Silicon Valley Still Faces a Reckoning on Race

Photo: A view of Silicon Valley (as in the Santa Clara Valley) at night. Critics of the region's tech sector say the industry has long had a race and diversity problem.

Cloud computing giant Workday, which specializes in human capital and financial management software, is an incredible success story. Founded by two former PeopleSoft execs in the wake of Oracle’s hostile takeover of that company, in 15 years its market cap has soared to almost $43 billion.

Based in the Bay Area and boasting more than 12,000 employees globally, Workday’s spectacular growth has been matched by a strong reputation for being a welcoming place to work. The company has landed on various “best places to work” lists, including the popular top 100 rankings that regularly appear in Fortune.

Nevertheless, Workday acknowledges that the company, along with Silicon Valley at large, has plenty of work to do on the diversity front. Company co-founder and CEO Aneel Bhusri has long scored attention for his premise that companies need to show value beyond their share price and that they need to have a soul.

Bearing that soul, in turns out, involves taking a close look at the makeup of your staff.

In a Fortune podcast hosted earlier this week by Alan Murray and Ellen McGirt (the latter of whom writes one of the best newsletters on culture and diversity in corporate America), Bhusri was frank about Silicon Valley’s record of hiring a workforce that looks like America.

Workday itself says less than 3 percent of its workforce is Black. But to the company’s credit, Workday openly discloses this statistic — which is not the norm in Silicon Valley, much of which still notoriously lacks transparency despite the global technology sector’s role in helping to make the world a much more open place.

Bhursi acknowledged that part of the problem is committing to find the talent in the first place. “We have to do a better job recruiting from college, including HBCUs [historically black colleges and universities],” he said. “We need to branch out of the Bay Area and look at other locations.”

Ensuring those employees feel welcome and believe they have an opportunity to grow has also posed a challenge, Bhursi said. “There’s a sense if you’re a Black employee, you don’t get the same mentorship and sense of opportunities that a white employee or an Asian employee might get,” he  explained.  In his office, Bhursi has two employees mentoring him on the Black experience in the workplace day to day. Recruitment is not enough, and changing how you hire new employees won’t make a difference if they feel as if there is no chance for advancement long after they are on-boarded.

Finally, Bhursi had this to say about the work culture in Silicon Valley: “I think in the Bay Area, we all think the world is a meritocracy, and I think there's some truth to it. I don't think that's actually how the rest of the world works out,” he said. "You really do have to lean in . . . even in the Bay Area . . . to really create great career paths for everybody, not just for a few."

Diversity is a work in progress at Workday, and the company has its own approach, which it has trademarked as “VIBE” – value, inclusion, belonging and equity. That’s not only a tagline. Bhursi said the company measures its performance internally; as the timeless business cliché goes, you can’t measure what you don’t know. Critics can discuss whether Workday’s approach toward diversity and its run of success are linked by causation or correlation, but it’s hard to argue when the company lands on “best place to work” rankings, for many demographic groups, on Fortune and elsewhere.

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Image credit: Egor Shitikov/Pixabay