Breaking the Corporate Glass Ceilings

American companies have long lacked minorities and women at the top. But they are working on it.

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With an African-American serving as the nation's chief executive, a woman heading the State Department, and a Latina settling into a new job on the Supreme Court, are there any glass ceilings left for minorities and women aspiring to leadership positions?

Plenty of them.

Though blacks, Hispanics, and American Indians represent roughly 30 percent of the population, they fill only 3 percent of senior management positions at American corporations and nonprofits, according to Management Leadership for Tomorrow, a minority recruitment and development group. Just 15 Fortune 500 companies are led by women. Even fewer have black CEOs. And while blacks and Hispanics generally constitute 5 to 10 percent of a big law firm's first-year associates, they account for around 2 percent of those firms' partners, according to David Thomas, a Harvard Business School professor who studies the issue. "People of color who start at the same time as an equivalent white person have less of a chance of being at the top echelon in 20 years," he says, "in whatever field you're talking about."

But more and more employers are working to change that. They're partnering with minority recruitment specialists who offer assistance with grooming minority professionals for leadership roles. Top business schools are following suit, putting more minorities on leadership tracks. And more private- and public-sector employers are adopting internal strategies for getting minorities into senior roles. The number of companies applying to be in DiversityInc. magazine's annual "Top 50 Companies for Diversity" rankings—for which minority representation in management is a key criterion—has more than tripled in four years, to over 400. "Most companies have realized that mathematically, they cannot have the best talent available if minorities aren't represented," says Luke Visconti, DiversityInc.'s CEO.

Which means that corporations working to narrow the minority leadership gap aren't acting out of some impulse toward social justice; they're trying to improve their bottom line. But maintaining diverse workforces has proved a challenge. A recent report by the recruiting firm Korn/Ferry International found that U.S. companies are wasting $64 billion annually by losing and replacing employees who leave their jobs "solely due to failed diversity management."

A shortage of minority leaders is a big part of the problem. Minority employees don't want to stick with companies where the top jobs appear to be off limits to them. "If blacks and Latinos and women are looking up the food chain and they don't see people who look like them at the top, why would they stay?" asks Visconti.

For PepsiCo, a longtime leader in minority recruiting, the naming of Indra Nooyi—an Indian-born woman—as CEO in 2006 has helped attract more minority talent. "It says to a [minority] person who is considering us as an employer that we are serious about diversity and inclusion," says Paul Marchand, the company's vice president of talent acquisition management and global human resources. "This can happen to them."

Slow going. PepsiCo's "diversity and inclusion" program also helps prepare minorities in middle management for senior management posts, contributing to a 12 percent jump in minorities and women in executive positions since 2001.

Even for employers striving to fill more top jobs with minorities, however, the process is almost always slow. Experts who've studied the minority leadership gap say it's due less to overt racism than to unconscious employer biases and entrenched networks and habits. "The undermining often starts very early in a career," says Harvard's Thomas, "when minorities are less likely to be invested in by mentors and bosses making subjective choices about which people have long-term prospects to run the firm."

The Korn/Ferry report found that 34 percent of those who've left jobs because of diversity-related issues said they probably would have stayed if managers had recognized their abilities.

Biases about who's qualified for the top jobs can also keep midcareer minorities and women from being plucked for those posts. With few minorities in upper management, it can be difficult for employers to picture them there. "We see it as more a sticky floor than a glass ceiling," says Kerri Gwinn Harris, who runs a St. Louis-based consulting firm that offers diversity training. "Minorities can get only so far in their career before getting stuck in middle management."