Employees often perceive their companies to be more or less diverse than they actually are

Perceptions of diversity often don’t match reality.
Perceptions of diversity often don’t match reality.
Image: REUTERS/Stefan Wermuth
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When it comes to having diverse leadership, perception doesn’t always align with reality. Media attention and reports targeting certain industries can serve to create misconceptions about their relative diversity while inadvertently allow other industries to fly under the radar.

When the crowdsourced competitive intelligence platform Owler asked its community of 1.5 million users whether their company had a diverse leadership team, much of what was self-reported by the 11,700 respondents across 1,100 organizations wasn’t actually the case.

“A lot of the companies that were perceived as highly diverse are run by white men,” notes Owler founder Jim Fowler. He points to Snap-on, Autozone, Mary Kay, New York Life Insurance and MillerCoors as examples of companies that landed amongst the top of the list for being perceived as most diverse despite a high proportion of executive roles and board seats at those companies being filled by white men.

Overall, retail was perceived to be the most diverse industry, outranking financial services (8th) and technology (7th). According to a recent report by PricewaterhouseCoopers, however, retail and financial services have the same gender diversity among directors, with women comprising 26% of corporate boards. According to the same report, the technology industry ranks third for gender diversity amongst directors, with 23% of leadership roles filled by women. This is the same percentage as in the pharmaceutical and biotech industry, but in Owler’s study on perceptions of diversity, technology was perceived as less diverse.

There is no industry that PwC considered in its report that came close to achieving gender parity on corporate boards. Across retail, pharmaceuticals, technology, and other industries, the percentage of women on corporate boards ranged only between 20% (the communication industry) and 26% (the retail and financial services industries). But Fowler believes that a perception there is a perception that some industries are much worse offenders than others. “Tech is widely perceived to not be diverse, because a lot of ink has been given to that, but the perception and reality are very different,” he said. “Retail is perceived as highly diverse, but sometimes I think people are getting the customers of these companies confused with the workforces of these companies.”

Fowler believes that public perception is often shaped through a combination of media reports, advertising, and what small interactions consumers have with members of those industries in their day-to-day life. As a result, industries or companies that have low levels of diversity amongst their upper management can be perceived as more diverse than they really are if they inject diversity into their customer-facing teams, their advertising and their product offerings.

“One of the most interesting ones to me is Mary Kay,” said Fowler, adding that the beauty company has a highly diverse sales force while its executive chairman and president and CEO are both white men.

At the same time Fowler has found that criticism levied against the tech industry for its lack of diversity is often more amplified in the media than other industries.

“It gets perceived as having a deficiency but in my opinion we’re out there hiring for diversity at every turn,” he said. “We [the tech industry] always get press for not doing it, but I always look at that and shake my head because I don’t think there’s an industry that wants to have diversity more than the tech industry.”

In spite of the discrepancies between perception and reality, however, Fowler believes it’s important to continue applying pressure in all directions in order to improve diversity across the board.

“I still believe that its good for the industry to get that pressure, because most leadership teams and boards of directors are dominated by white males, and by putting pressure it forces that conversation,” he said.

Studies have also found a correlation between diversity and company performance, concluding that those with more diverse workforces outperform industry-averages. Even though perception of relative diversity doesn’t always align with reality, Fowler believes that the fact that people are paying this much attention is significant.

“Do I think articles are a little bit slanted against the tech industry because they make good copy in an unfair way? I do. Is that necessarily a bad thing? No,” he said. “It’s important for folks to keep writing about this and keep the conversation at the forefront, because it ultimately makes us a better and fairer society.”