Closing the tech gender gap through philanthropy and corporate social responsibility

Here is a brief excerpt from an article written by Michael Conway, Kweilin Ellingrud, Tracy Nowski, and Renee Wittemyer for the McKinsey Quarterly, published by McKinsey & Company. To read the complete article, check out other resources, learn more about the firm, obtain subscription information, and register to receive email alerts, please click here.

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The US tech sector isn’t doing enough to build pathways into tech for women—particularly women of color. What is behind this gender gap, and what can tech companies do about it?

It is hardly news that women—particularly women of color—are chronically underrepresented in the US tech sector. Perhaps more alarming is that the trend is headed in the wrong direction. The percentage of computing roles women hold has largely declined in the United States over the past 25 years.

The situation is even more grave for underrepresented women of color: black, Latina, and Native American women.

To help more women prepare for careers in the tech industry, McKinsey collaborated with Pivotal Ventures, an investment and incubation company created by Melinda Gates, on a comprehensive study to examine how tech-company philanthropy and corporate social responsibility (CSR) investments can improve the gender diversity of the tech pipeline. This report, Rebooting representation: Using CSR and philanthropy to close the gender gap in tech, offers a detailed analysis of the current state of the tech sector’s gender gap, as well as practical guidance for tech companies interested in increasing the diversity of the tech pipeline.

A lack of gender diversity carries with it a major opportunity cost, both for individual tech companies and the entire sector. Diverse teams, including those with greater gender diversity, are on average more creative, innovative, and, ultimately, are associated with greater profitability. This strong positive correlation between higher levels of employee diversity and stronger financial performance has been demonstrated consistently across sectors and geographies, and tech is no different. Plus, tech companies’ recent public struggles on gender-related issues have demonstrated there are real, immediate costs that result from a lack of inclusion and diversity—lost stock value, lower market share, HR costs, and public relations costs, among others.

There is no question that the tech sector can help create a brighter future for women and girls in computing. Through a survey of 32 leading tech companies representing nearly $500 billion in revenues and slightly more than $500 million in philanthropic giving in 2017, as well as extensive interviews with approximately 40 tech-company leaders, we found evidence of why, exactly, current philanthropic and CSR efforts are falling short. Tech company action today will create opportunities for women to lead innovation tomorrow.

Women in computing today

The lack of diversity in the US tech sector is not a recent phenomenon; it has been a significant and consistent challenge for tech companies for many years. From tech start-ups to Fortune 500 industry anchors, tech companies of all sizes recognize that their workforce continues to draw mainly from a small segment of the talent pool—predominantly white and Asian men from elite educational institutions. Drawing from a narrow talent pool leaves money, innovative ideas, and star employees on the table—and potentially exposes organizations to criticism and reputational risk.

To understand the magnitude of the problem, consider the fact that women comprise just 23 percent of high school Advanced Placement computer-science exam takers, 19 percent of bachelor’s computer and information science degree recipients, and 26 percent of the computing workforce (Exhibit 1). The situation is worse for underrepresented women of color: despite accounting for approximately 16 percent of the general population , women of color comprise only around 4 percent of technical roles in tech companies and are almost completely absent at the senior leadership level, with zero black or Latina women CEOs of Fortune 500 tech companies. While men of color are also excluded from tech, they participate at almost three times the rate of women of color.

Girls and women are underrepresented across the board in computing.

And things are getting worse, not better: the share of black, Latina, and Native American women receiving computing degrees has dropped by 40 percent over the past decade, to 4 percent, from 7 percent (Exhibit 2). If this trend continues, the number of underrepresented women of color receiving computing degrees will not double over today’s numbers until 2052—by which time they will represent a vanishingly small proportion of all graduates.

Black, Latina, and Native American women are a low and declining percentage of computing degree recipients.

The tech sector needs to innovate to expand its technical workforce—and quickly. According to a recent McKinsey Global Institute discussion paper, demand for advanced IT and programming skills will grow by as much as 90 percent over the next 15 years. Business leaders across sectors are already reporting an expected tech skills shortage in their companies within the next three years. And the competition for technical talent is about to become much fiercer across industries as companies of all types grow their technical capabilities. To stay ahead, the tech sector needs to expand its talent pool rapidly by investing in and attracting historically underutilized talent, notably women.

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Here is a direct link to the complete article.



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