Business Review

Executive Summary

One of the biggest risks to a company’s reputation is a tone-deaf advertising campaign. PR practitioners need to be keenly attuned to what their brands’ strategies are and how their campaigns can be perceived by stakeholders and a broader audience — but they’ll be hard-pressed to do so if they don’t become more diverse and inclusive themselves. However, racial and gender representation in the industry remains skewed. Interviews with 18 CEOs of top global PR agencies reveal some of the ways they’re responding to the intensifying spotlight on diversity and inclusion. Many agencies have made progress reassessing their recruiting efforts, and are now working toward developing more-inclusive work cultures.

HBR Staff

Over the last year, there has been no shortage of avoidable PR nightmares for leading corporate brands. In January, fashion retailer H&M came under fire for an advertisement featuring a young black boy in a green hoodie bearing the words “coolest monkey in the jungle.” Last year Pepsi faced criticism for its ad featuring Kendall Jenner and imagery from the Black Lives Matter movement, as did Dove for an ad on Facebook that depicted a black woman turning into a white woman. Most recently, Heineken faced pressure to withdraw its ad featuring the slogan “Sometimes, lighter is better.”

One of the biggest risks to a company’s reputation is a tone-deaf advertising campaign. PR practitioners need to be keenly attuned to what their brands’ strategies are and how their campaigns can be perceived, but they’ll be hard-pressed to do so if they don’t become more diverse and inclusive themselves.

However, racial and gender representation in the industry remains skewed. According to the Bureau of Labor Statistics, the ethnic makeup of the PR industry in the U.S. is 87.9% white, 8.3% African American, 2.6% Asian American, and 5.7% Hispanic American. The Holmes Report published in 2015 found that while women make up 70% of those employed in the U.S. public relations industry, they make up only 30% of agency C-suite executives. And while some progress has been made in advancing women to leadership and board positions, the pay gap between men and women in PR is $6,000 on average (even when tenure, job type, education, field of study, location, and ethnicity are held constant). The pay gap between whites and nonwhites is even wider — an average of $9,000 a year. Hispanic and Latina women in PR can expect to make $45,910, on average, as compared with the $55,212 their white female counterparts make, holding the same variables constant.

What seems to be changing is that clients are mandating more diversity and inclusion on their accounts. Today, many requests for proposals (RFPs) require organizations to demonstrate the effectiveness of their diversity and inclusion initiatives. For example, last September, after HP conducted a one-year media audit of its agency partners, CEO Antonio Lucio publicly admonished Edelman, ranked as the top public relations agency in the world, for lacking racial diversity and inclusion.

Some leading agencies have made changes. For example, Barri Rafferty of Ketchum was appointed the first woman global CEO among the top 10 public relations agencies. Edelman made Lisa Ross, who is black, president of the company’s Washington, DC office. And earlier this month WPP, the parent of Burson-Marsteller and Cohn & Wolfe, named Donna Imperato the CEO of the newly merged agencies, Burson Cohn & Wolfe.

To understand what else the PR industry is doing in response to the intensifying spotlight on diversity and inclusion, I interviewed 18 CEOs who lead firms in the top 100 Global PR agencies. Thirteen of the CEOs were men and five were women; 17 were white and one was Latino. I found there wasn’t even consensus on the meaning of diversity and inclusion. For instance, four of the respondents defined diversity to specifically include gender equality, while nine defined it to include only race and ethnicity. Half said that the LGBTQ community was part of their inclusion efforts, but only a few mentioned other issues related to inclusion, such as age discrimination, accommodating people with disabilities, and addressing socioeconomic disparities in the workplace.

The majority of the CEOs conflated inclusion with diversity — only six of them addressed inclusion specifically. While many recognized the importance of changing recruitment to create more-diverse workforces, only a few recognized that hiring a diverse staff would not guarantee a sense of inclusion among those hired. For example, Padilla CEO Lynn Casey told me that inclusivity is “where the rubber meets the road, not only checking the box and getting x people of color, but also making them feel welcome and making sure we understand and celebrate each other.”

A lack of inclusion can sometimes be seen in employee surveys. One survey conducted by the E3 Taskforce, a group made up of U.S.- based PR agency professionals across five major U.S. cities, found that 87% of white employees felt they had a clear path for advancement, while 53% of nonwhite respondents indicated they did not. Another survey of minority PR professionals in the U.S. found that four in 10 believed that they had to be more qualified than Caucasian employees to succeed. In the same study, many cited microaggressions in the workplace as a prevalent issue, especially for African Americans, that undermines an environment of inclusiveness.

The CEOs also told me that retention of diverse talent was particularly challenging. This is consistent with the E3 Taskforce survey finding that employees in PR who don’t experience a sense of belonging inevitably leave by the midlevel mark. Most agencies admitted they were focused on attracting diverse talent but had not been dedicating resources to establishing an inclusive culture. While many agencies have informal mentoring programs in place, most CEOs acknowledged they need to offer more formal training, mentorships, and sponsorships. Four of the CEOs I talked to cited the lack of diverse mentors and role models in senior level positions, which they believe contributes to the problem.

My interviews suggest five things PR agencies can do to become more diverse and inclusive and to better serve their clients: (1) Open up recruitment by broadening access to employment and by fostering relationships with colleges to build a pipeline of talent; (2) strengthen internal culture by conducting bias training throughout the organization and investing resources in formal on-boarding, training, and mentoring, with an emphasis on sponsorship of diverse employees; (3) enlist the support of middle management to communicate how team diversity boosts organizational performance; (4) monitor the turnover of diverse staff to make sure they are not leaving at disproportionately high rates; and (5) set inclusion goals and track progress toward them.

As companies in the U.S. are investing more in diversity and inclusion, the spotlight is now on PR agencies to keep up. This is a defining moment for firms around the world to ensure their clients understand their audiences and their changing demands. That starts with embedding diversity and inclusion into their own values.