Founder Traits Influence Hiring and Benefits at Small Businesses
At Gusto, we have been considering the role of the founder in building diversity and employee satisfaction in the workplace, and whether the characteristics of the founder play a big role in that.
To find out, we recently surveyed 886 of our customers about their companies, founders’ backgrounds, hiring practices, and employee diversity.
Happily, the vast majority of Gusto survey respondents say that their company actively tries to hire people of diverse backgrounds, attributes, and life experiences:
Digging further, we canvassed these business owners and founders about their characteristics — race, ethnicity, gender, age, immigration status, and sexual orientation — and explored what part that might play in their hiring practices and benefits offerings. We also explored whether founder profiles impact employee turnover and satisfaction.
One finding is clear: the characteristics of small business founders are significant determinants of their company’s employee makeup, satisfaction, and benefits.
Race and Ethnicity
The racial and ethnic background of a founder is perhaps the strongest indicator of hiring choices. 47% of non-white founders said that a majority of their employees are racial or ethnic minorities, compared to only 13% of white founders.
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For immigrant founders, race and ethnicity seems to be a strong consideration when hiring. More than a third (36%) of immigrant founders hire more racial and ethnic minorities, compared to only 14% of non-immigrant founders.
The gender of founders appears to be profoundly important for the gender balance of their staff. 70% of female founders and only 36% of male founders said that more than half of their workforce is female.
A founder’s sexual orientation may have an impact on their hiring of racial or ethnic minorities. Around 25% of LGBT founders said that a majority of their employees are from racial or ethnic minorities compared with only 18% of heterosexual founders.
Employee Benefits Offered
Perhaps the most interesting indicator of whether or not a founder offers employee benefits is that of gender. 57% of male founders offer at least one benefit, compared to only 45% of female founders.
More than a third (39%) of our respondents agreed or strongly agreed that their company will change or is considering changing HR practices as a result of recent news events.
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About the survey
In March 2018, Gusto surveyed a random selection of customers with at least 5 employees. The 886 small business owners who responded are among the 60,000 customers in the United States who use Gusto. Each company was limited to one survey submission.