The big diversity problem that no one wants to publicly admit

Thanks to a Supreme Court ruling in June, colleges and universities can no longer consider race in admissions. Many academics believe that this same criteria is going to make its way into the private sector, and are calling into question the potentially discriminatory aspects of DEI (diversity, equity and inclusion) initiatives at many corporations.

"The court's rule that an educational institution 'may never discriminate based on race' now applies with equal force to employers," says Harvard Law professor Noah Feldman, who told NPR that he also believes that "there's a high probability, a very high probability, that a majority of this current Supreme Court will say the exact same thing" about corporate hiring too.

Already, corporations are reacting. DEI executives are being eliminated from the C-Suite and the same NPR report found that postings on jobs site Indeed for DEI positions, which skyrocketed 92 percent following the May 2020 George Floyd riots, have dropped by 38 percent since July.

Does this mean that corporate managers don’t want diversity? No, not at all.

When I speak to industry associations across the country about workplace issues, the people in my audience, like so many of my clients, are mostly white, middle-aged and male. But these people are not racists. They get it. They appreciate the benefits of a diverse workforce and management team. They want to help the Black and brown communities. They know that having a diverse employee base is not only good public relations but a good way to run a business.

But there's a big problem that no one wants to publicly admit, and it’s about supply. Companies can't find enough Black and brown people to hire. And when they do, the candidates most often lack the same level of skills compared to their counterparts.

Maybe this shouldn't be a surprise. The Black population in America makes up only 14 percent of the country's entire population, according to recent research from Pew. Not only that, only a quarter of Black men over the age of 25 have a college degree and more than half of the Black people in this country live in just a few southern states.

So let’s pretend you’re running a business in Iowa or Washington State or Arizona and you really want to diversify your workforce. For starters, there are fewer Black and brown people overall, and most don’t even live near you. And for the ones who do, almost three-quarters don’t have the skills you require. This is not an impossible problem to overcome. But it’s pretty daunting for a typical business.

You could argue that they’re not trying hard enough. Or they’re not looking in the right places. Or they’re not giving these candidates a fair shake. But that’s not what I’m seeing.

My clients do want to diversify, but they're not charitable organizations. My clients want to hire good, competent workers with skills, and they couldn’t care less about skin color. But they’re facing a supply shortage of these people. And they’ve found that the significant DEI investments they’ve made over the past few years aren’t providing a satisfactory return.

If we want to fix this problem, then there also needs to be better, smarter and more targeted spending on education and training and skill development both by the private and public sectors. Investing in primary and elementary schools in urban areas with the aim of getting kids at an early age to read and do math at satisfactory levels will prepare them for high school and college so that they can competitively enter the workforce. Duh.

And yet even after government and companies have spent countless billions toward this goal over the past four decades, progress remains agonizingly slow. As Armstrong Williams points out, and according to the National Assessment of Educational Progress (NAEP), a sector of the U.S. Department of Education, 84 percent of Black students lack proficiency in mathematics and 85 percent of Black students lack proficiency in reading skills. Let’s not even get into why this is still happening — there are too many people and groups to blame.

The reality is that this is not a problem that’s going to be solved overnight. And it’s up to the Black and brown community to continue to do what it's been doing: yelling and kicking and pushing corporate America to hire more of their own. Although regrettable, the George Floyd incident has forced corporate America to look at itself in the mirror and make a concerted effort to make changes in the racial makeup of its employees. Now the Supreme Court is making it easier for them to retreat on this progress.

But this doesn't absolve them of their responsibility to continue to diversify their workforce. The best way to do this is for the leaders in the Black and brown community to continue to keep this issue front of mind.

In the meantime, I know that the leaders of companies big and small want to hire more Black and brown people. They want to be more diverse. But it’s going to take time. Maybe even a generation. Economics is about supply and demand. And for now, the supply of available, skilled Black and brown workers is woefully short for many companies nationwide.

Gene Marks is founder of The Marks Group, a small-business consulting firm. He frequently appears on CNBC, Fox Business and MSNBC.