As the movement for racial equality after the death of George Floyd leads to an awakening within the corporate sector few saw coming just weeks ago, CEOs of major companies have been told they need to do more than just issue statements of support or make charitable contributions if they want to make a difference. Looking within their own house is a good place to start, former Senior Obama White House Advisor Valerie Jarrett recently told CNBC.
VMware CEO Pat Gelsinger is making one move within his company to reflect its own need to create a more diverse workplace. Speaking at a CNBC @Work virtual Spotlight on Thursday, Gelsinger said the $63 billion software company has updated its diversity policy in hiring as a result of recent events.
Previously, the company had in place a rule that no hiring process could be complete unless a woman or person of color was interviewed. Now the company will require hiring managers to consider at least one candidate from both backgrounds.
"Now we're saying every position has to consider gender and race," Gelsinger said.
He said this policy update does not ensure a diverse candidate will be the one chosen for the job. Gelsinger also indicated race should be a factor in internship program decisions, saying companies need to bring in a lot more candidates from Black and underrepresented communities and make that a "much more conscious focus of intern programs."
Elaborating on Gelsinger's comments made at the CNBC virtual event, a VMware spokesman told CNBC via email that prior to the recent events, the company required that a woman or an underrepresented minority be included as part of the interview slate. "And we're moving towards a woman AND an underrepresented minority as part of each hiring campaign," he said.
VMware discloses a diversity report annually. In fiscal year 2020, all vice presidents and above were assigned a D&I (diversity & inclusion) goal to improve the representation of women globally and improve representation of U.S. underrepresented minorities.
In its most recent annual diversity report, VMware disclosed that 3.2% of its workforce was Black, up from 3% the previous year and 2.7% in 2018. However, Black representation within the company is low compared to other ethnic groups and gender representation. Women comprise over 25% of the company's workers. By race/ethnicity, White workers comprise 57% of the company; Asian workers over 31% and Hispanic workers nearly double African American peers, at 5.8% of VMware's workers.
Currently, 1.5% of leadership roles at the company are held by Black employees; a little under 4% by Hispanic workers; 26% by Asian workers; 67% by White employees.
"We've focused lots more on gender than race, and now we need to put emphasis on those areas together," Gelsinger said at the CNBC event.
The percentage of White workers among all employees and in leadership positions at VMware has increased more in recent years than Black employee representation, according to its most recent diversity report.
VMware is far from alone in having work to do on Black representation in its workforce and in making a focus on racial diversity as high-profile as gender efforts, according to Mercer's Gail Greenfield, a principal in the consulting firm's Washington, D.C., office who specializes in pay equity. Greenfield said her work with corporate clients over the years indicates that gender has been more of a focus than race, but that is changing quickly.
"I'm getting far more inquiries than I ever have about this topic," Greenfield said. "They are definitely focusing on diversity broadly, but specifically mentioning racial diversity and Black employees and racism. It's definitely coming up in requests from clients that I didn't see a month ago."
Similar to VMware's small gains in hiring Black candidates, Facebook, for example, has gone from a workforce that's 3% Black to 3.8% in the past six years. Others also are in the low single digits.
Greenfield said the technology sector has had a focus on diversity over the past decade, but she described that focus as often reactive rather than proactive. Government contractors with 50 employees or more are required to provide demographic information on their workforce, and social investors have pressured them as well.
"Now I think it has evolved to the point where more companies are doing it not because it is requested or coerced but because they want to use it as a way to commit to diversity and inclusion," Greenfield said.
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