More Racial Diversity in Tech Industry Could Boost Bottom Line, Says Open MIC Report

A lack of racial diversity within technology companies could hurt their financial performance, Open MIC reported Wednesday. It said tech companies in the top 10 percent of racial and ethnic diversity are about two-thirds more likely to produce more revenue than those in the bottom 10 percent. "Similarly, companies that lack racial/ethnic diversity are about 20% more likely to fall short of median operating margins," said the nonprofit. “Given the growing social, political and economic influence of tech companies, the lack of diversity in the sector has implications that extend far beyond the industry itself,” said Executive Director Michael Connor in a news release. The report recommended tech companies measure their progress by collecting and disclosing data on race and gender, such as employees' functions, seniority, tenure, status, salary and other information. "Tech companies such as Amazon, Apple, Facebook and Microsoft have begun to disclose employee salaries, broken down by gender and sometimes but not always by race," the report said. Another recommendation is linking "time-bound goals" such as hiring and advancing women and minorities within organizations to leaders who are responsible for hitting those targets. Last year, Microsoft said it would tie executive bonuses to workforce diversity goals, and Pandora said it plans to increase percentage of U.S. employees of color to 45 percent by 2020, up from 35 percent, the report said. Open MIC said white executives, who hold a disproportionate power in tech companies, need to be fully committed to improving diversity and inclusion or those efforts will fall short.