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.
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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.
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.
For more findings and testimonials from small business founders, download the full Gusto report.
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.