Oct 13, 2021
The tech industry has been seen as a laggard in its approach to diversity and inclusion. The pandemic may prove to be the catalyst that will help change this perception. With remote work having become a necessity and widely accepted, employers now have the opportunity to recruit from anywhere. This opens the door to a more diverse pool of applicants, which should help to grow the pipeline of future leaders from minority and underrepresented groups.
Up until now, tech companies in the U.S. have been confined in their recruitment by geography. According to a report by Bloomberg, the Bay Area and the Boston-New York-Washington corridor account for roughly two thirds of all venture capital-backed investments across the U.S. The Brookings Institution reports that just five top innovation metro areas – Boston, San Francisco, San Jose, Seattle, and San Diego – accounted for more than 90% of the nation’s innovation-sector growth during the years 2005 to 2017.
In Canada, the four largest tech markets are Toronto, Montreal, Vancouver and Ottawa, each with labour pools of more than 50,000 workers, according to CBRE's 2020 Scoring Canadian Tech Talent [PDF] report. Calgary, Quebec City and Edmonton are mid-sized markets, with a labour pool of between 25,000 and 50,000. Nationally, the number of tech positions has grown by 22.5% over the last five years.
Even if the tech companies go beyond these locations to hire talent, it is harder to convince recruits from a different part of the country – especially those from underrepresented communities – to move. Their social networks and support systems are elsewhere, and the concentration of tech workers drives up the cost of living in cluster locations, such as the Bay Area, Boston or Vancouver.
The virtual work environment is making geography less of an issue in terms of diverse recruitment. Canada’s Shopify, for example, promotes working from anywhere and hiring from afar. On its website, the company advertises that, where it has an entity where a hire is legally entitled to work, that worker can be employed directly. In all other countries, the worker may be able to be hired as a contractor.
Trends since 2015
Osler’s survey results from 2015 through to 2021 indicate that, despite a marked increase over the years – from 10% in 2015 to 19% in 2021 – women continue to be underrepresented on technology company boards.
Progress has occurred in the C-suite. Our results indicate that the percentage of women holding executive officer positions at technology companies has increased from 9.7% in 2015 to 18% in 2021.
Increased representation from women and minority groups in the industry has been negligible over the last six years. According to CNBC, Facebook went from a workforce that was 3% Black to 3.8% over a six year period. A 2019 study [PDF] by the the Brookfield Institute for Innovation + Entrepreneurship found that only 2.6% of the Canadian technical workforce was Black.
According to DreamHost’s The State of Women in Tech 2020 report, only 26% of computing jobs in the U.S. are held by women, and the turnover rate is more than twice as high for women than it is for men in the tech industry. In 2018 female founders brought in just 2.2% of U.S. venture capital dollars, according to financial data and software company PitchBook. It did not help that less than 10% of decisionmakers in venture capital firms were women.
According to the Silicon Valley Bank’s 2020 Women in US Technology Leadership Report, [PDF] only 14% of U.S. start-ups have a female CEO, and most of these are at companies with founding teams that include at least one woman The report showed that 41% of U.S. tech start-ups had at least one woman in a C-suite executive role and 37% had at least one woman in a board of director role. These percentages are down from the 2019 report which showed the percentages to be 56% and 40% respectively.
Latest diversity numbers
Osler’s 2021 Diversity Disclosure Practices: Diversity and leadership at Canadian public companies [PDF] report shows that 19% of directors at technology companies in 2021 were women, (up from 17% in 2020), compared to 22% for TSX-listed companies as a whole. On a per-board basis, the number of women directors was 1.42, versus 1.83 women directors per board for TSX-listed companies overall.
Breakdown of number and percentages of women directors in 2021
Breakdown of number and percentages of women executive officers in 2021
Best practices and sector leaders
Big Tech has stepped forward in the past year to renew its commitment to diversity and inclusion. In 2020 Amazon announced plans to double representation of Black VPs and directors over a two-year period. Facebook this year has committed to spending $1 billion annually on diverse suppliers, along with another $100 million going towards Black-owned businesses. Google has pledged to improve Black representation at senior levels and has committed to increasing the representation of underrepresented groups by 30% by 2025. Microsoft is investing an additional $150 million into diversity and inclusion while committing to doubling the number of Black managers, senior leaders and senior individual contributors by 2025. In January, Apple launched a global innovation and learning hub for historically Black colleges and universities and is now providing venture capital funding for Black and Brown entrepreneurs.
In Canada in 2019, business start-up incubator DMZ at Ryerson University created a Black Innovation Fellowship, an incubator program that provides future Black tech leaders with programming workshops, mentorships, and networking opportunities. DMZ has increased the Fellowship’s Funding goal by $1 million and, with this amount, hopes to serve five times the number of participants than currently.
In the U.S. in 2016, Backstage Capital was formed and has provided capital for more than 170 companies led by underrepresented founders. Another U.S. non-profit, Project Include, is working with a few companies at a time to foster diversity in an inclusive and accountable way. This organization focuses on small to mid-stage startups which have CEOs committed to making their companies inclusive.
Also in Canada, leaders in the tech and innovative sectors have launched the Coalition of Innovative Leaders Against Racism (CILAR), an initiative that aims to dismantle systemic racism and create opportunities for Blacks, Indigenous peoples and persons of colour.
The Alliance for Global Inclusion was launched in April by several companies, including Dell, Intel and Snap Inc., with the pledge to advance diversity and inclusion in the workplace, as well as sharing metrics on initiatives geared at tackling gender and race disparities. Earlier this year the influential Silicon Valley Leadership Group, whose members number in the hundreds and which includes Big Tech, has challenged its member companies to fill 25% of their executive positions with underrepresented groups by 2025.
Facebook and Google recently opened offices in Atlanta, a city outside the traditional U.S. tech cluster which has sizeable numbers of tech workers and in a state which provides a more affordable cost of living than other cluster states. This represents an opportunity for Facebook and Google to establish recruiting strategies to diversity their workforces.
With Big Tech’s renewed commitment, and with improvements to the number of women on boards and executive officer positions, the future for diversity and inclusion in the tech industry looks better than it did even just a few years ago.