The Cost Of Silence: How Ignoring DEI Issues Is Destroying Companies And Shattering Lives

Businesses are on pace to lose billions in revenue if Black professionals continue to be underrepresented in tech jobs. This must be treated as a fundamental economic issue that requires urgent attention and robust solutions.

The Importance of Addressing the Lack of Diversity in Tech

The tech industry has undergone a significant transformation over the years, revolutionizing how we live, work, and interact with the world. However, one of the significant challenges that the industry is facing is the lack of diversity, especially when it comes to Black representation in tech jobs. The negative effects of this underrepresentation are far-reaching, impacting businesses, workers, and the economy.

Despite the steady growth of tech jobs over the past two decades, the technology workforce hasn't kept up with the changing demographics of the American workforce. While organizations have tried to improve representation among Black employees and executives in technology-related jobs across industries, there's still much work to be done.

According to a CompTIA report from 2022, Black individuals comprise only 8% of employees in tech jobs, despite representing 12% of the US workforce. Furthermore, just 3% of technology executives in the C-suite are Black, according to a McKinsey analysis of Fortune 500 executives. This gap is expected to widen over the next decade, with technology jobs such as data science, engineering, cybersecurity, and software development predicted to grow by 14% by 2032. However, the growth of Black tech talent in those roles is expected to be only 8% over the same period (Exhibit 1).

Exhibit 1

It is essential to note that the lack of diversity in tech jobs is not because Black individuals are less interested in or less capable of pursuing careers in technology. Research shows that Black students are just as interested in pursuing technology-related careers as their peers. However, they often face significantly more systemic barriers, such as lack of access to quality education and training, unconscious bias in the hiring process, and limited networking opportunities.

It is vital to address the lack of diversity in tech jobs and work towards building a more inclusive workforce. This can be achieved by making changes to education, recruiting, and retention initiatives, and by debunking the myths, falsehoods, and misconceptions that perpetuate the problem, and focusing on the true causes of these problems. 

Developing inclusive technologies and bridging a gap worth billions

The consequences of the underrepresentation of Black professionals in tech jobs are far-reaching. According to a McKinsey Institute analysis, if underrepresentation continues, Black households could lose over $350 billion in tech job wages by 2030. This is equivalent to one-tenth of the total wealth held by those households. Furthermore, the wage gap in tech jobs is expected to increase by nearly 37%, from $37.5 billion in 2023 to $51.3 billion in lost wages per year by 2030 (Exhibit 2).

Exhibit 2

Increasing Black representation in technology jobs is not only about narrowing the wage gap but also about improving the lives of those who often feel marginalized, disrespected and undervalued in workplaces where they may be the only Black person. It is also about creating inclusive technologies that have the potential to transform Black communities. 

For instance, AI-powered hiring platforms have recently become more popular, promising to simplify the recruitment process and minimize bias in hiring decisions. However, the impartiality of these systems depends on the data they use, and many have been found to reinforce existing prejudices in the recruitment process. A study by the National Bureau of Economic Research found that a large US retailer's AI-powered hiring platform was biased against women, as it penalized female candidates for using words like "women" and "female" on their resumes. To promote unbiased hiring, it is crucial to meticulously select the data used to train AI-powered hiring platforms and regularly check them for potential biases. Additionally, companies should integrate human oversight to identify and address any biases that may arise, as well as be transparent with candidates about how AI is being used in their  recruitment process. This involves having an honest, diverse team of recruiters and HR professionals who can recognize and correct any potential biases in the recruitment process. 

Businesses, non-profit organizations, and public-sector agencies must collaborate to increase Black representation in tech jobs. Specifically, they should rethink their approach at five crucial points throughout the career journey for Black tech talent by enhancing STEM education at the K-12 level, strengthening partnerships with HBCUs, expanding opportunities for alternatively skilled talent, replacing mentorship with sponsorship, and empowering Black leaders to thrive. By doing so, they can support the Black technology workforce for generations to come. It's vital to take coordinated action to increase Black representation in tech jobs and build a more diverse and inclusive workforce. This must be treated as a fundamental business and economic issue that requires urgent attention and robust solutions.

Empowering black leaders and STEM to thrive: 

According to a Pew Research Center report, only 7% of Black students earned a STEM bachelor's degree in 2018, compared to 10% of all bachelor's degrees. To tackle this issue, businesses and nonprofit organizations need to adopt a comprehensive approach that focuses on improving STEM education at the K–12 level. STEM education programs in K–12 schools can continue to act as potential feeders into the technology workforce, but it is essential to address the underrepresentation of Black students in STEM fields.

Having Black leaders in leadership positions is crucial to retaining and advancing Black professionals in tech jobs. This lack of role models in C-level positions has a significant impact on the aspirational career trajectories of Black professionals in tech at an early age. According to a report by the National Center for Women & Information Technology, Black professionals are severely underrepresented in tech leadership positions. Only 3% of tech executives are Black, and only 1% are Black women. 

To increase the representation of Black leaders in tech, businesses can implement policies such as diversity and inclusion training, leadership development programs, and employee resource groups. These initiatives can help create a more inclusive workplace culture that values diversity and fosters the growth of Black professionals in tech jobs. Businesses can establish mentorship and sponsorship programs that connect Black professionals with senior leaders who can provide guidance and support.

Finally, businesses can also work to eliminate bias in hiring and promotion processes. This can be done by implementing blind hiring practices, establishing objective performance metrics, and creating a culture of accountability for diversity and inclusion goals. Ignoring DEI initiatives harms companies. It can't be ignored or covered up. Ignorance will affect performance, no matter how many numbers are manipulated.

According to a study by McKinsey & Company, companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies in the fourth quartile. Similarly, companies in the top quartile for ethnic and cultural diversity on executive teams were 36% more likely to have above-average profitability than companies in the fourth quartile. Glassdoor found that 67% of job seekers said a diverse workforce is important when considering job offers, and 57% of employees believe that their company needs to be doing more to increase diversity (Exhibit 4). 

Exhibit 4.

These statistics demonstrate that prioritizing DEI initiatives can lead to better business outcomes and help attract and retain top talent. Ignoring DEI initiatives directly correlates with negative outcomes for the organization and its employees.

Therefore, companies should consciously prioritize DEI initiatives and ensure that they are integrated into every aspect of the organization. This will not only benefit the organization by improving performance, but it will also promote a more inclusive and welcoming work environment for all employees.

Strengthening HBCU Partnerships

Historically Black Colleges and Universities (HBCUs) have been a crucial source of Black graduates in the science, technology, engineering, and mathematics (STEM) fields. However, these institutions have long been underfunded, which has led to lower retention and graduation rates compared to other universities. 

Another way businesses can support HBCUs is by offering internships to students. This will provide students with the opportunity to learn about the tech industry and gain practical experience, which will increase their chances of securing employment after graduation. Businesses can also provide funding for scholarships, which can help reduce financial barriers for students and enable them to focus on their studies.

In addition, businesses can collaborate with HBCUs to develop relevant curricula that prepare students for the demands of the tech industry. This will help to ensure that students are equipped with the necessary skills and knowledge to succeed in the industry. By working together, HBCUs and businesses can ensure that Black students are well-positioned to succeed in tech careers, thereby increasing the pool of Black talent in the industry.

Expanding Opportunities for Alternatively Skilled Talent

Many Black professionals have skills that are transferable to tech jobs, such as project management, marketing, and customer service. By expanding recruitment efforts to include such professionals, businesses can increase the diversity of their workforce in tech jobs.

A study by McKinsey & Company found that companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians. This shows that diversifying the workforce positively impacts a company's bottom line. These programs can take many forms, such as boot camps, apprenticeships, and online courses. For example, Shtudy has partnered with IBM and offers both free upskilling and reskilling programs to help professionals transition to tech jobs. 

Investing in these programs creates career pathways for individuals who may not have traditional technology backgrounds but have the potential to contribute to the tech industry. This can lead to a more diverse and inclusive tech industry that benefits everyone.

Replacing Mentorship with Sponsorship

According to a study by the Center for Talent Innovation, employees with sponsors are more likely to be satisfied with their career advancement opportunities and earn higher salaries. The study also found that Black professionals are less likely to have sponsors than their white counterparts. Only 8% of Black professionals reported having a sponsor, compared to 19% of white professionals (Exhibit 5). 

Exhibit 5.

To address this disparity, companies need to take proactive steps to create opportunities for Black professionals to connect with sponsors who can help them navigate the politics of their organizations and provide access to leadership development opportunities. By doing so, companies can create a more diverse and inclusive workplace that values diversity and helps Black professionals thrive in their careers.