Is Tech Sector Diversity Improving?

Introduction

The study explores disparate diversity trends in the American Tech industry. While the industry boasts some of the highest paying salaries across the country’s economic sectors, the highest paying occupations are not equally distributed across demographic attributes. When isolating gender and ethnicity, analyses show disparate employment trends in executive, managerial, and professional levels in the Tech sector. This study explores the slow increases in gender and ethnic diversity in the Tech sector, which fall behind shifts in the labor force at large. The white male-dominated industry has attempted to improve its diversity efforts, but their solutions are typically ineffective and reluctantly enforced. The study was conducted through the Center for Employment Equity at the University of Massachusetts Amherst by sociologists JooHee Han nd Donald Tomaskovic-Devey. Dr. Tomaskovic-Devey studies the processes that generate workplace inequality and Dr. Han specializes in social inequalities and population dynamics at the University of Oslo. 

Methods and FindinGS

This study examines changes in diversity trends across three employment categories: executive (top leadership ranks responsible for diversity and financial returns), managerial (implement policy and task coordination), and professional (core technical production including scientists, engineers, etc.). While the industry at large is experiencing rapid growth, this growth does not align with consistently upward trajectories for racially and ethnically diverse individuals across all employment categories. The authors observe Tech firms across the largest 10 of fifty-five federally recognized Tech-related industry codes. Utilizing time-series data, the researchers first compare the percentage of demographic attributes in executive, managerial, and professional roles for the top five demographic categories employed: white men/women, Asian men/women, and Black men.

The data show that white men maintain the predominant makeup of all three occupational categories in 2008: 

• Professionals: 47.4%
• Managers: 56.2%
• Executives: 71.6%

Although a steady decline in the white male share of employment is notable in 2016: 

• Professionals: 43.4% (-4%)
• Managers: 50.8% (-5.4%)
• Executives: 65.8% (-5.8%)

The four remaining demographic profiles indicated very minor increases in each occupational category – at most, a 2% increase over the 8-year period. The authors compare these percentage changes to the overall labor force at large to indicate that the Tech sector exhibits meager progress in employment diversity respective to demographic shifts in the population at large.

At the professional level, the authors identified the following key trends:

• Individual firms falling behind the tech sector diversity growth rate are more likely to maintain homogeneously Asian or white male employment compositions
• In rapidly expanding firms, Asians and women are hired into newly created jobs at higher rates than other demographic groups

At the executive level, the authors identified the similar trends:  

• Employment growth in executive ranks (alongside firm growth) is strongly associated with increased executive diversity. This may suggest that the addition of new executive positions offers space for increasing executive diversity
• Due to the limited number of executive positions across firms, each rapidly expanding firm added, on average, only one or two diverse executives; thus the authors cannot determine whether their contributions improve firm innovation and productivity. 

At the managerial level, however, the authors identified disparate trends:

• The number of new management jobs is high in both firms with rapidly increasing and rapidly decreasing diversity; expanding managerial ranks can be associated with both positive and negative diversity trends
• Rapid managerial job expansion can either consolidate white male dominance or expand it

The authors further measure employment growth at large against growth in each of the specified demographic categories. They find that while all firms show upward employment growth, the growth rates differ substantially across each demographic attribute. These firms were subsequently parsed by their diversity growth rates – strongly decreasing (-.1%), slow growth (17.9%), and rapidly increasing (32.1%) – to measure how changes in each occupational category corresponded with changes in the other occupational categories.

• Across all three growth categories, an increase in executive jobs is associated with an increase in executive diversity.
• In contrast, an increase in managerial jobs corresponds with both rapidly increasing and rapidly decreasing firm diversity. 
• A third critical trend is that firms with increases in both executive and managerial diversity also demonstrate increases in professional diversity.

Conclusions

While latent research has indicated that increases in diversity correspond with increases in firm growth, the authors postulate which attribute precedes the other. Is it true that more prosperous firms have a greater capacity to diversify their managerial, executive, and professional employment categories, or do diversity measures increase firm prosperity? The authors postulate that the causal pattern emerges both ways – yet the most critical finding of the study is that any diversity gains in Tech diversity are much weaker than demographic shifts in the labor market at large. The disparate diversity trends among firms indicate a key tradeoff between demographic attributes: as white male dominated numbers decrease, white females tend to be employed the most – this may be at the detriment of other demographic attributes. 

While these tradeoffs are a pertinent and latent area of study, the key to improving demographic diversity in all occupational categories is by improving executive diversity.

Multiple indicators identified by the authors suggest that executive diversity is most frequently increased in response to political pressures. The authors conclude that the expansion of executive and managerial diversity can trickle down and substantially change the demographic composition of the professional labor force. Their optimism lies on the fact that although the Tech sector at large has made unsubstantial progress toward diversifying its demographic attributes, some individual firms have exceeded the industry substantially. A close analysis of these firms will help to identify processes to improve firm diversity at all three occupational levels and reciprocate these processes across the industry at large.