Fortune 500 firms have been scrambling to hire chief diversity officers in response to racial justice protests in the year since George Floyd's death — but just filling that seat isn't enough.

The big picture: Companies' top diversity executives too often lack the power or resources to affect real change, and many get frustrated, leading to constant churn. But firms will have to figure out the role of CDO if they want to attract new talent and customers, experts say.

• "If you want to be a competitive company in ten years, you have to have this role," says Mita Mallick, an expert on diversity and inclusion at corporations.

By the numbers: Diversity job postings are surging.

• The number of people with the title "head of diversity" jumped 104% from 2015 to 2020, per LinkedIn data. And the number of people with the "chief diversity officer" title increased 68% in that same period.
• The U.S. is still behind other nations, with 0.73 diversity and inclusion employees for every 10,000, compared with the U.K.'s 1.93 and Australia's 1.04, according to LinkedIn's analysis.

But, but, but: The role of CDO — and the field of diversity and inclusion — is still a new one. And those stepping into the job face hurdle after hurdle.

• “You’re dealing with polarizing topics, and these topics and issues are very nuanced," Joy Fitzgerald, the CDO of Eli Lilly, told the WSJ. "There are not a lot of best practices you can point to that are easy or quick.”
• Often, CDOs lack access to the CEO or other executives, which makes it difficult for them to do their jobs. And many of them have difficulty getting the data they need to pinpoint issues within companies.

“It can‘t just be about HR,” says Anuradha Hebbar, the former head of diversity at Verizon who now leads the consulting firm Kincentric’s DEI practice. “It’s the whole business strategy,” from making sure the firm‘s culture promotes equity to making sure the company is marketing to consumers in an inclusive way.

• “The changes CDOs have to make are systemic. And they’re often met with resistance when trying to do that,” Hebbar says. As a result, many CDOs find themselves running one-off diversity trainings for staff, which don’t accomplish much.
• Top companies, like Morgan Stanley, have had CDOs leave and express frustration over not being able to affect change.
• "When you have this expectation that this one person is going to come in with a magic wand and fix this, it’s a lot of pressure," Mallick says. "One person and one person alone can’t do it."

The bottom line: Putting diversity and inclusion officers in the C-suite isn't just the right thing to do, diversity experts say. It's also a business necessity.

• The purchasing power of Americans of color has swelled to $4 trillion, Mallick says. And companies that don't hire diverse workforces will fall behind when appealing to an increasingly diverse population of consumers.

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