Uber's diversity targets receive mixed reaction
Jenny Roper, July 16, 2019
Uber has announced it will tie some executives’ bonuses to diversity targets in an attempt to increase representation of women and other minority groups
The firm declined to say what percentage of bonuses will be contingent on hitting diversity targets, but a spokesperson said it was a “significant” portion. This metric will be used, it's been reported, to calculate the bonuses of chief executive Dara Khosrowshahi, chief financial officer Nelson Chai, general counsel Tony West and the company’s new chief people officer Nikki Krishnamurthy.
The policy sets a target to increase the number of women in senior roles to 35% by 2022 and to raise the percentage of under-represented employees at mid-level and above to 14% in the same timeframe.
HR experts voiced doubts over the likely efficacy of such an approach, however. “Imposed diversity targets don't work, especially long term,” Vlatka Hlupic, professor of business and management at Westminster Business School, told HR magazine.
“They may provide some better statistics short term for PR and they may bring some extra bonuses for senior executives. But genuine desire for diversity needs to be embedded in mindsets across all levels in an organisation; it has to be part of organisational DNA, it has to be part of the recruitment process across all levels – bottom up and top down. Nurturing talent and diversity should be authentic, not a part of bonus incentives.”
Former chief operating officer and former chief HR and corporate officer at the University of Sheffield Andrew Dodman agreed. “It’s always really positive to see any organisation, especially the large, international, high-profile ones, emphasise the importance of workplace diversity and inclusion,” he told HR magazine. “However, I’m less convinced by linking personal financial reward to diversity metrics. Isn’t the point that organisations will only ever flourish if they include and embrace the widest and most diverse workforce talent?
“Diversity should therefore be embedded throughout the whole employment journey and across the entire workforce, and should not be presented as a standalone demarcated target for just a few senior executives to worry about.”
While sounding a more positive note around the likely effectiveness of the approach, CEO and founder of Caerus Executive Frank Douglas agreed that diversity targets should be embedded in all parts of the employee lifecycle.
“The often-quoted McKinsey report on diversity stated that companies that are successful in achieving diversity and inclusion among women and ethnic minorities are 35% more likely to outperform their competitors. Therefore, while on the surface it is about diversity, at its heart it is about ‘alpha’ level performance. For that reason I endorse the approach,” he said.
“However, my work with companies has shown that they lack a key focus on retention. As such a more effective metric is both recruitment and retention.”
Helen Giles, executive director of people and governance for St Mungo's, agreed that this move constituted a powerful statement of intent: "What gets measured gets done, so Uber and other companies who are linking pay to achieving diversity goals are making a powerful statement of their commitment to change," she commented.
The news of Uber's new approach to incentivising diversity follows it becoming subject over recent years to widespread accusations of chauvinism under former chief executive Travis Kalanick. In 2017 former US attorney general Eric Holder was hired to conduct an investigation into Uber's gender policy, which led to 20 people being fired.
Kalanick announced that he would take a leave of absence for an unspecified period in June 2017, which followed a series of top-level departures, including senior vice president for business Emil Michael and president Jeff Jones. Among the issues leading up to Kalanick’s eventual permanent departure was a blog post by a former employee alleging sexism and harassment.
Other tech firms including Microsoft and Intel have also tied some executive pay to improving diversity.
Uber revealed this new policy in its most recent diversity report, which showed increases in women and BAME employees, but that the firm and its leadership remain largely white and male.
As of March 2019 44.7% of US employees were white, down from 48.6% a year ago. Globally women accounted for 40.9% of the workforce, up from 38% last year.
The proportion of women in leadership rose to 28% from 21% globally in 2018. However, in tech leadership roles the percentage of women dropped from 15.5% to 13.8%.
Other tech companies have also recently been accused of cultures that ignore or perpetuate harassment and gendered discrimination. At the end of last year co-ordinated action at Google saw employees and contractors walk out of 50 locations.
Dubbed ‘Walkout for Real Change’, this was organised in response to the news that Google had fired 48 staff over the past two years as a result of alleged sexual harassment.
Uber has also faced a series of scandals, including two women being sexually assaulted by one of its driver and a passenger kidnapping. It is also subject to ongoing debate and legal challenges regarding the employment status and treatment of drivers.
Regarding this latter issue, executive director of The Equality Trust Wanda Wyporska commented: “It’s always great to see action on diversity and a focus from the top and I look forward to seeing results rather than just headlines. However, let us not be distracted from the working practices of the company and treatment of those who produce the profit for those highly paid executives: the drivers.”