Longtime champions of diversity in the tech workplace, investors Mitch and Freada Kapor believe that workers from under-represented backgrounds provide a competitive edge.
Their experiences inform the questions they ask and the problems they identify that give rise to profitable, tech-driven solutions, the Kapors said at their company website, Kapor Capital.
Why people leave tech companies is the subject of a first-of-its-kind study from the Kapor Center for Social Impact and Harris Poll. Until now, there have been no representative studies of tech workplace cultures or what experiences drive employees out of the door, the study’s authors said.
The study concludes that workplaces drive away under-represented minorities and women when harassment, stereotyping and bullying occur. This hurts tech companies’ efforts to increase diversity. The price tag? An estimated $16 billion a year.
“The (2017 Tech Leavers Study) is an important first step in understanding how turnover and workplace culture contribute to the lack of diversity we are seeing in the tech industry,” Dr. Allison Scott, the study’s author and chief research officer at the Kapor Center, told USA Today in an interview.
All major tech companies track retention data, but they do not make it public. There’s been an outpouring of first-hand accounts of sexual harassment, gender discrimination, bullying and racial bias on blogs, social media and in lawsuits. These strongly suggest high rates of turnover among the very groups companies are struggling to keep as they try to change the demographics of their mostly white and Asian male staffs, USA Today reported.
Harris Poll conducted a survey of 2,006 U.S. tech employees who left their jobs in the past three years across the U.S. About half left a job in the tech industry while the other half worked in a tech job outside the tech industry including in construction, retail, finance and government.
About 78 percent of all survey respondents reported experiencing some form of unfair behavior or treatment, Mercury News reported. Employees in the tech industry said they were more likely to leave because of unfairness compared with tech workers in nontech industries, the study found.
According to the Tech Leavers Study, 37 percent of employees said they left their jobs because of unfairness.
Unfair behavior and treatment was the No. 1 reason given for leaving, respondents said — twice as likely as being recruited for a better opportunity.
The Kapor study is one of the first to turn its attention to a nationally representative sample of all groups, including groups that are underrepresented in tech such as women, blacks and Hispanics, USA Today reported.
The percentage of each demographic group that remains with a company each year could be the most telling data on gauging how inclusive a workplace is, diversity experts said:
Women, African Americans and Hispanics are underrepresented in all occupations within the tech sector when compared to the U.S. population and the private sector as a whole. Among the top-grossing tech companies such as Apple, Facebook and Google, black and Latino employees combined represent 3 percent to 5 percent of employees — numbers that have not budged in three years, Kapor Center found.
How those underrepresented groups are treated once inside these companies goes a long way toward explaining why tech companies can’t get their diversity numbers to budge, said Freada Kapor.
Tech giant Intel is one of the only tech companies that releases its retention data, according to USA Today.
Intel began focusing on retention after it realized underrepresented groups were leaving at higher rates. In February, Intel said it had reduced those rates, achieving a 15 percent exit rate for women and people of color compared to a 15.5 percent exit rate for white and Asian men and women.
The tech industry spends about $16 billion a year replacing employees who leave due to unfair treatment. Tech companies also risk their reputations, the study found.
Early investors in Uber, the Kapors wrote a letter in February to the ride-hailing company, criticizing it for failing to end a toxic culture of harassment, Reuters reported. Former Uber employee Susan Fowler described in a blog being sexually harassed by a manager. Human resources and upper management refused to punish the offender, and even threatened her with a bad performance review.
Ellen Pao unsuccessfully sued one of Silicon Valley’s most powerful venture capital firms in 2015 for gender discrimination. The lawsuit against Pao’s former employer, Kleiner Perkins Caufield & Byers, triggered a national debate on the treatment of women.
Everyone knew this sense of unfairness was prevalent in tech, especially for women and underrepresented people of color, Pao said.
Pao is now chief diversity and inclusion officer at the Kapor Center for Social Impact and a venture partner at Kapor Capital. “Now we have the data to understand the scale of these issues,” she said.
Unfairness drives turnover
Tech employees from all backgrounds cited unfairness more than any other factor as a key driver of their decision to leave.
Underrepresented men of color were most likely to leave due to unfairness (40 percent).
• Unfairness is most pronounced in the tech industry: employees in tech companies were significantly more likely to leave due to unfairness than technical employees in other industries (42 percent vs. 32 percent).
• Women of all backgrounds experienced and observed significantly more unfair treatment overall than men.Experiences differ dramatically across groups.
While employees from all backgrounds left due to unfairness, workplace experiences differ dramatically by race, gender, and sexual orientation.
• 78 percent of employees reported experiencing some form of unfair behavior or treatment. Women experienced or observed significantly more unfairness than men.Employees within tech companies experienced significantly more unfairness than employees in non-tech companies.
• Nearly one quarter of underrepresented men and women of color experienced stereotyping, twice the rate of white and Asian men and women. Almost one-third of underrepresented women of color were passed over for promotion–more than any other group.
• 1 in 10 women in tech reported experiencing unwanted sexual attention.Unfairness costs billions each year
• Using conservative estimates based on the percentage of tech employees leaving due to unfairness in this study, unfairness alone will cost tech companies $16 billion per year in employee replacement costs.
• There are also reputational costs to companies due to unfairness-related turnover. Thirty-five
percent of former employees said their experiences would make them less likely to refer others to seek a job at their former employer, and 25 percent said they would be less likely to recommend others to buy or use products and services from their former employer.Diversity and inclusion initiatives can reduce turnover
• Employees indicate that improving workplace culture can improve retention. 62 percent of all employees would have stayed if their company had taken steps to create a more positive and respectful work environment. 57 percent would have stayed if their company had taken steps to make the company culture more fair and inclusive.
• When 5 common diversity and inclusion initiatives are in place, unfair experiences are significantly lower, and employees are significantly less likely to leave due to feeling mistreated.
• Having all 5 initiatives implemented (a comprehensive diversity and inclusion strategy) provided a larger reduction in unfair experiences than any single initiative alone, indicating that one-off initiatives cannot take the place of a comprehensive strategy.What can companies do? 3 recommendations
1. Implement Comprehensive D&I Strategies. Develop and implement a diversity and inclusion strategy that starts with the CEO and executive team, is comprehensive, and implements multiple initiatives, measures the effectiveness of strategies, and allows for course-correct when needed.
2. Create Inclusive Cultures. Identify a set of core values, develop a code of conduct, and strive to create and continuously evaluate and improve the culture. Conduct employee surveys at regular intervals, examine data by each demographic group, provide transparency about culture issues and act upon the findings, addressing areas of concern.
3. Develop Effective and Fair Management Processes. Audit performance management and compensation practices for potential biases and implement management training and bias-mitigating strategies (including people operations technology tools) in all stages of the employment lifecycle.
