Why Diversity In The Tech Workplace Is So Important

With recent gender-equality controversies rocking industry giants like Google and Uber, and the seismic wave of sexual harassment scandals at media and tech companies nationwide, expanding diversity in Silicon Valley (and Hollywood) is more critical than ever. Unfortunately, diversity efforts in the technology vertical are often put on the backburner. As tech executives struggle to keep up with the speed-of-light pace of change and constant competitive pressure to produce the “next big thing,” workplace diversity is often overlooked.  Despite ongoing pressure at leading tech companies and the VC firms that support them to diversify their teams, little has changed, so here is yet another reminder of why diversity is so important.

Study after study has highlighted the significant lack of gender and racial/ethnic diversity across the tech industry. For example, a 2014 report by the Equal Employment Opportunity Commission, shared that:

  • Women make up only 36% of the high-tech workforce (while accounting for 47% of the private sector workforce overall)
  • Hispanics account for 8% of the industry’s jobs
  • Black workers account for only 7% of the IT workforce

These statistics primarily reflect entry and mid-level diversity. At the executive level, these numbers decline dramatically, proving that the tech sector has a lot of work to do to bridge the diversity talent gap.

Unfortunately, there is no indication of significant change on the horizon. Despite widely publicized diversity efforts, annual reports of leading tech companies indicate that the numbers have only marginally improved over the last few years. As a sector that prides itself on rapid change, innovation, and influence, diversity is a challenge tech companies can no longer afford to ignore.


Diversity in Tech: More Than Just The Right Thing To Do

Why is it so important for Silicon Valley to increase its diversity profile? Many argue that, for an industry as forward thinking as technology, proactively improving diversity is just the right thing to do. However, there are several other reasons that prove hiring and retaining a more diverse staff isn’t just a feel-good narrative, but can actually have a positive impact on tech companies’ bottom lines.

Some key reasons today’s tech leaders should pursue a wider range of talented IT professionals include:


Tech’s Consumer Base Is Becoming More Diverse

A recent report by the US Census Bureau illustrates that consumer diversity is (and will continue to be) on the rise. Additionally, an article by Pew Research Center entitled, 10 Demographic Trends That Are Shaping The U.S. And The World, predicts that, by 2055, the US will not have a single racial or ethnic minority and that by mid-century the US will become a minority-majority nation.

These vital demographic shifts mean that the consumer base for tech companies will also become more multifaceted. The key to success for any product or business is a deep understanding of the customer; a workforce that mirrors its customer base composition can best accomplish that. To remain relevant to a broader range of consumers, tech product leaders must be able to empathize with all of their users as well as effectively anticipate buyers’ needs for long-term, sustainable marketplace success.


Diversity Allows A Culture Of Innovation To Thrive

Diversity fuels access to a wider set of ideas, which is the very foundation for innovation. Gender, culture, and even age and educational background shape a person’s identity, how they interpret their environment, and how they interact with others. Hiring IT employees with a unique and varying worldview can help companies develop truly innovative products that influence the marketplace on a global scale.


Diverse Companies Perform Better

Recent reports prove that a multifarious talent force can actually have a direct impact on a company’s performance and productivity. McKinsey published a study in 2015 highlighting that gender and ethnically diverse companies are more likely to have better financial performance than their less diverse counterparts. The US specifically demonstrates a direct linear relationship between racial and ethnic diversity. Every 10% increase in racial and ethnic diversity among senior leadership leads to a 0.8% increase in earnings. While the study does not prove causality, it does indicate that more diverse companies simply perform better.


Broader Hiring Channels Allows Access To A Larger Talent Pool

It’s hard to gauge the true extent of the current tech talent shortage. However, one factor remains clear: IT hiring managers consistently worry about (and struggle with) the ability to find sufficient, qualified tech talent.

Data suggests it’s not a matter of not having enough candidates to fill in employment gaps. Rather, tech companies are not diving deep enough into the available talent pool. A 2016 report by the Center of American Progress found that 27.5% of women of color and nearly 20% of men of color with advanced degrees in computer, mathematical sciences, or electrical engineering are either unemployed or working in unrelated fields.

Why are large percentages of qualified candidates overlooked? There are many likely factors, but conscious and unconscious bias, discrimination and apathy certainly play a part.  In many cases, it may also come down to standard word-of-mouth recruiting practices. Many tech companies recruit by tapping into existing employees’ personal networks, which often consists of people from similar backgrounds. In a world where 80% of job openings are not posted, those of us without inside connections can often get left out. The more diverse a company’s current workforce, the more likely it is to have an opportunity to reach a broader, more diverse recruiting network.


Reputation Matters

In business, corporate reputation matters. In today’s globally connected employment marketplace, we know that word (particularly digital word) travels fast. Uber’s recent fall from grace exemplifies that damage to a company’s reputation can be swift, significant, and extremely difficult to recover from. Rife with recent reports about rampant sexism and discriminatory practices at the company, Uber watched as both its industry status and customer base plummeted. Over the course of several tumultuous months, Uber lost considerable market share to Lyft without any indication of near-term recovery.

Fortunately, business owners can wield the power of a favorable brand image for positive industry impact, particularly with employment. A progressive, fair, and honest hiring reputation can prove a formidable recruiting tool. Hiring a more diverse workforce and creating a welcoming, inclusive environment can make companies more attractive workplaces for new talent. This, in turn, leads to more opportunities, a boost in positive publicity, and greater overall impact on consumers.

All of these issues and more will be highlighted in our upcoming podcast, Tech Forward, launching on March 14.  Don’t forget to tune in to hear entrepreneurs, tech leaders, venture capitalists and diversity advocates share their stories, solutions and visions for the future.  Learn more and get informed about upcoming episodes by subscribing to our newsletter, or following us on Twitter or Instagram.

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