Last month, in response to news of President Donald Trump's controversial executive orders, Apple CEO Tim Cook stated that his company, whose founder Steve Jobs was the son of a Syrian immigrant, would not exist if the US didn't have sound immigration policies.
While Apple and other American tech firms should be applauded for joining the legal fight against the executive order and making statements such as "diversity makes us stronger," they should also use this moment as an opportunity for some much-needed self-reflection on a troubling reality: The American tech industry remains a bastion of white, male privilege.
Even a cursory look at voluntary disclosures to the Equal Employment Opportunity Commission by American tech firms reveals huge racial disparities in the tech workforce compared to the private sector overall.
When my organization, Open MIC, reviewed data from some of the biggest tech firms, we saw a consistent pattern: overwhelming, disproportionate percentages of white employees. Adobe's workforce is 69 percent white and Apple's 56 percent. Google? 59 percent. Microsoft? 58 percent. The list goes on. Black people, Latinos, and Native Americans are underrepresented in tech by 16 to 18 percentage points compared with their presence in the US labor force overall.
Tech companies and investors should be concerned: Evidence strongly suggests that a racially diverse tech sector could translate into stronger financial performance. A McKinsey report showed a linear relationship between racial and ethnic diversity and a company's financial performance. "For every 10 percent increase in racial and ethnic diversity on the senior-executive team," the report stated, "earnings before interest and taxes (EBIT) rise 0.8 percent."
What's more, companies in the top quartile in terms of racial diversity are 35 percent more likely to have higher financial returns than the national median in their industry. In fact, one study by Intel and Dalberg found that the tech industry "could generate an additional $300-$370 billion each year if the racial/ethnic diversity of tech companies' workforces reflected that of the talent pool."
Despite this, tech companies' efforts to address the issue, which are by no means new, have yet to result in significant change, according to our research. The industry's fallback position has been to make investments intended to diversify the talent pipeline. However, research shows the pipeline isn't the only problem. Case in point: Black people and Latinos earn nearly 18 percent of computer science degrees, but hold barely 5 percent of tech jobs. Meanwhile, there is no justification for the lack of diversity in the many non-technical roles---lawyers, PR staff, marketing staff, etc.---that are required to keep a tech company alive and well.
The problem is evident not only when it comes to hiring, but also retention. People of color who enter the tech industry leave the field at more than 3.5 times the rate of white men. We begin to see that the tech industry must confront a larger problem of systemic racial bias.
People of color report isolation, discrimination, and toxic work environments. They are promoted and paid less than their white counterparts. And they are excluded from executive level positions. In fact, fewer than 1 percent of Silicon Valley executives and managers are black, according to the EEOC.
When you stop to consider how embedded technology is in our daily lives, it's easy to see why people like Rev. Jesse Jackson and even the EEOC have expressed concerns that the lack of diversity in the tech industry may have broader impacts such as the rising levels of inequality in the Bay Area.
In order to hold tech companies accountable to making change, we need a more comprehensive set of metrics to track and measure the problems. That begins with shareholders demanding more detailed disclosures that include data aggregated by both gender and race on topics like candidate pools and hiring pipelines. As tech leaders from Ellen Pao's Project Include and elsewhere have made clear, we also need more information on hiring and promotion rates, as well as voluntary and involuntary attrition rates.
Beyond numbers, companies and their Boards of Directors also need to advance policies that have already proven successful, like developing and publicly disclosing time-bound goals for increasing racial diversity, and linking executive pay to the achievement of those goals. After publicly setting diversity goals in 2015, Pinterest, for example, boosted hiring rates of underrepresented people of color by 8 percentage points for technical roles and 5 percentage points for non-technical roles. Since then, both Microsoft and Pandora have also taken similar steps to increase their own diversity.
In addition, it's critical that companies engage white employees, especially executives, in ensuring that the responsibility to increase racial diversity falls on those who currently hold the most power and influence, rather than on the tech professionals of color who are most directly affected. And finally, more transparent and more thorough annual reporting on the status of the workforce, as well as on the status of diversity initiatives, will help ensure accountability.
Absent these changes, the tech industry will continue to perpetuate existing forms of racial bias and discrimination, which pose legal, financial, and reputational risks that will persist until the industry's policies align with its rhetoric. Now would be as good a time as ever to recommit to tackling the problem, which would send a message to the whole country that diversity is not only good for business but also worth fighting for.