring minority candidates inadvertently. One study showed that having multiple women or Black candidates on a finalist slate increased the odds that the selected would be a minority by 70x-100x. But if a group of interviewers meets five white men through their networks before they meet anybody else, it is going to take an disproportionate number of underrepresented minority candidates to overcome the group’s bias toward hiring the “status quo” of the white men they met at the outset of the search.

At True Search, we recently audited one of our own searches to look for candidate-selected markers of their identity. We compared our pool of candidates to the NVCA diversity data from 2018. Compared to the industry averages, our pool of candidates was half as white and twice as female as the industry at large. I am not sharing that data as an advertisement for True Search, and in fact we strive to do more and are working on multiple programs to increase our networks with diverse candidate pools. The point is, when a VC firm uses a search firm or any outside consultant for a search, the pool of candidates is going to be much more diverse than if that VC firm simply calls up the people in their network, who probably are not all that diverse.

Focus on inclusion

A commitment to hiring more talent with underrepresented backgrounds is great; actually doing it is even better. Many studies have shown that diversity improves the performance of a team, but the onus is on the organization to foster an environment where those viewpoints are appreciated. In my discussions with VCs who are minorities, they point out that once they are in the door of the firm they still face challenges that white male colleagues don’t.

They are less likely to have mentors who share their backgrounds, and investing is largely an apprenticeship business. If they did not come from Stanford or Harvard, they are less likely to see deals that come through the sorts of personal networks that the firm is likely accustomed to seeing. If they came from a noninvesting background, they may be taken less seriously when presenting investment ideas to the team of career investors. A firm has to support diversity of thought once it is in the door, or the contributions of those team members may be unappreciated.

Firms can do many things to foster strong talent from diverse backgrounds once they are in the organization. Minority investors have shared some great ideas with me as I was thinking through this article, so these suggestions aren’t just my own. Underrepresented groups have historically (in the short history of such groups having any significant representation in the investing world) formed mentorship networks that transcend the walls of a given firm, such as Latinx VC, BLCK VC and All Raise.

VC firms should build as much connectivity with those sort of networks as possible. This will not only increase the odds that a firm will see more candidates from underrepresented groups, but it will also mean that the firm can play a role in finding strong mentors for their diverse talent throughout their career. Those networks can be built through small individual actions like attending and sponsoring events, or sharing job postings in the firm and portfolio with those networks.

VC firms can also help to jump-start a hire’s network in venture. Imagine a scenario where a firm hires a noninvestor with a unique yet amazing background into an investing role. Their peers all went to Stanford or worked at Facebook and are sourcing their deals through those personal networks. VC firms can use their resources to help close that network gap, such as by setting aside small pools of capital for a seed fund to be deployed by new investors with diverse backgrounds, thereby giving them a boost in early network building. I’ve seen firms deploy this strategy as a way to keep tabs on high potential operators, or on partner-level candidates they want to get to know more before they commit to hiring full-time.

Firms can help train junior talent and better prepare them for future full-time roles in venture by running intern or analyst programs and emphasizing the hiring of underrepresented groups into those roles. Even a part-time gig in VC will give a candidate a leg up in future interview processes, and even if that person goes off to another firm for a full-time role, the network back to that person will remain and could be helpful as a source of (or mentor to) the diverse talent the firm hires in the future.

#column, #diversity, #entrepreneurship, #hiring, #inclusion, #nvca, #opinion, #recruitment, #stanford, #startups, #talent, #tc, #venture-capital

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The Mom Project raises $25M for its job site aimed at women returning to work

Women have long had the short end of the stick when it comes to employment, regularly finding themselves struggling to break through the glass ceiling for promotions and on average getting paid less than their male counterparts. That situation often gets compounded when the woman in question is a parent, balancing the needs of professional and home life and more.

But we’re seeing a gradual shift among companies to “do better” on inclusion, and that’s opening the door to new opportunities. And to underscore that, The Mom Project — a Chicago startup that focuses on connecting women, including parents, with jobs from organizations specifically open to employing people who meet that profile — is announcing a $25 million round of funding to expand its business.

The funding comes on the heels of some significant traction for The Mom Project . Since we first profiled the company in December 2018 (when it had raised a round of $8 million led by Initialized Capital) it has grown to 275,000 users (up from 75,000), and doubled the number of organizations posting jobs on the platform to 2,000, including several major tech companies other brands like Facebook, Nike, Uber, Apple, Google and Twitter. The company has also made an acquisition of a startup called Werk to add analytics tools to for its business customers.

The Series B round of funding brings the total raised by the startup to $36 million, and it is being led by 7CG — a VC that has backed the likes of Jio (the Indian juggernaut raising like crazy right now), Cheddar (the media platform acquired by Altice) and fintech Acorns — with participation also from Citi Ventures, Synchrony Financial, SVB and High Alpha, as well as previous investors Initialized Capital, Grotech Ventures, OCA, Aspect Ventures, Wintrust Financial, Irish Angels and Engage VC.

The Mom Project is built around a two-sided platform and both of those sides will be getting a boost with this funding.

On one side, the startup works with businesses to post job listings that specifically target women and those returning to work who might need more flexible terms in their employment engagements, as well as analyse its overall HR strategies around those efforts.

On the other side, it provides a platform to women who fit that basic profile — the average age of its users is between 28 and 44, its CEO and founder Allison Robinson (pictured above with her child) said — providing them both with job listings and other support.

The plan will be to enhance both aspects of the business: more tools for enterprises to better engage The Mom Project’s community, as well as manage the recruitment and employment of people better; and more tools for Mom users, including building out an interactive community (and forums) to better “address the pain points of family and career,” Robinson said.

While there are a lot of job boards online — indeed recruitment dot-coms were some of the earliest successful business in the earliest days of the World Wide Web, meaning there are giant legacy players out there — The Mom Project is a strong example of how that model has been evolving.

Specifically, we’re seeing a flourishing of startups, and sites, focused on identifying and cultivating job opportunities for specific segments of the market, be it specific types of jobs like engineers, or a specific demographic, or both — in ways that more general job boards like those on LinkedIn or Indeed either don’t highlight as well or simply cannot address.

These are not only connecting with specific talent groups, but speaking to the needs of businesses that are trying to make more of an effort to boost their workforce diversity as part of larger inclusion policies: they are also struggling, in their case to find effective ways to target specific kinds of candidates.

As we noted when we previously profiled The Mom Project, it was started when Robinson herself struggled to return to work — her previous career had he working as an executive at Pampers — after having a child, and it’s a problem that she is not alone in having identified, and the focus on addressing that and executing well on it is one reason The Mom Project has grown.

Needless to say, recent events have had a huge impact on how all those general employment trends, and the recruitment industry, have been going. We’ve seen unprecedented job losses, hiring freezes, a push for remote working all suddenly become the norm. All of that has had a mixed impact on The Mom Project.

In some ways, it plays into what the startup has been building all along: currently some two-thirds of all jobs posted and that people are looking to do are focused on fixed-term projects, rather than permanent positions, and so as companies slow down their normal recruiting, it leaves a space for the kind of work that people who need more flexible schedules may be able to do. That’s at the same time that the companies themselves may be reducing headcount overall for all kinds of work, however.

Another big theme of the last several months has been the big shift to inclusiveness when it comes to racial diversity, and that too has direct relevance in the female workforce, Robinson noted. “Sixty percent of the job losses in the pandemic have been women, and the statistics have been even worse for women of color,” she said. “It’s like a canary in the coalmine.”

While The Mom Project doesn’t have any tools today to surface candidates that meet more diverse profiles, Robinson said that they are considering it and how to approach that in a way that works.

Meanwhile, The Mom Project is also trying to do more to speak to the other side of its marketplace and the struggles they are having. It’s launched a $500,000 fund, distributing grants specifically to small businesses that are its customers (that is, hiring via The Mom Project) the are finding it especially tough right now. (And indeed, many have pointed to the especially hard hit that SMBs are taking at the moment.)

All of this is to say that there remains a huge market opportunity here and there is an argument to be made that companies that good at identifying clever ways of targeting gaps, and executing on that well, are strong candidates for identifying and filling other gaps in the future, one reason why investors are knocking.

“There is a material disconnect between senior female talent and executive roles at major corporations, not for lack of interest, however the difficulty to institutionalize in large enterprise. The Mom Project’s platform enables corporates to source, onboard and manage variable labor at the highest skill level, a function historically which has been offline and manual for FTEs and even more so difficult for flexible employees,” said Jack Leeney, founding partner at 7GC, in an emailed interview. “In our diligence, the value add to senior HR managers of an analytic platform which enables the oversight of a variable work force was the single most important factor to integrating The Mom Project initially and at scale. There is no other growth company, digital first HR company or large scale talent agency that is addressing the female exec population with an enterprise grade digital solution.”

#jobs, #recruitment, #startups, #talent, #tc, #the-mom-project, #women

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Candidate Labs wants to be modern talent agency for techies

In the first few minutes of pitching his new company, Candidate Labs, Jonathan Downey admitted that he’s operating in a market that is “done to death”: recruitment technology. But Downey, whose previous startup Airware shut down after burning $118 million, remains optimistic because of a little company named Zoom.

“There were lots and lots of videoconferencing companies and yet everybody’s experience was really bad,” he said. “It just took [Zoom] coming along and getting just a few more things right that totally transformed” videoconferencing.

Zoom lesson in mind, Candidate Labs launched today as a modern talent agency, after operating in stealth for the past seven months. The company also announced today that it has raised $5 million in seed funding. Investors in the round include SignalFire, Leah Solivan of Fuel Capital, BoxGroup, Lattice CEO Jack Altman and the founders of Opendoor, Eric Wu and Ian Wong.

Candidate Labs connects a data platform with 100 million professionals to its database of 60,000 jobs. Then it creates short lists of talent recommendations that clients can then screen and interview.

Jonathan Downey, CEO and co-founder of Candidate Labs (Image Credits: Candidate Labs)

Its competitive edge is not in its access to data, but rather the technology it lays atop it. Downey said that Candidate Labs uses “human in the loop” machine learning, similar to Stitch Fix, which combines data and human judgement to better recommend style guides.

Candidate Labs leverages a big data set to get a product that is quality, not quantity. Using machine learning, Candidate Labs might extract a 25-person candidate list to help companies fill a singular role. Then a seasoned recruiter will look over the list to see the quality of the candidates, pull in personal judgement and create a final list. Once a client sees the list, Candidate Labs will see who it chooses to interview and then digest that feedback. Over time, humans and machines will get better at recommendations.

In an industry like recruitment, which has a lot of messy and unstructured data, human in the loop machine learning makes sense. There needs to be a two-pronged approach to hiring people, one that speeds up the bits that are purely logistical, but gives room for humans to make a correction if needed.

Candidate Labs’ big sell is that it connects sales and marketing professionals to jobs at a fraction of the time of normal recruitment tools. In over half of cases to date, Candidate Labs has introduced employers to candidates that are eventually hired within seven days. More than 50% of the talent it has placed has been diverse talent, according to Downey.

Leah Solivan, a general partner of Fuel Capital, invested in Candidate Labs in mid-2019 and said Candidate Labs’ launch compass is at a “critical inflection point for talent within the startup ecosystem.”

“During the best of times, candidates tend to rely largely on limited insights and a handful of network referrals to make a critical life decision with long-term consequences,” she said. “Their next role.”

Downey is a customer of his COO and co-founder, Michael Zhang, who founded custom menswear service Trumaker .

“Candidate Labs is a recruiting firm that we wish we had been able to work with in building our own companies,” Downey said.

Along with the financing, Candidate Labs is announcing a job search tool. Sales and marketing professionals, among the most impacted by pandemic-related job losses, can use search filters to look for job openings. In early April, a ton of new tools were launched to help support those without jobs secure their next gig.

 

According to Downey, the tool will help Candidate Labs work directly with people within what is now a saturated job market.

#hiring, #jonathan-downey, #michael-zhang, #recent-funding, #recruitment, #signalfire, #startups, #tc, #trumaker

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Onboarding employees and maintaining culture in a remote work environment 

It all happened so fast.

In a matter of weeks, companies everywhere shut down offices and went fully remote — with employees working from home and connecting over video and email instead of in-person. And those are just the people lucky enough to still have jobs.

To say this has made work more difficult is an understatement. But what about people who are just starting new jobs and those who are responsible for onboarding them? How do you get someone up to speed when you’ve never actually met them? How do you make them feel like part of the team when the team itself is scattered across the country and around the world?

How do you foster and maintain the culture when so many people are never in the same place?

This post aims to share lessons from leaders who run distributed companies — including GitLab, Elastic and others — about how to onboard employees and maintain culture in a remote work environment. Done right, these steps won’t just make things easier during this tough time; they will also help over the long-term as some teams move to more distributed, remote environments.

The lessons themselves fall into three main buckets:

Write it down

Writing things down may sound like more work, but having a record also forces people to think through processes and make sure they are consistent. Winging it isn’t good enough anymore. Neither is accepting different levels of training depending on who your manager is. It’s time to make what was somewhat informal and ad hoc more formal and concrete.

When it comes to onboarding, every company should ask themselves:

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Cathay Innovation’s first investment in Germany is healthcare startup Medwing

Medwing, a German startup with an ambition to tackle Europe’s shortage of healthcare workers, said on Tuesday that it has secured €28 million ($30 million) in a Series B financing round. Global venture capital firm Cathay Innovation led the round, marking its first investment in a German company. Other participating investors include Northzone, Cherry Ventures and Atlantic Labs.

The World Bank forecasted a worldwide shortage of 15 million health professionals by 2030, with demand being highest in affluent regions like Europe with an aging labor force and an aging population in need of care.

The pressing issue inspired Johannes Roggendorf, who previously worked at Rocket Internet and Bain & Company, to launch Medwing in 2017 and later brought on his co-founder Dr. Timo Fischer. The entrepreneurs discovered that, contrary to conventional wisdom, many healthcare workers in Europe wanted to work more, not less. Part of the reason why jobs were not filled was information asymmetry that led to a mismatch between supply and demand.

“There is a group of people who are willing to work more if they can manage their schedule,” Roggendorf told TechCrunch over a phone interview. “There are many qualified workers who left the healthcare system often because of inflexible working hours.”

In a survey that Medwing conducted, 50% of those who left the healthcare system said they would return if they were given more flexible working conditions.

Medwing’s solution is an automatic job matching system connecting workers with hospitals, nursing homes and other medical institutions. Focusing on Europe, the startup has so far registered more than 200,000 workers and 2,500 partner employers — including 80% hospitals in Berlin . Employers pay Medwing a commission every time a candidate is successfully placed. Each month, the platform is adding 15,000 new applicants, placing over 100 health experts in permanent positions and filling some 2,000 individual shifts. 20% of its users are looking for non-permanent jobs, according to Roggendorf.

The platform strives to differentiate itself by “starting with the candidates,” asserted the founder. Unlike traditional staffing sites, which search for applicants based on recruiters’ criteria, Medwing does the opposite and filters recruiters according to candidates’ preferences on whether the position is flexible or permanent, part-time or full-time. It’s an approach that the founder believes can optimize worker satisfaction. In addition to matchmaking, the platform also provides career consulting services to job seekers.

To Jacky Abitbol, who oversaw the deal for Cathay Innovation, Medwing is addressing two kinds of technological innovation his fund hunts for. For one, Medwing is driving “the future of work” by giving employees more autonomy and freedom. Terminal, which lets companies build out remote engineering teams overseas, is another startup in this category that has attracted financing from Cathay Innovation.

“Medwing is also bringing digital to a more traditional sector,” Abitbol told TechCrunch on the phone. That means streamlining the recruiting process by eliminating agencies or middlemen, saving time and costs for both workers and employers.

“What sounds very logical was not done this way until today,” the investor added.

Medwing operates a team of over 200 employees from over 30 countries, many of which have been hit hard by COVID-19. The startup is providing some of its services pro bono to fight the virus, placing professionals and volunteers in hospitals, nursing homes and private households that need support. Abitbol said the impact of the health crisis on the startup’s revenue remains “slight”, as only certain facilities are designated as coronavirus hospitals and demand will return to normal as the pandemic starts to ease.

#berlin, #cathay-innovation, #cherry-ventures, #europe, #health, #medwing, #northzone, #recruitment, #rocket-internet, #workforce

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Create a 90-day timeline after fundraising to strengthen investor-founder ties

As the coronavirus pandemic has disrupted the nature of businesses and the way we work, it’s making even more clear how important communication is when it comes to effective collaboration.

I’ve been reflecting on this a lot, particularly with regard to building great relationships between founders and investors, because we’ve recently closed a number of new deals and are continuing to meet new founders. As this new reality has caused me to re-evaluate my “typical” post-investment playbook, it begs the question: What does building a productive relationship post-close look like now and in more ordinary times?

I always tell founders that as a board member, my goal is to earn the right to be their first phone call in good times and especially bad, and that I also want to be able to proactively pitch both in times of crisis and when it’s business as usual. I know that there’s a fine line between an investor being helpful and being a tax, though, but this onboarding can help reduce the risk that it’s the latter. This is a two-way street, of course, but the better established this process is, the faster valuable contributions can happen.

Here’s where I’d start.

The first 30 days

Forming a new board and onboarding investors is similar to launching a team, and there’s plenty of research that shows that the way you approach this launch period is important for long-term success.

First, you’ll want to align with investors on update and sync cadence — and start implementing it. It’s a good idea to plan on regular email updates on a monthly basis leading up to the first board meeting, with the goal of getting new board member(s) up to speed so they can provide value and be helpful.

I appreciate seeing high-level metric updates as well as a few bullets on what is going well and what is not, and what is top of mind for the CEO. This might include new executives joining the ranks, new marketing activities or product planning and updates on key KPIs. For big milestones like a major launch or impactful competitive moves, or in extraordinary circumstances, like the coronavirus pandemic, it’s good hygiene to do more ad hoc updates.

#board-member, #column, #coronavirus, #covid-19, #doug-hudson, #entrepreneurship, #extra-crunch, #fundraising, #human-resource-management, #management, #onboarding, #recruitment, #remote-work, #venture-capital

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Attract, engage and retain employees in the new remote-work era

When looking for answers, where do people first turn? For many, it’s Google.

During the first half of March, we saw Google searches for “work from home” reach a 12-month high, garnering at least 50% more search interest than the anticipated peak, which usually occurs within the first week of January. This number will continue to grow as outside circumstances evolve.

This search behavior reflects the world around us. Today, employees and employers alike are grappling with the new norm — at least for the short-term — which is working remotely. While having a remote-ready model in place was once viewed as a competitive advantage to attract talent, it’s now a must-have to keep organizations afloat.

With vacant positions costing organizations around $680 daily, the impact that interrupted recruiting efforts can have on a business’ bottom line is jarring. As such, HR professionals were early adopters of successful remote communication practices, learning lessons that can be applied across the business to successfully make personal connections without being in-person. Employers are doing all they can to address their existing employee base at this critical time, while also working hard to maintain their hiring efforts.

Having the right technology in place to sustain work-from-home practices is more important now than ever before. There are four steps that employers can take to successfully integrate and adapt successful virtual hiring technologies into their business continuity plans, considering all outside circumstances, and without sacrificing their productivity and unique company culture.

Prepare and plan. Employers have an obligation to provide their people with clear direction in times of disruption.

#column, #coronavirus, #covid-19, #employment, #extra-crunch, #hiring, #human-resource-management, #recruitment, #remote-work, #startups, #telecommuting, #video-conferencing, #work

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