Silicon Valley has a diversity problem that even…

Tristan Walker’s house

A 4-year-old son could see.

In 2018, after a trip to the grocery store with his father in Palo Alto, California, Mr. Walker’s son noticed : Palo Alto is where all the white people are.

It was a moment when Mr. Walker, who is black, impressed not only as a father but also as a CEO. As head of Walker & Co Brands, a startup that makes personal care products for people of color, he notes that it can be difficult to recruit people to Silicon Valley. The area was expensive and not particularly diverse. Mr. Walker was hired in 2008 and has worked in both departments.

Twitter Inc.

TWTR -0.73

and Foursquare Labs Inc. but he increasingly saw their limitations.

We certainly lost some compelling talent, says Walker, 36. Instead, he decided to move his family and business to black Atlanta.

In recent years, companies have moved their headquarters from the suburbs to the city center to attract younger workers. More and more companies are now setting up new offices to recruit ethnic talent. Atlanta in particular has attracted some big names, many from the technology sector.

Microsoft Corporation.

is investing $75 million in an Atlanta plant that is expected to create 1,500 jobs. Alphabet Inc. is investing more than $25 million this year, expanding its current office by three floors to a new location where the company will eventually occupy 19 floors.

It’s just a vibe and a visual effect that says, can I reach out, says Disha Barnett, who studied at historically black Atlanta University and first visited the city in the 1990s on a study tour.

Photo:

DUSTIN CHAMBERS for The Wall Street Journal.

I have two young black boys, said Walker, who moved in April 2019. I wanted them to grow up in an environment where they could see the richness of the black experience. His oldest son, he said, now attends a school with many black teachers, black classmates and a black principal.

Atlanta is not only the source of the civil rights movement, but also the home of

Martin Luther King, Jr.

It also includes 16 Fortune 500 companies, including Coca-Cola Co. and Home Depot Inc. There is a thriving start-up scene and half a dozen historically black colleges and universities. For technology companies looking to diversify, this is a particular problem: According to Mary Schmidt Campbell, president of Spelman College, an HBCU in Atlanta, 40 percent of STEM graduates are black, although they make up only 3 percent of the school’s students.

When I look around and think about where I can settle down and find different talents, Atlanta is like a neon sign, she says. The city is 51 percent black; in contrast, about 2 percent of Silicon Valley is black.

If the company grows, some fear residents will be displaced. According to the National Association of Realtors, home prices rose 19% year-over-year in the last quarter of 2020. In 2019 alone, the Atlanta metro area grew by more than 75,000 residents. The population of the metro is currently around 6 million people. Janice Overbeck, a broker at Keller Williams, says about 40 percent of the clients she and her colleagues receive are from out of state, up from a handful five years ago.

Last year, Atlanta had its own racial tensions. The fatal shooting of a black man by police in a Wendy’s parking lot in June led to the resignation of the city’s police chief and mass protests. The city was already rocked by a wave of protests last month after

George Floyd

was murdered in a Minneapolis police station. The mayor of Atlanta, who is black, called for an end to the chaos of those who sometimes organize violent protests. And last week’s mass shooting in Atlanta, which killed eight people, including six Asian Americans, has put the city at the center of a national debate about violence against Asian Americans. Like many other major cities in the US, Atlanta has seen an increase in violent crime.

Geographical disagreement

For Airbnb Inc, which is setting up a technology center in Atlanta this year and plans to hire several hundred people there, the location was an opportunity to demonstrate its commitment to diversity, Laphonza Butler, Airbnb’s director of public policy for North America, said in an interview. He said the move is part of Airbnb’s pledge that by 2025, 20 percent of the U.S. workforce will be made up of underrepresented minorities.

McKinsey’s research shows that there is a geographical mismatch between black talent and economic opportunity. Less than 9% of blacks live in the West, where most new technology jobs are concentrated. Almost 60% of them live in the south. Bryan Hancock, a McKinsey partner who leads the company’s talent management efforts, notes that in addition to new office space, Covid says the ability to work more remotely can provide opportunities for diverse talent.

We wouldn’t be able to meet [Airbnb’s diversity goals] if we only had a headquarters in San Francisco or London, Butler says. We had to look in totally different places to get the results we wanted.

Some expansion plans have been in the pipeline for a long time. Others followed Mr. Floyd’s death and the protests that followed.

in Atlanta, Mr. says… Walker, Avery, now 6, goes to school with many black teachers, black classmates, and a black principal.

Photo:

Rita Harper for The Wall Street Journal

Gong, a Bay Area sales analytics software company, was planning to open a second U.S. location in 2020 – cheaper real estate and a less competitive talent market. He was ready to announce Salt Lake City as his destination when Covid struck and interrupted the announcement. A few months later, shortly after Mr. Floyd’s murder, Gong abandoned his plans and chose a new target: Atlanta.

It was like we were on vacation, recalls Sandi Kochhar, the company’s human resources manager. Salt Lake City is not the most complete talent from a racing perspective. Is that the decision we want to make? Last year, the company began hiring for dozens of jobs in Atlanta and stepped up its hiring of minorities. Since January this year, the percentage of black employees has increased from 1.4 percent to 4.3 percent of the company’s 370 employees in the US.

Management company

BlackRock Inc,

which opened an office in Atlanta in 2018, says the move has paid off. According to the company, about 26 percent of the 340 employees in Atlanta are black, while 11 percent are Hispanic. In contrast, according to the company’s latest data, 5 percent of U.S. workers are black and 6 percent are Hispanic, out of a total of 7,600 U.S. workers.

We see diversity as a business imperative, says Toretta McGuire, global head of talent acquisition at BlackRock. The company plans to expand the number of employees in Atlanta to 1,000. Demographics and available talent definitely played a role in our decision, she says of her expansion.

In the 1990s, when Angel Cabrera went to Georgia Tech in Atlanta as a graduate student in the cognitive psychology department, the lot on the east side of campus was a surface parking lot, he recalls. It now houses innovation centres for investment companies.

Investco Ltd.

and several Fortune 1000 companies. The place is swinging, said Cabrera, who is expected to become president of the university in 2019.

He says there’s plenty of room to be louder in Atlanta. Like

Delta Air Lines Inc.

The center, he said, is home to the country’s busiest airport and the Centers for Disease Control and Prevention, which he said is also home to a growing biotech industry. Calendly LLC, a local black startup offering an online planning tool, has just received a $350 million private equity investment worth $3 billion. Two of the

Peloton Interactive Inc.

The company’s founders are graduates of Georgia Tech, which was the lead startup. Since 2014, Create-X, an incubator for student companies, has launched 230 startups worth more than $600 million; of the most recent cohort of founders, 21 percent are black or Latino.

Google’s Atlanta office has a higher retention rate of black employees than other offices, as shown in the figure.

Photo:

Rita Harper for The Wall Street Journal

Atlanta’s demographic profile – in the metro area – is second only to New York City’s, giving the city an advantage over cities like Pittsburgh and Nashville, which also have very diverse populations, said Peter Miscovich, managing director of real estate services provider JLL’s consulting practice. Sir, I want to thank you for your support. Miscovich recently helped an insurance company move hundreds of jobs from New York to Atlanta. According to him, more than half of his clients cite diversity as an important criterion when choosing a new place to live: This is a real change from what we saw 25 years ago, when companies were mainly looking to cut costs and staff numbers.

Too busy to hate

Atlanta-based companies also say they are attracted to the city’s progressive history. Early race relations in the city were supported by politicians like former Mayor William Hartsfield, who hired the city’s first black police officers in 1948. He didn’t want our city to look like Birmingham or Little Rock, he said.

Ingrid Sanders Jones,

a retired Coca-Cola executive who from 1979 to 1981 served as executive assistant to Atlanta’s first black mayor, Maynard Jackson, whose administration made promoting minority entrepreneurs a priority.

These things set us apart and began to change the trajectory, she says, and helped to create a more affluent black middle class. During the civil rights era, the city became known as the city too busy to hate.

Deisha Barnett, who grew up in southern New Jersey, vividly remembers the impression Atlanta made on her when she arrived at college in the 1990s. You see a lot of black people in nice cars, it’s just the mood and the visual expression that speaks: I can reach her, said Barnett, who studied at Clark Atlanta University and returned in 2014 when her husband got a job at Google and now works for the Atlanta Chamber of Commerce. Black supremacy in Atlanta is on display, and has been for a long time.

Ryan Wilson, CEO of the Gathering Spot Club, which brings together only local professionals, is happy that the city has found its way, but is concerned about long-term affordability. Our biggest export is our culture, says Wilson, who grew up in Atlanta in a black entrepreneurial family, with parents who owned a call center business. The people who create this culture should be able to live here.

Melonie Parker, Google’s director of diversity, says the company pays attention to these issues and works with community groups to help shape local small businesses. Google currently has 600 employees in Atlanta and plans to significantly expand its workforce. This initiative is part of the company’s commitment last summer to more than double the number of black Googlers by 2025 and to invest in places that provide a high quality of life for these workers.

Parker, who is black, recalls that when she first arrived in Silicon Valley, she struggled to find a place to pray and get her hair done. Company culture is not the only factor in an employee’s growth, she says, it’s also the neighborhood.

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Atlanta has a higher retention rate for black employees than other Google offices, she said, and internal surveys show a higher level of engagement among those employees.

In 2016, the music company Pandora pledged to increase diversity and ensure that 45% of the American population is of color by 2020. Two years later, he opened an office in Atlanta, which today has more than 200 employees. Given the diversity and richness of the cultural environment in the region, this step was an obvious choice, said Nicole Hughey, Vice-President for Diversity and Integration at the European Commission.

Sirius HM Holdings Inc..,

who took over the business in 2019.

Although SiriusXM says it does not disclose the ethnicity of its employees, Hughey says the Atlanta office employs more than 50 percent people of color: He has not abandoned us.

The Plexiglas partitions and floor panels may not hold up, but the pandemic will permanently change the office. Architecture and real estate experts talk about their return to work and what offices will look like in the future. Photo: Cesare Salerno for The Wall Street Journal.

-Teh-Ping Chen writes about diversity in the workplace. Email [email protected] with your tips and story ideas.

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