Here’s How Microsoft Plans to Fix its Diversity Problems (MSFT)

Microsoft stock

Microsoft Corporation (NASDAQ:MSFT) has a diversity problem. In order to make the tech titan more diverse, Microsoft will tie executive bonuses to its success at achieving diversity hiring goals. This comes after it was reported that the number of women hires declined this past fall. Can Microsoft become more diverse in the future?

Microsoft Corporation Wants More Diversity

Silicon Valley isn’t diverse enough. Despite claims that it is a progressive community, the tech firms are not achieving their diversity aims. Ostensibly, these tech firms have workforces comprised of males, whites and Asians. Not much else. Microsoft thinks it may have come up with the solution to this issue: bonuses.

Microsoft Corporation (MSFT)

Moving forward, Microsoft will tie its bonuses for executives to its success at meeting its diversity hiring aims.

Gwen Houston, chief diversity and inclusion officer at Microsoft, wrote in a blog post that “the challenge is real.” However, with enough persistence and dedication to solve the problem, she suggested, Microsoft can have a diverse workforce.

The idea of merging bonuses with diversity targets are being adopted across Silicon Valley. Intel, for instance, spent $300 million on a diversity plan, which consisted of referring candidates who were women and part of minorities. One year after launching the initiative, 43 percent of all new hires in 2015 were females or minorities.

Why is Microsoft starting this plan? The firm discovered that the size of its female workforce fell from 26.8 percent to 25.8 percent.

Microsoft did find that the number of female employees in non-production sectors jumped by half a percent. Also, over the last 12 months, more than one-quarter of its new hires were women. When it comes to hiring minorities, Microsoft said that blacks represented 3.7 percent of the firm, up from 3.5 percent. Also, Hispanics accounted for 5.5 percent of the workforce, up from 5.4 percent.

Despite some of the positive trends, Microsoft thinks that it can do a lot more.

“We are encouraged by the modest gains we’re seeing in female representation in technical and leadership roles, and even more significantly, by the hiring trends of the past year that resulted from our efforts to recruit top-notch female talent,” wrote Houston in the blog post.

In addition to its bonus program, Microsoft is investing in diversity recruiting campaigns and STEM programs to boost the applicant pool.

Microsoft Corporation One of Many to Suffer From Lack of Diversity

Microsoft isn’t the only U.S. tech firm to be slammed for not having enough women and minorities workers. Facebook Inc (NASDAQ:FB), Apple Inc. (NASDAQ:AAPL), Twitter Inc (NYSE:TWTR) and many others have been lambasted for not having enough diversity in the workplace.

Last year, for instance, Facebook was chastized for having 86 percent men but only 14 percent women. When it was discovered that Alphabet Inc (NASDAQ:GOOGL)’s workforce had just two percent blacks, the tech giant was urged to do more.

Although tech firms are being active in hiring women and minorities, it is common knowledge that there is a skills shortage in the U.S. This is why some of the big Silicon Valley behemoths provide massive compensation packages for their talent because they need to attract and retain them. It’s simple supply and demand labor economics.

Another common problem in the world of tech: women and minorities don’t study tech subjects. This is part of the reason why there are many groups urging women and minorities to enter these fields. Unfortunately, women just don’t want to study tech. For those who do want to work in tech, studies have found that they already do, and many work in all sorts of roles, including in marketing and public relations roles. Plus, it has been found that women have a 2-to-1 advantage when applying for academic jobs in STEM fields because companies want them.

Some suggest that Silicon Valley is racist and sexist for not having enough women and minorities, though Asians make up for a large number of workers in Silicon Valley. Indeed, it isn’t as black and white as that. Whether you support a quota system or not, the data are there, and firms are trying their hardest to appease the Jesse Jacksons and the Gloria Steinems of the world.

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Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.


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