Silicon Valley’s tech companies have failed; not in investment returns, commercial office construction or even employee home values, but rather, in offering diverse workers a chance to reap the spoils of tech’s innovation, according to advocates, researchers and some local industry leaders.

The proof of that failure may even be in the industry's own proverbial pocketbook. Despite the diversity and inclusion initiatives that companies have implemented in recent years, tech employers still spend more than $16 billion annually to replace diverse talent that walked out the door due to what they viewed as unfair treatment and a biased work culture, according to the Kapor Center’s 2017 tech leavers study.

That level of hemorrhaging wouldn’t fly if it reflected paying customers, says Shellye Archambeau, a board member for several major Silicon Valley organizations, an author and the former CEO of software company MetricStream.

“Would you sit there and just wring your hands and say, ‘This is too hard, I can't do this and I don't know what to do’? No, you would not,” Archambeau said during panel at Joint Venture Silicon Valley’s annual State of the Valley conference Tuesday. “The first thing you have to do is to be intentional and say you actually want to solve the problem. I’m not quite sure everybody actually wants to solve the problem.”

Archambeau joined Freada Kapor Klein, founder of the Kapor Center, and moderator Dan'l Lewin, president and CEO at the Computer History Museum, to talk about diverse hiring and retention in tech this week, but the topic of diversity and inclusion has been an evergreen one for years in Silicon Valley.

The issue has become even more central recently, as big tech companies release diversity reports that reflect little change from year to year and Black and brown employees—or sometimes ex-employees—use social media to weigh in on why change has been so slow to arrive.

According to the Kapor Center, the technology workforce nationally remains 90 percent White or Asian and 75 percent male. Data from the Brookings Institute shows that while Black workers make up 11.9 percent of all U.S. workers, they account for only 7.9 percent of high-skilled tech, or "Computer and Mathematical" workers. Hispanic people make up 16.7 percent of all U.S. workers, but account for 6.8 percent of the technology workforce, according to the 2018 study.

Although that study came out a few years ago, those statistics don't seem to have moved significantly since, based on annual diversity reports from the world's biggest tech titans.

Move the Needle

Moving the needle on those statistics at this point will be hard, Kapor Klein acknowledges.

“I think a lot of tech’s failure is putting off dealing with diversity, so you end up with a denominator problem. If you have 100,000 employees, you have to hire an awful lot of people to move the needle one percentage point,” she said. “It is so much easier to bake (diversity) in from the beginning, and now employees are voting with their feet; employees are seeking out companies that care about diversity.”

Despite those challenges, tech employers can't wait to make big strides, Kapor Klein said, because the existing disparities perpetuate more of the same in hiring, including prioritizing expensive college degrees over skills bootcamps. Changing those views will take intention from managers and CEOs as well as mandatory benchmarks, she said.

“When C-suite folks miss their sales targets and revenue targets, we see heads roll,” Kapor Klein said. “Year after year, companies missed their diversity targets, and nothing happens, no one is held accountable. Look at any of the data about who gets hired and whose business plans get funded, and you realize this is–as my husband, Mitch Kapor, was quoted as saying more than a decade ago–this is a ‘mirror-tocracy,’ not a meritocracy.”

While many leaders say the diversity problem stems from factors beyond their control in the so-called pipeline of talent, but Archambeau and Kapor Klein say that's wrong. They liken that argument to how children claim they can’t find their shoes, but sneakers magically appear when parents look more meticulously.

The problem is that companies aren't looking hard enough for diverse talent and one way to find it is searching for skills rather than pedigrees, Kapor Klein said.

“If we're not so lazy," she said, “and we actually write down the skills we need, then we find there is an enormous talent pool.”