Discrimination is alive and well in the tech industry, and there’s no use denying it. The industry is just notorious for being deeply rooted in an old boys’ club mentality, and it turns out the tech industry is paying the price greatly for this.
Discrimination doesn’t just literally cost the tech industry money; it also costs them leaders, innovation, and perspective. The tech industry is certainly losing out in more ways than one and they need to do more to fix it.
Just how much is this costing the tech industry? $16 billion dollars a year. Yes, that’s billions, not millions, of dollars. Such a sum of money is basically as unfathomable as an industry that’s so slow to do something about discrimination.
The Kapor Center recently published a study called the Tech Leavers Study that outlines the annual $16 billion dollar loss the tech industry is experiencing. They also delve into why this is happening.
They surveyed 2,000 people who quit their jobs in tech over the past three years and found that 40% quit due to mistreatment or unfairness. Ok, 40% doesn’t sound astoundingly high, but consider this.
Each job an employee leaves costs tech companies about $144,000. Where does this come from? $144,000 comes from the costs associated with replacing that employee, it comes from a monetary loss and a hit to productivity while the company moves to replace them. It comes from recruiting costs associated with finding someone to replace that employee. It comes from salary. So if 40% leave for discrimination reasons at a cost of $144,000 per person, $16 billion doesn’t sound so out of line now.
“What would the cost look like for an individual company? If we assume a large tech company pays engineers an average salary of $100,000 and it employs 10,000 engineers, even with a lower turnover rate (5 percent) and turnover rate due to unfairness of 37 percent, that company alone would lose $27 million per year by allowing their workplace culture to drive talent out the door,” The authors of the study state.
All it takes is a few tech CEOs to pay attention to this and do something to fix it to get the ball rolling in the right direction. Culture in the workplace matters. Working to eliminate discrimination matters.