After decades of failed diversity pledges and good-faith promises to hire more minorities, U.S. companies are taking a more aggressive approach. For the first time, some of the biggest corporations are setting concrete racial quotas.
As many as a half-dozen companies have said they’ve adopted workforce quotas in recent months. These include Wells Fargo & Co., the nation’s third-biggest bank, which said it will increase Black leadership to 12%. The bank last week settled federal allegations of hiring bias. Meanwhile, fashion house Ralph Lauren Corp. said it aims to make 20% of its global leaders people of color, including Black, Asian and Latino workers. Delta Air Lines Inc., where 7% of the top 100 in the organization are Black, will double the percentage of Black officers and directors by 2025.
The moves, a response to this summer’s nationwide protests and employee revolts after the police killing of George Floyd, mark a dramatic shift in thinking by executives in industries ranging from banking to cosmetics to fashion. They amount to a blunt admission that the existing diversity playbook doesn’t work and has failed people of color — especially Black employees.
“Companies that write affirmative-action plans, which set goals, see more progress toward diversity than companies that don’t,” said Frank Dobbin, a professor of social sciences at Harvard University.
Many companies, including Estee Lauder, Alphabet Inc. and JPMorgan Chase & Co., promised to boost Black hiring. All these targets are little more than good-faith policies with no consequences for failing to meet them.
“You’re going to see a lot of focus, even now, in internal movement and internal talent spotting,” said Keyra Lynn Johnson, Delta’s top diversity executive.
For decades, many of America’s biggest employers have publicly pledged their commitment to diversity. They spent billions of dollars recruiting people of color, hired diversity officers and ran ads touting their dedication to inclusivity.
And the result? Black people, who make up 13.4% of the U.S. population, now account for just 3.2% of executive or senior leadership roles, according to a 2019 study of full-time white-collar workers by the Center for Talent Innovation.
But the use of quotas, a tactic with a mixed record, has drawn a good deal of criticism: They have been used to both limit employment of non-white workers or ethnic minorities and to encourage it. Their use also can invite legal challenges and the Supreme Court has taken a dim view of them when used by public employers, though it has allowed them by companies.
But according to Harvard’s Dobbin, even when companies say they are working toward diversifying their workforces, they set vague objectives, giving management nothing tangible to shoot for.
“In many firms,” Dobbin said, “managers don’t often know what the goals are.”
Now, at least, some of them will know.