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How tech start-ups are closing the gender gap

ZestFinance
Source: ZestFinance

When it comes to diversifying tech, some start-ups are ahead of the curve.

The announcement Wednesday that Netflix would offer up to a year's paid leave for employees who become parents underscores a shift underway in Silicon Valley: The effort to attract, and keep, more female employees.

Many established companies have had a hard time with this. Yahoo's 2015 diversity report showed that only 16 percent of its technology jobs and 24 percent of its leadership positions are staffed by women. Reports from companies such as Facebook (16 percent women in tech jobs, 23 percent in leadership) and Google (18 percent women in tech jobs, and 22 percent in leadership) don't look much better.

One start-up, ZestFinance, based in Los Angeles, decided to make closing the gender gap a priority. The 80-person staff is 42 percent female, with 33 percent of its tech engineering staff and 40 percent of its leadership team staffed by women.

Read More Yahoo highlights Silicon Valley's diversity problem

"What really has allowed Zest to kind of attain this level of women in the workplace is that we approach it from the perspective of going past the numbers," said Sonya Merrill, Zest's chief people officer. "We really look at it in terms of 'Yeah, the numbers are great, but the numbers are not enough.' You really have to bake it into the company to make it work."

Zest follows four different principles in hiring to ensure they're recruiting a diverse employee base.

'Everybody has to be on the same page'

ZestFinance
Source: ZestFinance

First, Merrill says Zest tries to diversify for "the right reasons": "Diversity is really key to winning. When you have diversity in your employee base, you get more diverse perspectives, more diverse conversation," she said. "And when you have better outcomes on a whole, your entire business is better."

Second, Zest's hiring practice aims to get women and minorities in the door: "Everybody has to be on the same page in terms of understanding that we are looking for people who don't look like us," said Merrill, whose husband is the company's founder and CEO.

Read More ZestFinance targets loans at the cream of subprime borrowers

Third, the company aims to have a supportive corporate program, Merrill said. "All people want to work at a place where they are valued," she said.

Performance reviews are not just based on what an employee accomplished that year but also on how the employee completed the tasks: Did he or she uphold the company's core values?

"All people want to work at a place where they are valued." -Sonya Merrill, Chief People Officer at ZestFinance

"You can get great results by being a jerk," Merrill said. "At Zest, you could get the best results in the world but if how you got there doesn't uphold our values, you won't get those great results."

Lastly, the company tries to have competitive benefits. They also offer fertility benefits in their health-care package and six months' maternity leave. Paternity leave and unlimited vacations days are also provided, in addition to in-house manicures, pedicures and massages.

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"The most important thing that a company can do is recognize that working moms actually have two full-time jobs," Merrill said. "And the one they do at home is more important than the one they do at work."

Heidi Kim, senior product manager at Zest, just celebrated her one-year anniversary with the company. Before joining Zest, she co-founded a food tech start-up and graduated from Harvard Business School.

So when Kim arrived at Zest, she had a bit of culture shock. She wasn't used to a culture that encouraged taking time for your family or taking vacation time.

"I remember being kind of surprised that people were actually using their unlimited vacation and that it was a part of the culture here," she said. "I don't know anyone else who works in a place where both men and women are encouraged to take care of their families first."

LinkedIn: 'This takes time'

The LinkedIn building in Mountain View, California.
Source: Katherine Walton
The LinkedIn building in Mountain View, California.

The more established LinkedIn is taking a different approach, launching a Women in Technology initiative with multiple task forces to improve the gender gap.

"Each task force has a (female) leader, and a team of volunteers around the organization," said Caroline Gaffney, director of product management at LinkedIn and a current team leader for the Women in Technology program. "What we did was a similar process to how we do product development."

In its 2015 diversity report, LinkedIn reported that 18 percent of its technology jobs and 30 percent of its leadership positions are staffed by women, up from 17 percent and 25 percent respectively in its 2014 report.

Read More LinkedIn VP: Gender equality can help firms

The four task forces in the program focus on culture, empower, attract and community. Each one hosts tech talks, workshops and mentor events on a regular basis for employees to participate in.

Nicole Leverich, LinkedIn's director of corporate communications, said the program has been in place for a couple of years now, but it wasn't until the end of 2014 when the program gained new momentum.

Since then, the company has focused more on quarterly goals for diversity initiatives, including more men in the conversations and recruiting more employee volunteers to dedicate at least 20 percent of their time per quarter to the initiative.

"In order for women to be successful at LinkedIn, men need to be a part of the team," she said.

Read MoreSilicon Valley 'needs guidance' to boost diversity: Entrepreneur

Yet despite the change in focus in the past year, the company has yielded little change in its demographics.

"Any kind of positive growth is great," Gaffney said. "This takes time, and it's not going to happen overnight, so the overall goals are a long-term vision."

'Decide that it matters to you'

Beth Bernhardt, lead manufacturing technician at Other Machine Co., discusses the results of a QC bed test, the last thing each Othermill product undergoes before being shipped to customers.
Katie Wilson | Other Machine Company
Beth Bernhardt, lead manufacturing technician at Other Machine Co., discusses the results of a QC bed test, the last thing each Othermill product undergoes before being shipped to customers.

In San Francisco's Mission District is another company achieving a diverse workforce.

At Other Machine Co., a hardware company, the total 23-person company is 52 percent female, with a technology staff that is split 50 percent between women and men.

Danielle Applestone, CEO of the 2-year-old start-up, said the only thing her company did to attract more female candidates was simply recruit more women.

"You have to make sure that your job descriptions aren't discriminatory towards anyone," she said. "Once we bring people into the process, we find people who are balanced who are aware of how important it is to have teams of different types of opinions on them."

Read More The growing case for diversity as a profit source

Certainly, having a female founder contributes to the company's success rate when it comes to recruiting women, Applestone said, but the company also strives to create a more inclusive environment for everyone.

"We don't have any jerks," she said. "We also make sure that people don't get interrupted, and if they do it's like, 'OK, let's rewind, let's give this person time to speak,' and things like that."

"That's number one, decide that it matters to you. Any company could do what we do if they decide that it matters." -Danielle Applestone, CEO of Other Machine Company

Other Machine Co. builds a portable desktop CNC mill that allows customers to create 2-D and 3-D objects out of durable materials, such as wood, metal and plastic, using digital designs.

"We make a product that is used by people from all different backgrounds," Applestone said. "Two or 3 percent of all CNC machine operators are women, and I was like, 'Wait, why?' It doesn't require crazy upper body strength to run these machines."

Read MoreGoogle still searching for workplace diversity

And for the company, retention is just a matter of providing a challenging and welcoming work environment for employees.

"We are small, and we can't afford to pay you what Google pays," Applestone said. "So we need to make up for that pay cut with something else."

Applestone says that diversifying its workforce is all about the mindset of top leadership.

"That's No. 1: Decide that it matters to you," she said. "Any company could do what we do if they decide that it matters."

'It's also about the person'

6sense
Source: 6sense

At San Francisco-based 6sense, CEO Amanda Kahlow treats everyone like family, which helps to create an inclusive environment.

"It's not all about the code, but it's also about the person," she said.

Walk into the 2-year-old company's loft-style offices, and you might be confused as to where you are.

Calvin, Kahlow's Burmese mountain dog mix, will run up to greet you. The snack closet will be overflowing with pita chips and other healthy snacks, and the female restrooms will be stocked with feminine products.

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When first designing the space, Kahlow said she heard concerns that it might not be corporate enough for the clients. Kahlow didn't care.

"I'm building a place where people want to come and feel supported, and this is where they spend 99 percent of their time, so I feel like we're building a home and a family," she said.

6sense CEO Amanda Kahlow and her dog, Calvin, in the office.
Source: 6sense
6sense CEO Amanda Kahlow and her dog, Calvin, in the office.

Among its 46 employees, the company is 40 percent female, with 26 percent of its technical jobs staffed by women.

"It's also about men wanting and embracing and embodying their feminine, just like how I embrace my masculine in my leadership," she said. "We have masculine and feminine traits."

On the day before New Year's Eve, Kahlow asked the entire office to come in from 8 a.m. to noon to engage in meditation. No one was required to participate, but everyone did.

Read MoreManaging workplace stress through meditation

She was worried it would backfire. But, afterwards, about six people cried as a result of personal discovery.

"Teaching people how to care about themselves and then each other is, I think, what makes women want to work here," she said. "It's the empathy and the heart and the compassion."