Si Se Puede: Why Creating a Latino C-suite Pipeline Is Important

A growing and diverse population

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.

Why you should pay close attention

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 2021, 16% of Citrix’s employees identified as Hispanic or Latino. Hispanic and Latino employees make up 14% of the company’s people managers workforce and 9% of its leadership.
• In 2021, AT&T’s Hispanic/Latino employees make up over 15.9% of its workforce, and 12% of its U.S. management workforce are Hispanic/Latino.

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.

Change is happening but a lot still needs to be done

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: 

• While the company has been building diverse leadership teams for decades, P&G signed its Hispanic Promise pledge in 2020. The pledge focuses on hiring, promoting, retaining, and celebrating Hispanics in the workplace. 
• To develop a sense of community within their organization, some companies have chosen to implement Employee Resource Groups (ERGs). For example, Coca-Cola’s ERG, the Hispanic Leadership Business Resource Group, provides Hispanic and Latinx employees with development, networking, and community involvement opportunities. 

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”.

What can companies and senior leaders do? 

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. 

• Groundwork Understand the Latino demographic to support pertinent strategy development. Understanding Latino demographics will allow you to introduce necessary nuances to your strategies and help you identify Latino talent that may fall outside stereotypes.
• Leadership buy-in is essential to initiate rapid, company-wide culture change. Senior leadership and board members must align on the company’s DEI objectives and support related initiatives. Alignment at the outset will facilitate strategy implementation and speed up the process. 
• Assess where your company stands on DE&I, including specifics around the Latino population. Companies must look at all aspects of their organization, including boards and governance and procurement and vendor services. Assessments can be done through surveys, audits, targeted interviews, data analyses, or a combination of those. 
• Develop a thoughtful and concerted DE&I strategy based on assessment findings and goals. Using a multi-pronged approach and keeping in mind demographic nuances and high-context culture, develop Latino-specific initiatives within your overall DE&I strategy and clarify each business unit’s level of participation. Accountability processes should be integral to your strategy, including at the board level, and regularly reassessed. 

Operate change

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: 

• Commitment outside your organization. Demonstrate your commitment to the Latino population by developing initiatives and empowering their community through apprenticeships, supplier diversity, partnerships, or philanthropy. For example, GM has handed out $5.7 million in scholarships for Hispanic students in STEM.
• Hiring at the top. Placing a Latino executive in a senior leadership role sends a strong message of inclusivity to stakeholders and can empower the next generation of Latino leaders. Besides the symbolism it conveys, minority leaders also add unique value to their organizations. As Adriana Mendizabal, Group President of Stanley, Black & Decker points out, Latinos “have brought a completely different view to business which sometimes has resulted in completely new sources of growth. In her career she has been called “the secret weapon’’ and noted hat her diverse perspective allowed her to “do things that nobody else would be able to do.
• Leadership development through mentorship. While mentors need not be Latinos themselves, having a shared cultural experience can drastically reduce attrition and strengthen the internal leadership pipeline. Borja Perez, SVP Revenue Strategy & Innovation of NBCUniversal, tells us that his best mentors “were numbers-driven, always aware, and focused on the importance of Latino Executives.” Monteaguado recommends leaders adopt an NFL coach mentality: “if you see your talent like a coach and the game depends on them winning, you will do anything for them to win.” And when there are no Latinos at the top, organizations may look outside their organization. A great example is Dell’s Latino Connection, which partners with the Hispanic Association on Corporate Responsibility to provide mentoring, volunteering, networking, and leadership opportunities for over 1,600 members. 

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.