To tackle systemic racism in the workplace, the change must start at the top

The tide has turned when it comes to fighting racial injustice in the workplace.  Corporations from all sectors are making new commitments to diversifying their teams, pledging funds for initiatives, and showing public support for Black Lives Matter.  But sadly, in some companies, diverse hiring, diverse spending are viewed as an act of charity, not a necessity.

For many years, corporations have paid lip service to diversity, even promising more transparency about the makeup of their teams.  But this has done nothing to move the needle – these commitments have been little more than virtue signaling.  And when companies do bring on diverse hires, they don’t create inclusive environments, suggesting these hires should be thankful they were allowed in and that no other accommodations will be made.  No CEO would dare admit that his or her company operates this way, given the fact that America is facing a reckoning over racism.  However, you can see the disregard for diversity reflected in their results.

Years of poor diversity results

In big business, equality has been a “nice to do” but not a “must-have”.  Of 3,000 companies reviewed by The New York Times, only 78 tied diversity goals to a chief executive’s pay.  This lack of accountability manifests itself in poor results.  At PVH Corp., the company that owns iconic brands like Calvin Klein and Tommy Hilfiger, only 18% of executives are minorities, and individuals with disabilities and LGBTQ employees rate the company poorly, contributing to its #83 ranking on Investopedia’s workplace diversity list.

In tech, where annual diversity reports have been released for more than 5 years, the number of Black employees at Apple, Facebook, Google, and Microsoft has remained stagnant.  6% of Apple’s employees were Black in 2014, and that number remained unchanged in 2018.

In place of meaningful action, companies are throwing money at the problem, further perpetuating the belief that equality is, quite literally, an act of charity.  Back to Apple, the company has created a $100 million Racial Equity and Justice Initiative focused on education, economic equality, and criminal justice reform, which is great, but perhaps it could start within its own walls.  What about creating apprenticeships and coding programs to build a pipeline from underserved communities to Apple’s HQ?

Equality as a mission-critical task

When executives view diversity as a supplemental project that isn’t crucial to the business’ success, there’s no real incentive to do better.  But truly improving diversity means treating equality as a mission-critical task.  These leaders must view equality with the same sense of urgency as a product launch.  Like a product launch, a diverse team can help companies succeed, boosting revenues by an average of 19% and helping them become more disruptive and innovative than their less diverse peers.  It should be enough to champion equality because it’s the right thing to do, but there’s also a business case for it.  Creating a more equitable workplace can only benefit companies, not hurt them.

We can see this play out at organizations like SAP, the number one company on Forbes’ 2020 list of the Best Employers for Diversity.  Among its many initiatives, SAP trains students at HBCUs to learn the latest SAP technologies, institutes a Cross-Generational Intelligence program to create an inclusive environment for workers of all ages, and continuously expands its Autism at Work program.  The company is working to ensure 30% of its management roles are filled by women by 2022, and it also signed the national Hispanic Promise, in which it committed to advancing and empowering Hispanic workers in the U.S.  And the results of this multi-pronged approach to equality?  Even during the pandemic, its first-quarter revenue was up 7% over the previous year.

Equality isn’t charity; it’s a necessary move in the playbook for modern business success.  Executives who fail to see that won’t just seem out of step with the moment – their companies will be left behind.