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A new report from diversity analytics company Blendoor reveals tech companies’ pledges of support for Black Lives Matter only went so far.
The State of DEI in Tech 2021 spotlights the diversity, equity, and inclusion disparities in 240 of the world’s largest and well-known tech companies. It comes a year after George Floyd’s murder. The death of the Minneapolis Black man at the hands of police reverberated around the world and prompted a wave of declarations and promises by organizations to make Black Lives Matter a part of their mission, and promote diversity, equity, and inclusion in all facets of their work.
Blendoor counted 535 pledges worth $4.56 billion made by a majority of those tech companies between January 1 and December 31, 2020. But the report also reveals, for example, that the tech companies that made Black Lives Matter pledges or statements have 20% fewer Black employees on average than companies that did not make similar pledges and statements.
“Despite these public displays of commitment to DEI — and the investment of billions of dollars over the last seven years — there is little evidence of tangible progress overall,” said Blendoor founder and CEO Stephanie Lampkin, MBA ’13.
The report also spotlights that there are no Black females who are named executive officers (usually the five highest paid executives at a publicly traded company) in the 240 tech companies analyzed. Women only make up 15% of those named executive officers and on average make 21% less money than male named executive officers. And there are 49% fewer Asian executives compared to Asian workers at entry-level positions, the largest drop-off in the tech pipeline according to the report.
Lampkin started Blendoor in 2015 and in 2020 launched its BlendScore tool. The tool analyzes companies using a variety of information like public data sets as well as company websites, annual reports, diversity reports, and equity and inclusion performances. Blendscore was used to compile the State of DEI report using data from January 1, 2020 through March 31, 2021. A company’s score is based on four criteria: leadership, retention, recruiting, and impact.
Here’s a closer look at some of the report’s findings.
Leadership
According to the report, 42% of tech company executives analyzed are women or people of color, but white women represent about half of that group. White men represent about 58% of tech executives, while Asian (South, East, and Southeast) men make up 12% of tech executives. Asian women hold less than 4% of those roles, while Black men and women, and Latino and Indigenous men and women, make up less than 5% total.
Of 240 tech companies analyzed, zero had a Black female as a named executive officer. NEOs are the five highest-paid jobs in publicly traded companies.
Retention
The average salary for a white employee at one of the 240 tech companies scored is $130,000, compared to $98,000 for Latino and Indigenous employees; Black employees make an average of $91,000.
Companies founded after 2008 had an average of 32% more Asian executives than older companies. Larger companies with more than 10,000 employees had on average 56% more women executives than smaller companies. Companies headquartered in the Midwest have an average of 50% more underrepresented minorities than companies in other parts of the U.S. Underrepresented minorities are defined in the report as any individual in the U.S. in the tech industry who does not identify as white or Asian.
Recruiting
According to the report, Asian women in the tech companies studied have the lowest upward mobility from entry-level to executive/senior-level, with 58% fewer Asian women in executive positions compared to the number of Asian women in entry-level roles (called a drop-off rate). Asian men have a drop-off rate of 44%. Underrepresented women experience a drop-off rate of 25%, while underrepresented men experience a drop-off rate of 50%.
White women and white men did not experience a drop-off rate. Both are better represented in executive/senior-level roles than they are in entry-level roles.
Impact
Impact refers to a company’s established programs and partnerships aimed at corporate social responsibility.
Annual diversity reporting is the most common impact practice among the 240 tech companies analyzed, with nearly half of the companies analyzed doing some sort of reporting; followed by supplier diversity that emphasizes relationships with women, people of color, veterans, and people with disabilities; and diversity scholarships.
‘We need to do better’
Lampkin said the report does offer signs of improvement, like growth in female employees and Asian employees at every level of tech in the past six years, as well as more companies sharing their data, hiring diversity consultants, forming employee resource groups, and conducting unconscious bias training.
“The companies who are making pledges are also saying we need to do better,” Lampkin said. “What we’re trying to elucidate is just saying ‘we’re working on it’ is insufficient. If indeed you want to do better, show us your numbers on a regular basis much like you do with quarterly financial reporting.”
The absence of Black female named executive officers and the 20% fewer Black employees figures are two things that stood out to MIT Sloan lecturer But she said she wasn’t surprised at the report’s overall findings — or what might appear to be a lack of progress from the 240 tech companies.
“This isn’t about getting an anti-racism widget to market,” said Lazu, a former Berkshire Bank executive vice president who focuses on inclusion in the innovation economy. “It’s important to understand that what you’re changing here is value structures, and that doesn’t happen quickly.”
Building and maintaining a diverse and inclusive company is a process of continual accountability, Lazu said, but she offered some short-term steps for managers. They include individual education — listening to podcasts and reading books to better understand the history of diversity, equity, inclusion, and corporate accountability — and looking at the numbers, to see who exactly makes up their workforce.
Blendoor offered several calls to action for companies, including the adoption of reporting standards, and incorporating diversity, equity, and inclusion standard metrics into their due diligence or when they are raising funds. Blendoor is also pushing for public disclosure of EEO-1 forms, which provide demographic breakdowns of a company’s workforce by race and gender.
“2021 is ushering in a new generation of environmental and socially consciously investors, consumers, and job seekers,” Lampkin said. “Companies who take an apathetic or apolitical stance on social issues will find it difficult to attract and retain the best talent.”
