Promoting a “flat hierarchy” with fewer layers of managers might sound modern and progressive. It promises agility, equality, and empowerment. Yet, a new study co-authored by Wharton management professor Saerom (Ronnie) Lee suggests that while flat organizations may appeal to some candidates, they can also quietly deter others—particularly women.

“Flat structures might appear egalitarian and inclusive,” Lee says. “But for many women, they can raise red flags about fairness, support, and opportunities for career growth.”

In two labor market experiments, Lee and his co-authors found that highlighting flatter hierarchies with fewer management layers in recruitment materials can significantly reduce the share of women applicants, even as men’s interest remains the same or ticks up slightly.

Published in Strategic Management Journal early last year, the study was co-authored with Reuben Hurst from the University of Maryland’s Smith School of Business, and Justin Frake from the University of Michigan’s Ross School of Business.

‘Flat structures might appear egalitarian and inclusive. But for many women, they can raise red flags about fairness, support, and opportunities for career growth.’—Saerom Lee

What a flat hierarchy says about your workplace

To gather their findings, the trio first ran a field experiment with a U.S. healthcare startup. They sent recruitment emails to roughly 8,400 job seekers for two job openings—one in software engineering and the other in business development. The only difference between the emails was that some mentioned the company had a “flat” structure with fewer management layers, while others didn’t.

The results were striking. When the flat structure was highlighted, the proportion of women applicants fell by 8 percentage points—from 27% to just 19%.

The researchers then conducted a second study—this time, an online survey of nearly 8,500 U.S. workers. This study backed up the earlier results and explained the gap in applications: Women were more likely than men to associate flat hierarchies with limited opportunities for advancement, heavier workloads, and a poor cultural fit.

Flat workplaces can’t fix systemic issues

The findings pose a challenge for companies. In theory, flat workplaces are meant to be more equal, inclusive, and empowering than traditional “bureaucratic” structures. But in practice—or at least in perception—many women see them differently.

The study suggests that with less structure and managerial oversight, flat organizations can leave more room for “bro cultures” that push women to the sidelines. Some study participants says they would struggle to fit in at such companies. One woman respondent acknowledged that a flat structure “has the potential for decreasing unnecessary bureaucracy. However, that alone will not solve systemic issues like those faced by women in many companies.” Another noted that flat organizations can “prevent upward mobility of marginalized employees.”

‘If a flat hierarchy is core to your venture’s identity, avoid overemphasizing it in recruitment—or pair it with clear assurances about fairness, workload, and career progression.’—Saerom Lee

How startups can boost gender diversity

The study’s findings carry particular weight for startups. Founders often favor flat structures to move quickly and remain agile. However, this research reveals that a lean organizational chart can come with a hidden cost: a lower representation of women in the applicant pool. Left unaddressed, this can entrench what some call a “diversity debt,” where a homogenous early team becomes harder to diversify as the startup scales its business.

“For companies trying to hire more women, the message is pretty clear: Flat doesn’t always feel fair,” Lee says. “If a flat hierarchy is core to your venture’s identity, avoid overemphasizing it in recruitment—or pair it with clear assurances about fairness, workload, and career progression.”

The lesson is not to abandon flat structures, but to recognize their downstream consequences on who chooses to apply. Startups can retain the agility and openness that such structures can bring while addressing perceptions that deter women from applying. This might require communicating transparent promotion criteria, clarifying roles, and showcasing inclusive practices alongside any mention of flatness. Addressing these concerns early may help young firms attract a broader pool of talent, avoid diversity debt, and build a more inclusive, fast-moving team better positioned to scale and compete over the long term.

Published Sept. 9, 2025, by Knowledge at Wharton.