Is Silicon Valley Tech Diversity Possible Now?

Abstract

Information technology firms have been growing rapidly and are generating high paid jobs, impressive returns on investment, and incredible stock returns. The Silicon Valley region in particular has been singled out as the global hub for innovation and income growth. Simultaneously, Silicon Valley Tech firms have generated sustained criticism for a lack of demographic diversity and repeated accusations of hostile work climates toward women and minority employees. For large Silicon Valley Tech public recognition of continued employment diversity challenges as well as claims of hostile workplaces are widespread. We examine diversity in the Tech industry by calculating executive, managerial and professional employment shares by race and gender for 177 leading Silicon Valley Tech firms, comparing them to 1,277 smaller Tech firms. These shares come from data reported to the U.S. Equal Employment Opportunity Commission in 2016, which every large workplace is required to submit under the 1964 Civil Rights Act. Overall, we document for the first time considerable variability among firms in their employment diversity. Diversity in Tech is clearly possible now and our results suggest that some firms have already figured out how to do it. We also show that it is possible to develop metrics for evaluating firm’s success or failure relative to their peers. Benchmarking firm success or failure at achieving more diverse workforces is a prerequisite for holding both firms and their management teams accountable as well as increasing transparency to both internal and external stakeholders. The causes of Tech’s diversity problems are no doubt complex. This does not mean, however, that the solutions need be. Employment diversity is a mathematical result of who gets hired, promoted and retained. To change diversity these three simple factors need to be measured, monitored and managed. Since the internal climates of firms are central to both recruitment and retention, in the end this is what needs to be managed. These firms already know how to develop innovative products, compete in dynamic global markets, hire in competitive labor markets, and are rapidly transforming our world. It’s difficult to come up with a plausible reason why many cannot manage diversity. In this report we show that some firms are diverse, so then the question becomes why some are not.