Corporate Leaders

Diversity officers are in demand across corporate America but are often underpaid

Key Points
  • Diversity officers across corporate America are under pressure to solve complicated, important and deeply sensitive issues related to race. 
  • While demand for diversity officers is rising, their success depends on a number of factors including their access to the boardroom and the C-suite. 
  • Financial compensation is another challenge faced by diversity executives.
VIDEO3:2503:25
Why chief diversity officer roles get paid less than other C-suite positions

Diversity officers across corporate America are under pressure to solve complicated, important and deeply sensitive issues related to race — all while trying to consult employees and help their C-suite manage any blunders of the past.

How do companies improve the diversity at the top? How do companies ensure executives aren't using bias when promoting individuals? How do managers create an inclusive environment for all people of color? These are the type of questions diversity officers are addressing at major firms, and time is ticking for action. 

"Often as a CDO [Chief Diversity Officer], you really have seven jobs in one. You're PR, most recently a pandemic specialist. My number one job has been 'counselor in chief,' not only for our agencies in our networks, but certainly my fellow colleagues in diversity, equity and inclusion," said Tiffany Warren, chief diversity officer at Omnicom Group, in an interview CNBC.

Financial compensation is another challenge faced by diversity executives.

Compiling data from 12 salary reports, Glassdoor found that the average salary for chief diversity officers is $127,239, which is less than the average pay of individuals who hold positions in the C-suite.

"I think in general, chief diversity officers are underpaid mainly because it's looked at as overhead and it's not looked at as a strategic position," Warren said. 

Warren said she is hopeful that as corporations prioritize diversity initiatives, more attention will be placed on equity and compensation of those individuals who help businesses drive these efforts.

While demand for diversity officers is rising, their success depends on a number of factors including their access to the boardroom and executives at the highest levels. 

"[CDOs] have to understand the strategy, they have to craft a strategy that aligns with the business and they need to partner with leaders across the firm. They also need to partner with the board so the board can help to really drive this across the firm," said Kara Helander, chief inclusion and diversity officer for The Carlyle Group. She also is a member of CNBC's Workforce Executive Council, a network of C-level HR and inclusion officers.

Jacqueline Welch, chief diversity officer at Freddie Mac, agrees.

"If you don't have that front line view of, 'OK, here's the business, here's what we're trying to accomplish,' likely you'll develop things in a vacuum that aren't value add," said Welch, who is also a member of CNBC's Workforce Executive Council.

Both Helander and Welch said they do have that direct line of communication into their respective CEOs, which allows them to fulfill their broader objectives around diversity.

Warren said she, too, reports to the CEO of Omnicom and regularly presents to the board.

"I'm very connected to the board of directors. I present to them, I talk to them," Warren said. "I'm included in many meetings. I do think that it's important for the CDO to have a seat at the table, not to be shown the table and then told they can't have that seat." 

Demand is rising for chief diversity officers across the U.S., with job postings for diversity and inclusion roles on Glassdoor up 55% since early June when the conversation around racial tensions — and corporate America's response —took center stage.

Major companies on the hunt for a CDO include Illumina, Levi Strauss, Silicon Valley Bank, among others, according to a review of LinkedIn and Glassdoor listings.

Industry experts caution not to put too much emphasis on a company's hiring of a CDO and instead track their progress in promoting people of color to senior management roles and address race-related issues.

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Here's how Levi Strauss is promoting diversity within the company