Salesforce.com, Inc. is in the Pax Global Women’s Leadership Index and is a holding in the Pax Ellevate Global Women’s Leadership Fund.
Salesforce, a U.S. customer relationship management company, has identified equality as a core value and recognizes that diverse companies are more innovative and better positioned to succeed. This approach is supported by a substantial amount of research, including the company’s own Equality Impact Report, and research from Morgan Stanley, which found that tech firms that make an effort to boost gender diversity can generate significantly better returns than their less diverse peers. In support of its commitment to equality, Salesforce is taking action across four key areas—equal rights, equal pay, equal education and equal opportunity—and providing regular updates on its progress.
Mercer has found that organizations that conduct a rigorous pay equity review are more successful in building diverse representation. Salesforce was among the first companies in the U.S. to publicly recognize pay equity as a key component of its overall diversity efforts. Despite initial skepticism from Salesforce’s CEO that a pay gap could exist at the company, its first analysis resulted in pay adjustments for 6% of employees (both men and women), and it spent about $3 million to close the gap. In 2017, Salesforce expanded its analysis to include both bonuses and salaries, as well as race and ethnicity. The result? A second adjustment for 11% of employees, again at a cost of approximately $3 million. The results of the company’s third analysis in 2018 required a further $2.7 million to address unexplained pay differences between gender, as well as race in the U.S., for 6% of employees.
Through these ongoing analyses, Salesforce is gaining greater insight into drivers of pay and working to address the underlying factors that contribute to pay inequities, which aligns with recent guidance from Mercer indicating that pay equity is best achieved through changes in practices that prevent gaps from arising in the first place. Further, CEO Marc Benioff has become a vocal champion for equal pay, calling on other CEOs to take action, and has joined forces with industry groups like the Employers for Pay Equity Coalition and endorsed the Paradigm for Parity Pledge.
Women comprise 37% of Salesforce’s executive team, and the number of women in leadership positions increased by 34% in 2017, trending positive for the third consecutive year. To drive further progress, Salesforce launched a company wide Inclusive Hiring process to standardize and reduce biases in hiring practices and committed to interviewing at least one woman candidate or underrepresented minority for executive positions. To ensure leadership is engaged in the firm’s diversity efforts, Salesforce created a diversity scorecard, which is sent to its executive team on a monthly basis with their diversity numbers and progress.
Salesforce is also active in the communities in which it operates, by adopting schools, volunteering in classrooms, promoting STEM education, and creating job training programs. Most recently, the company announced the Salesforce Pathfinder Training Program, a workforce development program that seeks to address the skills gap by providing participants from diverse backgrounds with the technical and business training needed to obtain jobs within Salesforce.
Taken together, Salesforce’s actions are significant. Boston Consulting Group recently found that factors like fair employment practices (such as equal pay), participative leadership with different views being heard and valued, a strategic emphasis on diversity led by the CEO, frequent and open communication, and a culture of openness to new ideas are key in developing diversity, and in turn, driving innovation.
As of 6/30/18, salesforce.com, Inc. was 0.5% of the Pax Ellevate Global Women’s Leadership Fund.
The statements and opinions expressed are those of the author of this report. All information is historical and not indicative of future results and subject to change. This information is not a recommendation to buy or sell any security.