06/14/18

Minority Founders Lead In Diversity and Equality, Study Says

There have been a number of strides made in the past few years to combat inequalities in business. These strides, however, are just a start. In 2017, only 17% of startups had a female founder. Additionally, of the nearly 28 million small businesses in the US, only 909 are certified LGBT Business Enterprises as of October 2016, according to a National Gay and Lesbian Chamber of Commerce report.

These numbers show a clear need for improvement, and while much has been done to rally the majority to help with the cause, a new study suggests that minorities themselves are the primary catalyst of equality change in the workplace.

The study, performed by Gusto, surveyed 886 of their customers. Of those surveyed, 93% say: “my company actively tries to hire people with different attributes, backgrounds, and life experiences.” This means that almost everyone is trying to make a difference – but it begs the question: where is the real difference being made?

Well, consider that around 47% of non-white founders say that a majority of their employees are racial or ethnic minorities, compared to only 13% of white founders. Now, this is a large discrepancy that could be explained by the fact that the study didn’t control for key factors, such as geographical makeup of the local labor force, but the statistic is still indicative that minorities are leading the equality charge.

For example, 36% of immigrant founders hire more racial and ethnic minorities. compared to only 14% of non-immigrant founders. Also, 70% of female founders – in comparison to only 36% of male founders – said that a majority of their workforce is female. Additionally, 1 in 4 businesses with LGBT founders said that the majority of their employees are racial or ethnic minorities.

These numbers all tell the same story—that minorities tend to be the ones building more diverse workplaces. Considering the challenges minorities already face in breaking into the small business sphere, it’s pretty amazing that they’re also bringing others up with them. And for great benefit, as well. According to Forbes, having a vibrantly diverse workplaces is “essential” for businesses who want to stay competitive.

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About the author

Andrew Mosteller
Andrew Mosteller
Andrew Mosteller is a freelance writer and regular contributor to Lendio News. His upbringing in an entrepreneurial family nurtured a passion for small business at a young age. Andrew's father, an equity fund manager, taught him the ins and outs of investment financing. Now, Andrew spends his time writing copy for business owners, helping them expand and advertise their unique brands. He's also studying Strategic Communications at the University of Utah. When Andrew's fingers aren't glued to the keyboard, he spends his time reading, podcasting, composing music, and bombing down the ski slopes.

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