Etsy CEO Josh Silverman says it's tackling one of the tech industry's most stubborn problems — hiring and promoting more women

  • Etsy CEO Josh Silverman said his company has made hiring and promoting more women a key focus of the online retailer.
  • The diversity efforts by Etsy are bucking the trend on one of the industry's most stubborn problems.
  • The focus on diversity is key for Etsy, as 87 percent of its 2 million sellers around the globe are women, as are the vast majority of its nearly 36 million buyers.

Big technology companies from Apple to Google and Facebook have all in recent years made public reports on diversity within their ranks as a way to increase transparency. But Etsy, a smaller but powerful force in e-commerce, is making impressive strides in its effort to hire and promote more women — bucking the trend on one of the industry's most stubborn problems.

On the heels of a mixed second-quarter earnings report in which the handmade goods e-commerce site beat revenue expectations and raised its guidance for gross merchandise sales, Etsy also released its latest impact report, "Creativity Unleashed." Etsy reports that 55 percent of its employees are women, as are nearly two-thirds of its management team. The company also has achieved gender parity on its board.

What's more, 32 percent of the company's engineers are women, up from 29 percent in 2017. Comparatively, at Facebook and Google, women represented 22 percent and 21 percent of workers in technical roles, respectively, last year. Through the end of 2017, Etsy had 744 employees.

"For Etsy, more than half of our leaders are women, so statistically speaking, at least half of the people getting promoted should be women," CEO Josh Silverman said in an interview Tuesday on CNBC's "Squawk Box." "So we think we have amazing female leaders in the company and we've really focused on the discipline around performance management to make sure it's objective and performance-based."

The focus on diversity is key for Etsy, as 87 percent of its 2 million sellers around the globe are women, as are the vast majority of its nearly 36 million buyers.

"Having a team that represents the sellers and buyers is really important for us to achieve our business objectives," Silverman told CNBC. "When you have more diversity of opinion, you end up getting better outcomes."

Silverman acknowledged more needs to be done to improve diversity in the engineering pipeline, in particular, starting at a young age. Jennifer Clevenger, engineer and senior manager at Etsy, has spent her entire career in tech and says she notices the difference in working in a company with a key focus on inclusion.

"I have never worked anywhere before where there was such a focus on diversity and trying to make sure the work experience is good for everyone, not just a certain population of people," Clevenger said. "It's not something you can create out of thin air, and it's not something that comes from somebody in senior leadership saying, 'Hey, today or this year we are going to really focus on diversity.' It's something that is organic and has been created over time."

While Etsy's stock has more than doubled year to date, the site isn't immune to competition from Amazon to eBay. Silverman said Etsy isn't trying to compete on speed, but on personalization from its sellers — adding that he believes it's what sets the company apart.

"Amazon is great at selling you all the commodities of life, and who hasn't been on Amazon three or four times in the past week? But in the sea of sameness, sometimes you want to buy something special. You want it to feel special, you want it to express yourself, you want it to come with a story, you want to buy it from another human being. Etsy is about keeping commerce human," Silverman said.

Watch: 'It's a business imperative to have strong female representation'