The global tech industry has been valued at an astonishing $5.2 trillion, yet despite being a hotbed for innovation and significant technological advancements, there is still an eye-watering disparity in racial diversity. According to a report by McKinsey analysis of Fortune 500 executives only 3% identify as black and account for 8% of tech jobs overall.
According to the McKinsey Institute for Black Economic Mobility analysis ‘Black households stand to lose out on more than a cumulative $350 billion in tech job wages by 2030, an amount equal to one-tenth the total wealth held by those households'.
Meanwhile the salary gap is predicted to increase by over a third from $37.5 billion in 2023 to $51.3 billion in lost wages by 2030, according to their analysis.
Vicky Sleight, executive vice president, cultural transformation, believes the report sheds much-needed light on a critical issue within the tech industry - the persistent gap in representation for black talent despite advancements in workplace diversity. “Despite the global tech industry's remarkable growth and innovation, the staggering lack of racial diversity remains a pressing concern.
“It also highlights the systemic barriers and inequities that continue to hinder the advancement of Black professionals in the tech sector. While strides have been made in promoting diversity and inclusion initiatives, it's evident that much more needs to be done to address the underlying structural issues that perpetuate this disparity.
“As we explore why the gap persists, it's essential to examine the root causes, including systemic racism, unconscious bias, and limited access to opportunities for Black individuals. By acknowledging these challenges and actively working to dismantle them, the tech industry can move closer to realising its full potential as a truly diverse and inclusive ecosystem.”
Diversity boosts innovation
Whilst the US boasts almost three times the amount of tech start-ups, black entrepreneurs receive a small fraction of the total investment pool – around 2% of venture capital (VC) funding according to a CNBC report.
John Imah, CEO of SpreeAI believes that building diverse teams and the inclusion of various perspectives naturally leads to more well-rounded and effective outcomes, by challenging the status quo, pushing boundaries, and fostering an environment where innovation thrives and is likely to be more reflective of the customer base.
“Diversity in teams is akin to having a multi-lens camera at your disposal when trying to capture a complex landscape. Each lens offers a unique perspective, ensuring no detail is overlooked.
“In decision-making, this translates to a richer pool of ideas, experiences, and viewpoints, enabling a more holistic approach to problem-solving.
“Imagine discussing a new product launch or a marketing strategy; a team that mirrors the diversity of your customer base is more likely to identify opportunities and pitfalls that a more homogeneous group might miss. This diversity of thought is the secret sauce that can turn good decisions into great ones, ensuring that strategies are not just effective but also equitable and inclusive.”
So how do we foster change?
It’s no secret that accessing STEM education is a privilege, and a costly one at that. Data from the US Department of Education indicates that less than 10 percent of STEM degrees were awarded to black students, a figure that has barely increased in 10 years.
Meanwhile a report called ‘Exploring the educational experiences of black and Hispanic students in STEM’ found that over 80% of black and Hispanic students who graduated with a PHD in STEM incurred upwards of $40,000 in student loans. A statistic not mirrored in their white peers, only 6% acquired a similar level of debt.
Black recipients of a PHD were also more likely to have obtained their qualification at degree granting institution.
A lack of visibility of black role models and high achievers in the STEM industry is also considered a huge blocker. The PEW Research Centre highlights that almost three quarters of black adults with a postgraduate, or college degree, believe greater visibility of black high achievers in STEM fields would encourage more students to follow in their footsteps.
This statistic is mirrored in representation at a school level too, with almost half of the people surveyed stating they would be more likely to study STEM post high school if they had a black high school teacher in these subjects.
Attracting and retaining talent
Closing the black talent gap in tech also requires an acute focus on how to attract and retain that talent in STEM roles. The value placed on educational performance can act as a blocker to a diverse talent. Less than 30 percent of black workers hold a Bachelor degree and with a significant number of entry level tech jobs requiring one, the pool of diverse talent is already at a disadvantage. However by placing value on transferable skills as opposed to educational merit can help redress the balance.
Lee Walker, managing director of Expand Group says, “Recruiting for a skill set rather than a specific educational attainment will naturally expand the applicant pool. The benefit of hiring for transferable skills supported by training is a more diverse workforce that better reflects businesses customer base and today’s society. Businesses with diverse leadership are proven to perform better than those without.
“We have spent the last few years educating clients on the benefits of recruiting for talent, personal traits and life experience over an educational milestone.”
Imah highlights that building such dynamic teams starts with inclusive recruitment. “It's about creating pathways for talent from all walks of life to not only enter but thrive within your organisation. This means going beyond traditional recruitment channels and criteria.
“We've implemented 'blind recruitment' processes to minimise unconscious bias, focusing on skills and potential rather than names or backgrounds. Additionally, partnerships with diverse professional organisations and educational institutions have been key.”
During challenging economic periods, EDI is often the first area of the business that is de-funded or no longer becomes a top priority.
Sleight highlights research from CIPD which found only one in six firms invested in an EDI strategy last year amid rising costs and economic pressures.
She explains “With the current recruitment crisis, companies need to improve their ability to attract talent from a diverse pool. This includes creating job postings that are inclusive and non-discriminatory and actively seeking out candidates from under-represented groups.
“It must be noted that diversity without inclusion is pointless. An organisation must ensure it has a fully inclusive culture to not only attract but to retain its diverse talent.
“Not just as a moral imperative—it is a strategic business imperative. By prioritising diversity, equity, and inclusion, organisations can unlock the full potential of their workforce, drive innovation and growth, and ultimately achieve sustainable competitive advantage and financial success.
“For diversity to really become integral to the core of a business it requires leadership commitment. Leaders must champion and embody inclusivity, setting the stage for meaningful change.”
Imah agrees, and highlights the three key strategies to place diversity at the core of a business. For organisations, the journey towards diversity begins with leadership commitment. It's important to cultivating empathy and understand diverse experiences to build a culture of respect and empathy.
Encouraging dialogue is also key to fostering open conversations on diversity and allow for shared learning and growth. Finally it's imperative to implement inclusive policies and to ensure organisational policies, from recruitment to professional development, mirror a dedication to diversity.
The road ahead
Addressing the lack of diversity in tech is essential and only by tackling bias, investing in equitable opportunity and creating inclusive culture can change truly be fostered. Imah concludes, “The need for diversity and inclusion is ever pressing in our globalised world. The challenges we face demand solutions born from the richness of human experience. It's through collective action that we can embed diversity into innovation's very core, paving the way for a more inclusive, sustainable future.
“My journey has taught me that diversity is not just a moral imperative but the cornerstone of creativity and progress. Embracing it is not merely the right thing to do but the smart thing, opening doors to uncharted territories of innovation and opportunity.”
The challenge is not limited to simply opening the door to diverse talent. It’s also about creating an environment of support and inclusion, where voices are heard, people are valued, skills are respected, and it’s appreciated that not everyone’s career journey is the same. Only then can a business truly represent the incredibly diverse society we currently live in.
Sleight concludes that we need a call to action. "For industry leaders, policymakers, and stakeholders to redouble their efforts in fostering an environment where black talent can thrive and contribute to the continued success and innovation of the tech industry.
“Only through collective action and unwavering commitment to equity and inclusion can we truly bridge the gap and create a more equitable future for all.”
