IPG reveals state of diversity within its executive ranks in leaked staff memo
Interpublic Group of Cos. CEO-Chairman Michael Roth released the breakdown of its workforce by race in an all-staff memo obtained by Ad Age that also addressed the holding company's need to better improve diversity within its walls.
The chart Roth shared compares IPG's minority makeup within its executive ranks to statistics within the overall sector, leaning on standards set by the U.S. Equal Employment Opportunity Commission. Roth noted that this is the first time IPG has shared this information.
According to the chart, only 2.6 percent of IPG's senior executives and managers are black or African American (compared to the sector stat of 2.4 percent); 5.5 percent are Asian (lower than the sector stat of 10.1 percent); 84.9 percent are white (higher than the sector stat of 82.5 percent); and 5.2 percent are Hispanic or Latinx (compared to the sector stat of 3.6 percent).
IPG says 4.3 percent of its first and mid-level managers are black or African American compared to the industry stat of 4.8 percent; 9.4 percent are Asian compared to the sector stat of 15.2 percent; 76.8 percent are white compared to the sector stat of 72.5 percent; and 7.1 percent are Hispanic or Latinx compared to the industry stat of 5.4 percent.
The chart shows that 7.2 percent of IPG's professionals are black or African American (slightly higher than the EEOC stat of 6.7 percent); 11.4 percent are Asian (lower than the EEOC stat of 18 percent); 68.7 percent are white (higher than the EEOC stat of 66.4 percent); and 9.2 percent are Hispanic or Latinx (compared to the EEOC stat of 6.3 percent).
"What you will see is that IPG is broadly in line with the sector—and you will also note that this is not a great place to be," Roth said in the memo, commenting on the chart. "We can all agree that we MUST do better."
He said "transparency has always been a core value at our company," but it isn't enough to effect change.
Roth said IPG has held calls over the past two weeks—"neighborhood chats with our people of color, calls with allies, support calls for parents, sessions with our CEOs," he said, noting that it is a "collaborative process to see what we can change, actions we can take that will have the biggest impact on the lives of our people."
Through those discussions, Roth said IPG determined it will be taking certain initial actions including continuing to review and right pay disparities across the company.
"When we find issues—and we have found them in the past—we correct them," he wrote. "I am committing to continuing these reviews with the goal of further improvements to our pay practices."
Roth said IPG also "heard there needs to be more accountability for our leaders." He said going forward CEOs will be held accountable for hitting "various goals related to the hiring, promotions and representation of people of color and women," and their compensation will be based on those goals.
He said IPG will also be investing more into its Business Resource Groups, like IPGLGBTQ+, that ensure "people never feel like 'there is no one else like me in my office.'" Roth committed to ensuring the creative that IPG agencies put out for clients is also always helping to "contribute to equity and must destigmatize people of color."
Roth also acknowledged in the memo the importance of the open letter, signed by 600 black agency professionals, that went out to U.S. shops this week outlining the list of actions they should take to achieve true equity for people of color in the industry. The letter was penned by Nathan Young, a group strategy director at Minneapolis agency Periscope, and Bennett D. Bennett, who runs independent consultancy Aerialist.
"This is a long game, and as the signatories of the letter point out, change must accelerate and be sustainable," Roth wrote. "As always, we will keep diversity, equity, inclusion and action at the core of IPG and part of our DNA."
Roth's full memo:
What has become clear – and appropriately so – is that when it comes to combatting racial injustice, people are looking for actions, not statements of support.
At IPG, we have been talking about diversity, equity and inclusion for over 15 years. Whether it has been at industry conferences, in interviews, in our Annual Report, in communications with you, in our investments in diversity programs – inclusion has been front and center at IPG for many years. However, we are now at a tipping point, when meaningful change and progress are being demanded to address a situation centuries in the making. As such, I wanted to take this moment to talk about actions IPG is taking to build on the progress we have made to combat systemic racism.
First of all, we’ve been listening to our own people in a new and more direct way. In the many calls we have hosted over the past two weeks – neighborhood chats with our people of color, calls with allies, support calls for parents, sessions with our CEOs – we have asked what we can be doing better, and you’ve let us know. We want this to be a collaborative process to see what we can change, actions we can take that will have the biggest impact on the lives of our people.
A key theme is to have more transparency. In many global markets outside the U.S., there are disclosure requirements about the composition of our workforce. That is not the case in the U.S., and none of the major holding companies, including IPG, have previously shared the breakdown of minorities in their executive ranks. Attached to this email is a chart that shows how many African Americans, Asian Americans and Hispanic Americans we have across the executive ranks of our company in the U.S., and how our breakdown compares to the sector. (Note that the sector data includes the advertising industry, as well as professional services like law firms, accounting firms and management consultants.)
The chart uses standards set by the U.S. Equal Employment Opportunity Commission. What you will see is that IPG is broadly in line with the sector – and you will also note that this is not a great place to be. We can all agree that we MUST do better.
Transparency has always been a core value at our company, and this new disclosure ratchets up the information we will share about IPG. That said, there are other industries, like the tech sector, that have shared this level of detail for their workforces and they have not seen significant change. So just being more transparent is not enough.
In recent years, IPG has hired third-party economists and statisticians to help us find possible pay disparities in our U.S. organization, against a broad set of criteria. Outside of the U.S., our agencies have been doing an analogous review for some time, against a specific set of criteria, as required locally. When we find issues – and we have found them in the past – we correct them. I am committing to continuing these reviews with the goal of further improvements to our pay practices.
We’ve also heard that there needs to be more accountability for our leaders.
We have, for some time, tied the compensation of our CEOs to various goals related to the hiring, promotions and representation of people of color and women. In hindsight, this accountability hasn’t gone deep enough into our organization, and that needs to change. Going forward, our ability to meet these goals (or not) will impact compensation for more of our business leaders.
There are people who believe that increasing diversity is a zero-sum game where some gain at the expense of others. That thinking is part of the problem we need to address, and our revised goals will also ensure that our talent management processes and results will be evaluated by how inclusive and equitable they are and whether they lead to meaningful progress.
We heard from you on our calls that while the culture of our company may embrace diversity, some managers struggle with how to bring it to life on their teams. We will invest time and resources to cultivate more inclusive leadership and management through learning and practical experiences, including support for all managers and human resources, to ensure we are allies and advocates for each other day-to-day.
On the calls, many referred to the Business Resource Groups that we have at IPG, including people in IPGLBTQ+ who wanted to be sure we brought a racial justice lens to Pride events this month. These groups are key for a company like ours, as they ensure people never feel like “there is no one else like me in my office.” We are planning to invest additional resources to help scale our Business Resource Groups, not just in the U.S., but globally. We will invest in technology to help increase the value of these groups, including hands-on learning to create supportive environments that work for everyone.
Another point we heard is that the creative product we produce for clients must always contribute to equity and must de-stigmatize people of color. As you know, IPG is a founding member of the UN Women Unstereotype Alliance, and our global Diversity, Equity and Inclusion group will continue to work with agencies – collaboratively and individually – on embedding processes with our people to ensure we continue to do just that.
This week, a courageous group of 600 Black industry professionals in the U.S. penned a letter to me and other leaders, demanding more urgency and focus to address the systemic racism that has plagued our industry. The requested actions are sensible, doable and consistent with a number of the steps outlined above, and in line with the global empowerment principles articulated by the United Nations, and which IPG signed onto this past March. These principles set out a measurable framework for sustainable equity and inclusion that works for society, talent and consumers alike. But the demands by our Black colleagues also make clear that the actions we have taken so far are not adequate.
This is a long game, and as the signatories of the letter point out, change must accelerate and be sustainable. As always, we will keep diversity, equity, inclusion and action at the core of IPG and part of our DNA.
I commit to you that we will continue listening, continue working, and continue to come up with innovative solutions to our industry’s problem. I know I can count on you to join me in finally making progress in these crucial areas.
As always, thank you for all that you do, and for your continued support.