money George Floyd's death spurred corporations to focus more on diverse hiring: Year Up CEO
The trial of former Minneapolis police officer Derek Chauvin for the alleged murder of George Floyd enters its ninth day on Thursday, more than 10 months after his death set off a wave of racial justice protests and elicited calls for social change from across corporate America.
In a new interview, Gerald Chertavian — the chief executive of a job training organization for young people called Year Up, which partners with many Fortune 500 companies like JPMorgan Chase (JPM) and Amazon (AMZN) — said large employers have "increased" their interest in diversity and inclusion amid the national reckoning over racial justice that took hold in the aftermath of Floyd's death.
The growing emphasis on workplace diversity springs not only from a commitment to the principle but an understanding that it improves business performance, Chertavian told Yahoo Finance Editor-in-Chief Andy Serwer.
When asked whether he's witnessed increased interest in diversity and inclusion from corporate partners over the past year, Chertavian said, "Very much."
"Following George Floyd's murder on May 25, many organizations saw the work we're doing and really made that link that economic justice is racial justice," he says. "Providing young adults with the chance to get economic mobility, in specifically the communities we serve is part of racial equity."
"So we've seen an increase in interest from organizations as they look to build more pluralistic societies," he adds.
The trial of Chauvin coincides with another outpouring of protest from corporate America in recent days in opposition to restrictive voting bills introduced in at least 47 states that disproportionately affect Black voters. After 72 black business leaders late last month took out an ad in The New York that criticized a recently enacted voting law in Georgia, a slew of CEOs came forward to criticize restrictive voting bills and reaffirmed the importance of access to the polls.
'This is not just about diversity'
African Americans remain underrepresented across office positions in corporate America, especially in lucrative industries like financial services and technology. In 2019, Black people made up 9% of workers in core information-technology occupations in the U.S., up slightly from 8% in 2015 and 7% in 2010, according to an analysis of U.S. Bureau of Labor Statistics published by MarketWatch.
Some studies have shown that companies with diverse workforces outperform their peers. Companies that have a greater amount of racial and ethnic diversity in their management and boards are 35% more likely to have financial returns above their respective national industry medians, according to a study of 366 public companies released by McKinsey & Company in 2018.
The performance benefits of diversity provide incentive for companies to make it a priority, Chertavian said.
"I'm hopeful that that trend is one that will persist and grow. Because this is not just about diversity. This is about building a stronger company, a company that makes better decisions," he says.
"The fact is diverse organizations perform better. So this is not about representation in and of itself," he adds. "It's about building great competitive creative companies that can problem solve and help their companies be competitive."
Chertavian spoke to Serwer in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.
For more than two decades, Chertavian has run Year Up, which has served more than 30,000 students across 35 campuses. Individuals who go through the organization's program attain an average starting salary of $43,000, Chertavian said.
A former Wall Street banker and tech entrepreneur, he seeks to afford the next generation the same opportunity to achieve professional success that he enjoyed.
Speaking with Yahoo Finance, Chertavian acknowledged that corporate America still has "a lot to do" in order to address its lack of diversity.
While he affirmed the commonplace focus on improvements in hiring, Chertavian also noted that companies need to ensure they retain and promote employees who come from historically marginalized groups.
"It's not just about hiring," he says. "We believe it's equally important to look at what are the best practices in retaining and advancing talent that's come from underrepresented communities."
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