More Diversity in Tech Fields Leads to More Money, Study Reveals

By Aaron Hightower Mar 3, 2017
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A lack of diversity in the technology industry may restrict the amount of money companies and investors can make, a new report reveals.

"Breaking the Mold: Investing in Racial Diversity in Tech" is a compilation of data from more than 106 organizations, including some of the nation's largest tech firms; Pew Research; Harvard University; and the U.S. Equal Employment Opportunity Commission (EEOC). Open Media and Information Companies Initiative (Open MIC), a New York-based nonprofit, analyzed and compiled the report.

Open Mic Executive Director Michael Connor told SHRM Online that the report's results make "the business case for diversity. … It's important, and the problem is persistent and needs to be dealt with."

According to the report, black, Latino and Native American employees are underrepresented by 16 percent to 18 percent in the tech industry compared to their presence in the U.S. labor force overall. The report also states that the more diverse a company is, the higher its profits. Companies that are more racially diverse are 35 percent more likely to have higher financial returns than the national median in their industry.

Investors are listening, experts said. Tech companies with more homogenous staffs have received increased pressure from investors.

For example, Connor said, investors have filed proposals asking tech companies, like Apple, to diversify their entire workforce—from senior management and corporate boards to rank-and-file employees. According to the report, Apple's workforce is 56 percent white; Adobe's workforce is 69 percent white.

People of color are, proportionally, less represented in leadership positions in tech companies, as well. In the tech sector nationwide, according to the most recent statistics from the EEOC, whites are represented at a higher rate in the executive category (83.3 percent) than they are in the professional category (68 percent), which includes such jobs as computer programmer. However, other groups are represented at significantly lower rates in the executive category than in the professional category:

  • Black employees--2 percent of the executive category vs. 5.3 percent of the professional category.
  • Hispanic employees--3.1 percent vs. 5.3 percent.
  • Asian American employees--10.6 percent vs. 19.5 percent.

Among the Open MIC report's findings:

  • People of color are excluded from executive-level positions, promoted less and paid less than their white counterparts.
  • People of color report isolation, discrimination and toxic work environments that prompt them to take their talent elsewhere. In fact, men and women of color leave tech jobs at more than 3.5 times the rate of white men.


Causes for the lack of diversity vary, experts said.

Mary Fox, head of product marketing at Oakland, Calif.-based software company fr8star.com, believes part of the problem is there aren't enough minorities to hire.

"It's a combination of a number of problems," she said in an interview with SHRM Online. "At the outset, it's certainly a pipeline problem. We need more diverse tech candidates—but the problem doesn't end there. The bias begins with resume screening and continues to company interviews. Particularly in and around Silicon Valley, [interviews] are often geared toward the white alpha male," Fox said.

Beth Zoller, attorney and legal editor for New Providence, N.J.-based HR information services  company XpertHR.com, said there aren't enough early opportunities for minorities before they enter into the tech pipeline.

"Early opportunities and resources to gain exposure, experience and expertise with respect to science, technology, engineering and math exist mostly in more affluent neighborhoods and schools," she said. "Minorities may often lack available and effective mentors to guide and shape their career trajectory and decisions."
Connor, however, found evidence to the contrary in the Open MIC study.

"Our report found that black people and Latinos now earn nearly 18 percent of all computer science bachelor's degrees—but they hold barely 5 percent of tech jobs," he said. "The pipeline is an issue, but it is by no means the only issue because in fact blacks and Latinos are wildly underrepresented even in [other] areas."
 

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