The problem with corporate DEI

Here at Workplace, we devote a lot of energy to detailing the diversity commitments — and failings — of tech companies. We diligently record every moment of tiny, incremental progress: One more percentage point of Black engineers, one more percentage point increase of women in leadership, finally one woman of color in the c-suite. Following commitments from leaders at companies such as Amazon and Apple, over time we've seen that the numbers have changed just a little.

But honestly, these commitments haven’t mattered for the majority of the American workforce. I’ve dedicated most of my reporting time to the unseen labor that powers the wealth and dominance of the tech industry. And I’ve always felt a little unsettled by the fact that we interview the DEI leaders and we write about commitments and we celebrate the little achievements, but when we stop for the day, the massive workforce powering this whole machine is still the same — still contract workers, still economically stagnant, still moving from one job to the next every couple of years, and still primarily non-white.

McKinsey finally has the receipts for this. “Three in four frontline workers want to be promoted, but less than one in four achieves it.” That’s the line that opens a report, released July 30, that shows corporate diversity and inclusion policies, while causing incremental progress in representation at the upper levels, are failing to create true, measurable economic mobility for the majority of the American workforce.

While nearly two-thirds of corporate workers believe DEI policies and programs are effective, barely half of all hourly frontline workers believe the same, according to the new McKinsey survey data.

The data also shows that workers of color are overrepresented in a number of frontline roles, including jobs such as security guards and light-truck driving. Those roles have pathways to promotion with higher-paying jobs — but even in the areas where people of color are overrepresented, those workers are not promoted to those pathways. Instead, white workers get the promotion most of the time, if anyone is lucky enough to get it at all.

The McKinsey report identifies three myths that prevent change in this area: Workers can move up the corporate ladder if they want, workers don’t have the skills for higher-paying jobs, and high turnover is just fait accompli for frontline workers. Their report finds the opposite for all three of these ideas: 1) Workers want to be promoted but rarely achieve it, 2) the skills necessary for promotion are usually soft, interpersonal skills, not unachievable technical ones, and 3) turnover exists because workers don’t get investments or promotions.

“Companies that truly invest in the front line can make these roles a starting point for a fruitful career, a clear path to the middle class, and a way to transition to interesting new jobs across industries,” the report’s authors write in its conclusion.

Affirmative action

Big Tech is trying to save college affirmative action. A slew of tech companies, including Meta, Google and Apple, filed a brief with the U.S. Supreme Court on Monday signaling support for affirmative action programs at Harvard.

Nearly 70 companies signed onto the brief, including Adobe, Airbnb, Lyft, Uber, Salesforce and many others. The companies argue that the capacity of universities to admit racially and ethnically diverse student bodies is extremely relevant to them, as universities serve as large talent pools. Corporate DEI efforts depend on "university admissions programs that lead to graduates educated in racially and ethnically diverse environments," the brief states.

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Connecting across class

A landmark study released in Nature on Tuesday examines a little-studied path out of poverty: making rich friends. The study analyzed data from 21 billion Facebook friendships, which adds up to 84% of U.S. adults aged 25 to 44. Researchers looked at economic connectedness (the level of cross-class friendships), cohesiveness (how clique-ish social networks are) and civic engagement. Here are some of the study’s key findings:

• Children who grow up in communities with more economic interconnectedness are more likely to move out of poverty. If a child with low-income parents grew up with a number of wealthy friends compared to a child with high-income parents, it would increase their future salary by 20%.
• Economic connectedness proved to be the most impactful factor when it comes to upward mobility, outshining income inequality, racial segregation and school quality.
• Still, higher-income people tend to have higher-income friends, and vice versa. This is due to lack of exposure to people with different income levels in schools or other parts of the community and bias in making friendships.

Some personnel news

Anyone else having a bad case of Great Resignation whiplash? It’s hard to keep up with which tech companies are growing, shrinking, floating or sinking. We’re here to help.

↓ Toronto-based ecommerce financier Clearco cut 125 employees, or a quarter of its staff, as it tried to correct for expanding too quickly.

↓ New York-based real estate tech company Ribbon laid off 136 employees, or nearly 40% of its workforce. Its CEO, Shaival Shah, said the company is adapting to a “very significant shift in the market.”

↓ Several food tech startups had layoffs last week. Imperfect Foods cut 50 jobs and shut down a San Francisco warehouse; Shelf Engine, which streamlines processes for grocery stores, laid off 43 employees; and Chinese online grocery company MissFresh stopped offering deliveries and has started to cut the majority of its staff.

For more news on hiring, firing and rewiring, see our tech company tracker.

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