Cracking The Code

Challenged by a female employee, Gusto, an HR-software unicorn in San Francisco, figures out how to hire women engineers.

- Susan Adams

One spring day in 2015, Julia Lee, a top performer on the engineering team at the payroll-software start-up Gusto, asked Edward Kim, the company’s cofounder and chief technology officer, for a one-on-one meeting.

Sitting together on a gray couch in the middle of their open-plan office in San Francisco’s SoMa neighborhood, Lee, a Stanford grad who had interned at Google and Palantir, told Kim that she loved her work but was struggling with one issue. Of the 18 people on Gusto’s engineering team, Lee, then 26, was the only woman. Before she got to Gusto, she told Kim, “people often assumed I didn’t know the answer to a problem because I was a female engineer.” Even at Gusto, she was reluctant to share her feelings of self-doubt. Kim, Lee says, was extraordinarily receptive. In fact, he made it a personal project to study the gender breakdown on the engineering teams at other tech firms. The numbers he found were dismal.

Only 12% of the engineering staffers at 84 tech firms were female, according to statistics gathered in a public Google Doc posted in 2013 by Tracy Chou, then an engineer at Pinterest. Kim read a U.S. census report on racial and gender disparity in STEM employment and was troubled by a National Public Radio report that showed an increase in women graduating with computer science degrees through the early 1980s and then a steep decline from 1984 on. He also read a 2015 McKinsey study showing that companies with diverse workforces outperform financially. “The fact that no one else in tech was able to really crack the gender diversity nut and solve it represented an opportunity for us,” Kim says. “If we want to reimagine what HR is like for the very diverse workforces of our small-business customers, we ourselves have to build a diverse workforce.”