Every year, Redfin reports on our workforce diversity. This report reflects our company’s focus on racial, ethnic and gender diversity, but other forms of diversity are also important to Redfin’s success: age, political opinions, sexual orientation, military service, mental health, physical ability and differences in learning and perception. Our latest report has been delayed because of the pandemic and a Redfin furlough; because of the delay, we’re including 2020 data through June 1, and comparing it to data from 2019 and 2018 through June 1.
Representation of People of Color Continued to Increase Modestly
The good news is that over the past two years, the percentage of Redfin employees who are people of color has increased, from 30% to 31%, due to an increase in the representation of both Black and Hispanic employees.1 In our 2018 diversity report, we shifted the focus of our diversity strategy from gender to race and ethnicity, so it’s reassuring to see that representation by race and ethnicity has improved modestly since then.
Representation Much Higher Than Industry Averages
The representation of people of color in Redfin’s field organization is much higher than the real estate industry average, while representation on our software-development team is similar to big tech companies like Facebook, Google, and Microsoft.
Race & Ethnicity, Redfin Employees at All Levels
|% People of Color||% Black, African-American||% Hispanic, Latino||% Asian|
Still Underrepresented Compared to U.S. Population
The bad news is that people of color, and especially Black and Hispanic people, are still under-represented at Redfin compared to the overall U.S. population. Even worse, people of color were 9% more likely to leave Redfin in 2020 than the average employee; Black employees were 36% more likely to leave. Black-employee attrition is our most serious diversity challenge; we discuss our plan to address it below.
Underrepresentation in Management is Our Biggest Diversity Challenge
One reason people of color may leave is to pursue promotions elsewhere. People of color were underrepresented in Redfin’s management ranks in 2020, compared to the overall population but also compared to the number of Redfin employees overall; this has been especially true of Hispanic employees.
Race & Ethnicity, Redfin Managers
|% People of Color||% Black, African-American||% Hispanic, Latino||% Asian|
Most of Our Employees Are Women
Women are well-represented at Redfin. This is true even in technology development, at least compared to the rest of the technology industry. Women and men are about as likely to leave Redfin.
Representation of Women, All Redfin Employees
Most of Our Managers Are Men
But despite modest gains over the last two years in the field organization and on our technical team, women in management are still underrepresented at Redfin, especially compared to their overall representation at the company.
Representation of Women, Redfin Managers
A Results-Driven Approach to Diversity
The simplest measure of Redfin’s inclusivity is the likelihood that people of color and women will come to Redfin and then, most important, will stay and flourish as managers and executives. The results we’ve presented in this report show that Redfin still isn’t as inclusive as we want to be. The reason I’m the one writing this post as Redfin’s CEO is because creating a fair, inclusive work environment is one of my primary responsibilities as a CEO. The rest of this post is about what we’re doing to create a more diverse company next year.
Executive accountability: We’re tying 25% of 2021 executive bonuses to increasing the representation of people of color at Redfin, especially in management roles. Since Asians are well-represented outside of our field organization, we’ll exclude Asian representation from targets for business operations and technology development. We’ll set preliminary targets in July 2020 so that executives embrace our goals now; since we already canceled 2020 executive bonuses because of our April employee furlough, execs won’t have any money at stake until February 2022, when we pay bonuses based on 2021 performance.
Likely elimination of customer surveys in promotion decisions: We’re re-evaluating how we use customer surveys to promote agents; one reason surveys were originally instituted was to limit manager bias, but some customers may also let bias influence their responses to our surveys. Too many Redfin agents of color report meeting customers who seem disconcerted on realizing their agent isn’t white, especially for a home search in predominantly white neighborhoods. Later this month, when we get data on survey results segmented by the race of the agent, we’ll make a decision on whether to exclude surveys from promotion decisions.
Inclusive management training: In January 2020, we trained our field managers on inclusive management practices, so a manager is more likely to be proactive and comfortable addressing bias in the workplace rather than ignoring it, regardless of whether the bias comes from customers, colleagues or the manager herself. Managers in business operations and technology development will get this training in August. Our goal isn’t just to avoid bias, but to create a welcoming environment for employees of all races, sexual orientations, genders and ages.
Serving customers of color well: Also in January 2020, we trained all Redfin employees on recent data showing widespread bias among lenders and real estate agents, to ensure we serve all customers fairly. This was similar to an all-hands event we hosted in 2018. We’re also focused on how we can broaden the range of homes we sell. Already, we’ve steadily increased the percentage of online inquiries handled by Redfin agents rather than our network of partners, from 63% in 2017 to 66% in 2019; because of the sharp recovery following the pandemic and a layoff, there will be a sharp decline in this number in 2020, but our long-term goal is to serve more customers with our own agents.
Pay transparency: Starting with the merit review in the fall of 2018, we told 55% of headquarters employees in select departments what the pay for their role was, and what the pay for the role one level up was, so each employee could see for herself if she was above or below the median for her role. The remaining 45% of headquarters employees are expected to have pay transparency with the fall 2020 merit review. For field employees, pay has long been determined by a compensation plan, so the only significant source of variance is based on the employee’s performance and location. In 2018, we forbade hiring managers and recruiters from asking for a prospective employee’s pay history, since this can perpetuate pay biases that started at a previous employer; in some states, this was required by law, but Redfin made it our policy across the U.S. and Canada.
Accountability in earnings calls and board updates: We’ll report on diversity in quarterly board meetings and, starting July 30, in earnings calls. The board already has gotten diversity updates before, but will now get a standard report every quarter. Earning calls will increase our accountability just because the calls are public, and the data assembled for these calls benefits from the highest levels of rigor and executive attention at Redfin. Some investors evaluate a company’s diversity as part of a broader assessment of our sustainability.
Increasing executive and board diversity: Starting in June 2020, we set up a mentorship program for board members to participate in the development of employees into executives, which should help to increase the diversity of our exec team. We’re also recruiting a new board member, which is likely to increase the diversity of our board; that process should be complete later this year. Our biggest leadership-development challenge is in creating broad-based mentorship and management-training programs; a director responsible for these programs left Redfin last fall, then the position wasn’t filled because of a March hiring freeze and an April furlough; we now expect to replace that person by September.
Diversity-focused hiring: In our 2018 diversity report, we promised to diversify hiring slates, so that for some roles, at least one of the candidates we interview must come from a group that is underrepresented in that role. We slated 6% of field roles in November 2019. For slated roles, 41% of the eventual hires were people of color, compared to 27% of hires for the un-slated roles. Based on these promising results, we’re now slating 100% of management roles, 100% of individual contributor roles in business operations and technology development, and 30% of all field roles. Starting in 2018, our technology development organization was more aggressive about recruiting for diversity, often by focusing recruiting efforts for three months or longer on institutions and organizations favored by people of color. The idea behind these “focus requisitions” is to develop recruiters’ capability and confidence at finding candidates outside the typical networks. Our April furlough and layoff was a setback to this effort, as the class of college graduates set to join us this summer was our most diverse yet, and we ended up rescinding many of their offers due to the pandemic. But the pandemic has also persuaded us to be much more aggressive about recruiting candidates who don’t want to live in Seattle or San Francisco; that flexibility, coupled with the rapid growth of our Dallas headquarters, will probably do more to diversify Redfin’s technology development and business operations teams than any other initiative; with executive hiring in particular, it has been hard to persuade Black candidates in other cities to move to Seattle or San Francisco.
The Way Forward
Some of the data in this report is sobering. We’re making progress, but it’s too slow, and we’ve failed to retain and develop as many people of color as we should. Redfin has talked about racial diversity and social justice more than any major broker in our industry; we’ve recruited more people of color than our industry peers, and our engineering team in particular has invested in diversity for years.
But Redfin’s programs haven’t kept pace with our intentions, and as your employee population grows, programs matter much more than good intentions: for training people, for bringing discipline to pay and promotion decisions, for recruiting people from new networks. The execs are dismayed at ourselves that we haven’t done better; I’m dismayed at myself.
It’s not as if success is unimaginable or even unattainable: some Redfin teams, often some of the highest-performing teams, have gotten diversity almost completely and gloriously right. Seeing those teams fills me with pride, and true joy.
I hold on to that feeling so we can repeat it. I still remember when, at my first startup, we got our first big sale. I knew better than anyone what a fluke it was, but a board member said: “if you can do it once, you can do it a hundred times.” And so we did. Now the challenge faced by our business, and all American businesses, is to bring that level of determination, conviction and ingenuity not just to product development and sales, but to the fundamental question of who we are and how we treat one another.
2 The field organization includes people who work in our brokerage, mortgage, instant-offer, renovations and title businesses; it also includes employees who support Walk Score and our partner agents.
3 Our business-operations organization includes people in marketing, brand design, communications, analytics, business development, finance, legal, human resources, recruiting, program management, information-technology support, and facilities. This business-operations group also includes people who report to the president of field operations but in strategic roles defining brokerage policies and compensation plans.
4 The software-development team includes software developers, testers, product managers, product designers and employees who study how consumers interact with our website and mobile applications.
5 We do not have U.S. Census data or data from the National Association of Realtors for 2020.