Contents

SFG5: Fairness and equal opportunities

Why is this important? Copy link

Did you know? The EU average gender pay gap was 13% in 2021.

Fairness and equal opportunities is a wide-ranging topic which can take many different forms depending on the context. We break it down into three areas:

  1. Having an overarching commitment to human rights
  2. Treating employees fairly and equitably
  3. Giving back to the community and acts of philanthropy

1. Having an overarching commitment to human rights Copy link

Quite literally, human rights are rights inherent to all human beings. These rights typically include the right to life, liberty and security, freedom from slavery and torture, freedom of association, the right to work, and many more.

In the context of early-stage and high-growth tech companies, human rights cover a wide spectrum of topics: from freedom of expression, employment contracts and labour rights, to data practices and privacy, supply chains, and the diversity of your team.

While it is a theme that cuts across many of the other ones presented in this guide, it is important to explicitly consider it as a whole. An overarching commitment to human rights provides the backbone for the effective identification, prevention and mitigation of human rights risks and breaches, which is the responsibility of any business, as set out by the UN Guiding Principles on Human Rights.

Technology start-ups should consider human rights not only in the context of their direct employees but also indirect workers, such as:

  • Outsourced tech-based services, for example, overseas-based tech support companies, and outsourced customer service centres.
  • Distribution/delivery workers
  • Temporary or casual workers
  • Local outsourced services – e.g. canteens, cleaners

They should also carefully integrate the risks and impacts of emerging technologies for human rights, dignity, autonomy and privacy as they develop their products and services.

If manufacturing is involved, it should be a priority to assess manufacturing suppliers against a code of conduct based on the International Labour Organisation’s principles.

An explicit stance or policy on human rights (which could be incorporated in the company’s code of conduct) is becoming increasingly essential as new regulations such as the Norwegian Transparency Act, the German Supply Chain Due Diligence Act, and the EU’s proposed Corporate Sustainability Due Diligence Directive are rolled out to hold larger enterprises accountable for ensuring that human rights are observed across their operations and supply chains.

2. Treating employees fairly and equitably Copy link

Treating employees equitably

It is within the gift of any organisation to ensure that employees are treated fairly and provided with equal opportunity. It needs to be in the fabric of the company leadership values and culture, reinforced by mechanisms. It is worth remembering that treating people fairly often means treating them differently.

Fair remuneration and compensation is not only the right thing to do but also integral to attracting and retaining the best talent. In this context, the gender pay gap requires special attention. There are two types of pay gaps:

  1. The "unadjusted" pay gap (often referred to as the gender pay gap) measures the average difference in pay between all men and women within a company.
  2. The "adjusted" or "unexplained" pay gap, by contrast, calculates the difference in pay between women and men after accounting for the factors that determine pay, like job role, education, and experience.

In both cases, data shows that the gender pay gap is real, and regulation is being rolled out to demand greater transparency and accountability of businesses on this issue

In the UK and the US, the ethnicity pay gap is also increasingly discussed and documented, showing the difference in the average pay between staff from ethnic minority backgrounds compared to 'White' staff in a workforce.

3. Giving back to the community and acts of philanthropy Copy link

There is an expectation for businesses to give back to the local community in which they operate. This can take many forms but is often done through volunteering and fundraising activities, supporting the more marginalised and disadvantaged groups, or a particular societal cause.

Corporates are increasingly incentivising and facilitating the individual philanthropy of their employees by providing some benefits such as payroll giving, and volunteering days.

Charity days and other collaborations and challenges are also a great driver of team engagement.

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Legislative tailwind Copy link

Sidebar

The EU’s new Directive for pay transparency is mandating pay transparency for job-seekers, right to information for employees, and reporting on gender pay gap. In the first stage, employers with at least 250 employees will report every year and employers with between 150 and 249 employees will report every three years. In 2028, employers with between 100 and 149 employees will also have to report every three years. Where pay reporting reveals a gender pay gap of at least 5% and when the employer cannot justify the gap on the basis of objective gender neutral factors, employers will have to carry out a pay assessment, in cooperation with workers' representatives.

Many states and cities in the United States are also adopting pay transparency laws, requiring covered employers to list salary ranges in job postings and advertisements.

In the UK, any employer with 250 or more employees has had to report their gender pay gap data since 2017.

The ethnicity pay gap is not currently mandated but is increasingly common practice in the UK, with calls from charity groups to make it mandatory to help address pay disparities between employees from different ethnic backgrounds.

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Where to start Copy link

 

Pre-seed/seed Copy link

Treating employees fairly and levelling the playing field

  • Be fair and transparent about pay. Reevaluate packages of first joiners as the team grows to avoid frequency bias
  • Offer team members free shares or stock options

Series A Copy link

Having an overarching commitment to human rights

  • Consider human risks for both direct employees and indirect workers
  • Express an overarching commitment to human rights and integrate it into your values and practices

Treating employees fairly and levelling the playing field

  • Put in place salary bands to be fair and transparent about pay.
  • Check for frequency bias and gender pay gap - favour a payroll system that includes a pay analysis tool
  • Offer team members free shares or stock options
  • Formalise employee benefits package (see SFGs 7 and 8)
  • Introduce a parental paid leave policy beyond statutory requirement, supporting all types of new parents in a gender-neutral way

Giving back and philanthropy

  • Find a team member to organise the first charity/ community event, either closely linked to team skills and capabilities (e.g. fintech company doing something on financial education), or for a cause that impacts all (e.g. environmental pollution). Run as team building event.

Series B onwards Copy link

Having an overarching commitment to human rights

  • Introduce a due diligence process embedded in the company’s operations so the company can be sure that everyone, particularly indirect workers, is respected and protected and any human rights breaches are identified and remedied by the company itself, not exposed publicly by a third party.

Treating employees fairly and levelling the playing field

  • Fair compensation
    • Striving for pay equity by defining clear principles for pay and performance early on. Base salary should reflect the value to the market and the value to the company. Creating a codified and transparent performance review process early is instrumental in fostering a culture of equal opportunity.
    • Put in place salary bands early. Fairness aside, having to do so retroactively at scale is extremely fiddly and hard.
    • Be aware for example of frequency bias, whereby the more recent the hire, the more closely to market pay, putting at a disadvantage the longer-term employees.
    • One simple practice worth putting in place early: Ensure all managers have a gender lens when they do salary reviews--at the manager level and at the company level. This quickly brings to light any bias and allows the company to act on it preemptively.
    • There also are some pay analysis tools (sometimes built into payroll system solutions) which can help you identify, measure and address pay gaps.
  • Enhancing the compensation package, through:
    • Offering competitive employee schemes linked to value creation. This could be equity compensation (e.g. free shares, stock options), or profit share (e.g. bonus). OptionPlan provides the largest set of benchmark data, comprising over 20,000 option grants from more than 1,650 start-ups across the US and Europe.
    • Offering good employee benefits. Put in place an attractive package of employee perks and benefits and make sure that you regularly communicate about it and report on it. Consider using an all-in-one benefits platform such as Cobee, Thanks Ben, or specific benefits such as meal vouchers through Swile or “Ticket restaurant” cards (France).
  • Financial education. Help employees take care of themselves and their finances, from basic budgeting skills and access to tax advice. You should be able to arrange for a free introductory session from your pension service provider or broker.
  • Parental leave policy. You have the opportunity to offer parental paid leave beyond the statutory requirement.
    • Designing a paid-leave parental policy is integral to attracting and retaining talent, female talent in particular.
    • Supporting new parents in a gender-neutral way is also increasingly seen as tackling the systemic challenges and inequalities faced by women in the workplace. By normalising time out, we are creating a more levelled playing field between men and women with regard to parenthood. Nordic countries are showing the way, with Sweden for example playing out parental benefit for 480 days for one child.
    • Consider both “birthing” and “non-birthing” leaves. Statutory requirements can be unkind towards adoption, surrogacy, etc.
    • This is why at Balderton we have introduced a gender blind parental leave package, offering 6 months fully paid to all new parents.
    • A return to work or support initiative will help employees transition back into their role.

Giving back and philanthropy

  • Volunteering and charity giving: Introduce early on a volunteering day allowance and organise a team Impact Day. It is a great source of team building. At Balderton, we choose to support vulnerable and marginalised groups of society and partner with local charities in our London Borough of Camden.
  • Workplace giving: Giving your employees the opportunity to give to charity, often with fiscal incentives, and a company gift-matching scheme. For example, many platforms support pre-tax payroll giving in the UK.
  • Outreach: Contributing to social mobility by supporting initiatives that support talent access to your industry. This could be a great addition to your hiring strategy.

 

Data collection Copy link

  • % FTEs offered to participate in a scheme linked to value creation
  • £/€ charity contribution
  • Gender pay gap (%) explained by position and seniority, and unexplained
  • Promotion velocity, attrition rate and global workforce increase of underrepresented groups (e.g. women, ethnic minorities, employee living with a disability, etc.)
  • Ethnicity pay gap (%)

 

Useful resources and further reading Copy link

Fair remuneration and compensation

  • Living Wage Foundation – organisation helping people receive a wage that funds their everyday living.
  • Fair and competitive remuneration software solutions:
    • Gapsquare – Fair Pay Analytics for Inclusive Employers
    • Ravio – Make smarter salary, equity and benefits decisions
  • OptionPlan – Index Ventures

Parental leave

Pay gap reporting

 

Examples and testimonials Copy link

See Zuto’s standalone Gender Pay Gap Report 2021, downloadable from their website.

See GoCardless’ gender pay gap reporting as part of its 2022 Diversity Report.

“I know that we are not closing our gender pay gap fast enough. We on the Executive team take responsibility for driving the changes we must see in order to increase the proportion of women in senior roles over the next three years. As GoCardless embarks on the next phase of growth, I am confident that we are taking positive steps to build a workplace that serves ‘many and more" Hiroki Takeuchi Co-Founder and CEO at GoCardless.

smol has rolled out many social initiatives with direct ties to its core product, with the aim of raising both awareness and funds to support important causes.

“As an employer, we believe that we have a responsibility to offer quality job opportunities to those who face barriers to employment. It’s always felt important to us that those who are the most disadvantaged should have fair and equal access to quality jobs. In turn, this only strengthens our team and business. Upskilling employees and providing better paid work that is more stable, with valuable career progression is something we continue to champion; and those who mentor and train will benefit in turn by developing the skills to nurture somebody else’s development.” Hilary Strong, Chief Marketing Officer at smol.
“Working with charities, organisations and community groups plays an important role in educating all of us at smol and inspiring us to always do more. As a brand we have a responsibility to shine a spotlight on issues and to drive for meaningful change. Tackling hygiene poverty, ocean plastic pollution, and social inclusion through charitable initiatives and sponsorship really makes sense for a cleaning brand and is a great source of pride for our team.” Hilary Strong, Chief Marketing Officer at smol.

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