Oct 13, 2022
This resource has been updated with information from our 2022 Diversity Disclosure Practices: Diversity and leadership at Canadian public companies report.
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. As CBRE reports, almost a quarter of all tech job postings now are for remote positions. 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.
Familiar obstacles
Up until now, tech companies in the U.S. have been confined in their recruitment by geography. According to Crunchbase, almost three-quarters of the country's venture funding in 2020 went to California, New York and Massachusetts, the historic bastions of the American startup ecosystem. 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. Those traditional superstar cities continued to dominate the market during the pandemic years, but recent data suggests modest decentralization toward smaller metropolitan areas.
In Canada, the three largest tech markets are Toronto, Vancouver and Montréal, each with labour pools of more than 100,000 workers, according to CBRE's 2022 Scoring Canadian Tech Talent report. Ottawa, with over 80,000, isn't much smaller. Calgary, Québec 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 more than 20% over the last five years, according to the Computing Technhology Industry Association's State of the Tech Workforce Canada report. Toronto added 88,900 of those positions, more than any other city in North America over that period.
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 its "Digital by Design" policy, allowing employees to work remotely on a permanent basis.
But organizations still committed to in-person operations are also looking further out for talent. The Brookings Institution reports that major tech firms like Palantir, Hewlett Packard Enterprise, Oracle and Tesla relocated their headquarters from the Bay Area to locations like Austin and Denver since the start of the pandemic. Google and Apple, meanwhile, announced satellite offices in North Carolina, pointing to some decentralization of a sector that until recently was so geographically concentrated. And as venture capital firm Revolution and Pitchbook show in their joint Beyond Silicon Valley report, the money is following suit: in 2021, U.S. venture capital firms outside of the Bay Area, New York and Boston raised over $21 billion in 2021, up from just $3 billion a decade earlier.
Of course, whether any of these opportunities translate into increased diversity in the tech sector overall remains to be seen. In Canada, the percentage of women in the tech workforce has stalled below 30% for the last decade, according to the Information and Communications Technology Council’s “Gender Equity in Canada’s Tech Ecosystem: Attracting, Retaining, and Supporting Entry- and Mid-Level Talent” report. Such low representation is typical among international markets, too. Despite growing awareness of these disparities, the sector clearly still has a long way to go.
Trends since 2015
Osler’s survey results from 2015 through to 2022 indicate that, despite a marked increase over the years — from 10% in 2015 to 23% in 2022 — 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 20% in 2022.
Increased representation from women and minority groups in the industry has been slow over the last six years. According to its own annual diversity report [PDF], Meta-owned social platform Facebook went from a workforce that was 3% Black to 4.4% over a five-year period. A 2019 study [PDF] by 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 2022 report, only 24% of computing jobs in the U.S. are held by women — two percentage points lower than just two years earlier — and the turnover rate is more than twice as high for women than it is for men in the tech industry. In 2019, the report states, women-led companies brought in just 2.8% of U.S. venture capital dollars invested in startups. It does not help that less than 15% of decision-makers in venture capital firms are women, with 61% of firms having no women decision-makes at all.
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 [PDF] which showed the percentages to be 56% and 40% respectively.
Latest diversity numbers
Osler’s 2022 Diversity Disclosure Practices: Diversity and leadership at Canadian public companies report shows that 23% of directors at technology companies in 2022 were women, (up from 19% in 2021), compared to 25% for TSX-listed companies as a whole. On a per-board basis, the number of women directors was 1.8, versus 2.05 women directors per board for TSX-listed companies overall.
Breakdown of number and percentages of women directors in 2022
Breakdown of number and percentages of women executive officers in 2022
Best practices and sector leaders
Big Tech has stepped forward in the past few years 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, a goal toward which it has made modest progress so far. Meta 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 2021, 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 Toronto Metropolitan 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., Backstage Capital was formed in 2016 and has since provided capital for more than 200 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 the Black Community, Indigenous peoples and persons of colour.
Global comparison
The Alliance for Global Inclusion was launched in 2021 by several companies, including Dell, Intel and Snap Inc., with the pledge to advance diversity and inclusion in the workplace, as well as to share metrics on initiatives geared at tackling gender and race disparities. Last 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.