According to the 2020 Census, Latinos continue to dominate population growth in the US. The Census Bureau estimates that by 2060 Latino people will reach between 28% and 33% of the population. However, this growth is not reflected in the corporate world, and representation at the c-suite and board-level lags behind despite the widespread availability of top talent. The Center for Employment Equity notes that only 4% of executives are Latinos, and even less are Latinas. Additionally, the Latino Corporate Directors Association shared that in 2020, only 16 SP&500 CEOs were Latinos, and only 2.7% of Fortune 1000 company board seats were held by Latinos.
One main factor contributing to this dissonance is the homogenous perception of this demographic that often results in companies having difficulties identifying Latino talent and retaining them. As Ozzie Gromada Meza, Associate Vice President, Member and Talent Services at Latino Corporate Directors Association notes, many companies “don’t know where to look because they don’t know what Latino is.” The Latino/Hispanic community in the United States is the most racially diverse ethnic group, with over thirty-three nationalities taken into account. And while this minority group as a whole has commonalities, including a strong sense of heritage and collectivist culture, their experiences in the U.S. are highly nuanced. Only recently have the layered realities of White Mexicans, Black Dominicans, Asian Peruvians, and more been brought to light on a national scale. For example, we now know that Latinos are a mostly biracial or multiracial population-according to the 2020 Census, 32.7% currently identifying as such.
Understanding and celebrating the rich diversity within this population is the first step to help identify and address barriers for Latino individuals to access the C-Suite and boards, as well as to foster a greater sense of belonging in corporate America, the economy, and society more broadly.
While representing one of the largest audiences nationwide, the Latino market potential is often overlooked. In 2018, U.S. Latino GDP totaled $2.6 trillion, which surpasses the GDP of the eighth largest economy in the world. Reaching out to this growing market is not only the right thing to do it also makes economic sense. Companies like AT&T and Citrix have understood the importance of serving this segment of the population early on and have developed strategies not only externally, notably through effective marketing campaigns, but also internally:
In addition, laws mandating leadership diversity quotas are gaining traction in the U.S. Several states, including California, Colorado, Illinois, Maryland, New York, Pennsylvania, and Washington have enacted some type of board diversity measures. For example, California’s Law AB 979 mandates the number of directors from underrepresented communities to be increased by the end of the calendar year 2022 for all California-based institutions. We also note SEC’s new rules adopted over the summer of 2021 requiring Nasdaq-listed companies to have at least two diverse directors on the board. It is in the best interests of U.S. companies to get ahead and develop adequate strategies to attract and retain the best talent today.
Many companies are paying closer attention to these demographic shifts and have begun addressing their shortcomings in serving the Latino population. For them, the focus is now on greater integration within their organization and culture:
Despite great efforts taking place, the proportion of Latino people in the c-suite is far from reflecting the make-up of the labor force in the U.S. Another marker highlighting the work yet to be done is the high attrition observed within the Latino population. According to the Hispanic Association on Corporate Responsibility (HACR), by 2016, the Latino attrition rate was 20%. High attrition suggests shortcomings in addressing cultural differences within organizations. Latinos are more likely to approach work from a collectivist, high-context culture. These cultural differences can prevent Latino employees from being their authentic selves at work and impact their sense of belonging. As Graciela Monteagudo, Board Director of iHeart Media, WD-40 Company, ACCO Brands, Driscoll’s, and Juice Plus+ explains, “oftentimes boards and management will want to improve gaps by hiring without making changes in the culture”.
The first step in addressing shortfalls in building a Latino talent pipeline at the executive and board level is to develop multi-pronged strategies that go beyond hiring Latino individuals. While recruiting Latino talent should be central to supporting diversity goals, it is only one piece of the puzzle. Following are some recommendations derived from our experience providing DE&I advisory services and placing Latino executives at leading organizations.
Implementing a DE&I strategy can be a vast and delicate undertaking. External advisory firms can help you reach your DE&I goals from assessment to delivery and help you avoid pitfalls along the way. Common practices include hiring a chief diversity officer, enhancing the diversity of the board, instituting ERGs, developing charters and specialized programs, and offering DE&I training and inclusive leadership development. We take a closer look at a couple of them:
External recruiting has yielded better results in hiring diverse populations. Russell Reynolds Associates is committed to helping you on your DE&I journey, whether through talent-hiring or by helping you build inclusive cultures and practices with the help of our DE&I Advisory teams.