By Grace Donnelly
March 30, 2018

Intel released its 2017 annual report on diversity this week, showing that the company is ahead of its overall workforce goals, but still struggling to hire, retain, and promote black talent.

White workers accounted for 47.8% of Intel’s U.S. employees last year. Asian workers made up 38.5%, while Latinx employees were 8.8%, African Americans 4%, and Native Americans 0.7% of the total workforce.

Intel employees are still overwhelmingly men — women make up just 26.5% of their U.S. workforce, a 0.8% increase since 2016.

“If you do not intentionally include, you will unintentionally exclude,” Barabara Whye, Intel’s chief diversity and inclusion officer, told Fortune.

She says her engineering background heavily influences the way she approaches solving this problem at Intel.

“We set goals, we measure, we achieve our goals. Just like any other business initiative,” she said. “And we’re having these conversations with our CEO Brian Krzanich on a monthly basis, just talking about the progress.”

In 2015, the company pledged to reach full representation in its workforce by 2020 and committed $300 million toward that goal.

The company determined this representation gap goal based on market availability — a metric calculated and updated by a third-party human resources law firm that considers U.S. Census Bureau data on the demographics among tech workers, the number of college graduates in related fields from the National Center for Education Statistics, internal company data, and other sources to estimate the total number of qualified workers in the job market for specific positions.

At the time of the pledge, Intel identified that this gap was made up of 2,300 employees. Since then it has shrunk to 376 people, and the company is on track to reach full representation this year, two years early.

What’s Working

Intel is seeing some improvement in promoting diverse talent. Underrepresented employees in leadership roles have increased 27% since 2015, according to the report.

This is due, at least in part, to an emphasis on accountability — manager pay has been tied to diversity and inclusion goals since 2016.

“Intel has a bonus structure such that roughly 7% of our employee bonuses across the Intel enterprise are tied to the diversity business objective — which, again, is echoing the point that this is a business initiative and is integrated into the business and is a portion of our bonus structure,” Whye said.

For managers to receive this part of their bonuses in full, 45% of new hires have to be from underrepresented groups and the retention rate for diverse talent has to be equal or better than their overrepresented peers.

“The formula is not just hiring only,” Whye said. “Retention is probably even more of a critical lever around Intel’s work.”

The Warmline program, now in it’s second year, has helped with retention.

Set up to assist unhappy Intel workers before they decide to find a new job, more than 10,000 employees have used Warmline so far and 90% of them have remained with the company. The feedback from these employees has also helped identify that managers and career stagnation are two of the main reasons workers become disinterested in their roles.

What’s Not Working

Following a trend in many diversity and inclusion efforts, much of Intel’s growth in the share of underrepresented employees is being driven by hiring white women. Even so, the promotion of women is relatively stagnant, with representation among leadership remaining unchanged last year compared to 2016.

Intel is still behind their goals — and behind tech companies like Apple — on African American representation in their workforce.

“The remaining gap to full representation for us is the hiring, progression, and retention of African American talent and employees,” Whye said. “To that end, about 85% of the remaining gap is African American talent, so that’s kind of where the focus is.”

Through internal research, Intel determined three target areas to help increase black representation at the company: sponsorship, isolation, and informal networks.

Intel has also established partnerships with historically black colleges and universities to help the company improve recruitment and hiring of their graduates.

What’s Next

Along with the employee representation milestone, Intel is also on-track to meet their supplier diversity goal of spending $1 billion with minority- or women-owned businesses by 2020. Last year, the company spent $650 million with diverse suppliers.

Intel is moving slowly toward progression goals, seeing small gains for Latinx and Native American employees among the company’s leadership last year.

“We strive for leadership parity because if you achieve your leadership progression goals, knowing that the research supports that diverse managers actually hire diverse employees, it drives your ability to sustain the results,” Whye said. “So that’s a very important metric for us.”

She recently added VP and director of business HR for Intel’s client and Internet of Things division to her title. She’s joining this part of the business because their progress on diversity goals has been the slowest.

The next goal? “Take the burden of the system off of the diverse employee and work together to address the system’s issues head on,” Whye said.

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