Racial DEI in the Workforce

As of 2019, Black workers accounted for 15 million, or 12%, of the 125 million US private-sector workers, and the overall Black labor force, including the entire private sector, public sector, and the unemployed looking for work, was 20.6 million.[1]? According to McKinsey, companies and other stakeholders will need to address ten key challenges to create opportunities for Black workers in the US private-sector economy: ?higher unemployment for Black workers compared with other workers; geographic mismatches between Black workers and opportunity; underrepresentation of Black workers in faster-growing, higher-wage industries; underrepresentation of Black workers in higher-wage jobs; underrepresentation of Black workers in the most in-demand jobs; the disproportionate impact of technology and future of work trends on Black workers; a double broken rung with lower odds of advancement and higher attrition for frontline and entry-level jobs; low Black representation in executive levels; a trust deficit among Black employees toward their companies; and a lack of managerial sponsorship and allyship for Black employees.[2]

A May 2021 article in The Washington Post reported on research that found that “[f]or Black workers, age discrimination is highest for the youngest, falls in middle age, and rises once more as workers near retirement”.[3]? The insights were based on experiments conducted at Texas A&M University and data from the Department of Labor independently reviewed by The Washington Post that confirmed the “Black workers are typically less likely to be hired than White workers with the same experience, but the gap closes in middle age”.? According to the article, this pattern of discrimination explains why unemployment among younger Black workers remained distressingly high (the highest levels of unemployment for any demographic according to the article), which means that White workers start their careers with a tremendous advantage in the workforce and eventually leads to wide disparities in accumulated wealth between typical White and Black families in America later in their lives. ?In fact, economists generally agree that discrimination against Black workers over the course of their working lives results in their having few assets and income in retirement, pushes them into lower-quality jobs and makes them more likely to leave the labor pool entirely.

According to statistics from the US Bureau of Labor, in January 2021, nine months after the bottoming out of the labor market in the wake of the pandemic, Black and Hispanic or Latino Americans still represented the highest share of job losses with unemployment rates of 9.2% and 8.6%, respectively, compared with 5.7% for their white counterparts.[4] ?Among the problems confronting Latino workers was they disproportionately worked in the sectors most heavily affected by the pandemic recession (i.e., food preparation) and that they were less likely to hold managerial positions and thus were reliant of jobs with low wages, no benefits and little stability.? The situation was especially problematic for Latina workers, since they were even more overrepresented in those sectors and subject to dual discrimination based on both gender and ethnicity.? In fact, the Center for American Progress noted that “Latina workers have seen the worst employment data of any racial/ethnic and gender group during the coronavirus-induced recession”.[5]

In 2020, FSG, PolicyLink and JUST Capital published a “blueprint” for chief executive officers on the steps that the public believed they and their companies can and should be taking to promote racial equity in their workplaces, in the communities in which they operate, and in society at large.[6]? The blueprint began by calling on companies to look inside their workplace and heed the views of more than 80% of Black Americans who believed that companies should be paying a living wage, committing to diverse hiring and apprenticeships, and creating a diverse supplier pipeline.? The blueprint recommended that companies “design antiracist policies that create racial equity through workplace policies, products, and supplier relationships” and identify, review, and modify existing policies and practices on wages, benefits and access to capital that may be disproportionately impacting Black and Brown stakeholders and communities in an adverse fashion.? Specifically, companies should commit to human resources policies and practices that are actively antiracist, not merely “not racist”; expand the power and voice of all workers, not just people of color; design products and services with an eye toward achieving racially equitable outcomes; and design operations and supply chains with the goal of achieving racial equity.[7]?

Companies should act immediately to take stock of where they stand in terms of diversity among the members of the workforce. ?To determine where to prioritize the steps necessary to improve fairness and equality throughout the organization, companies need to collect data relating to recruiting, promotions, salaries and other issues that can be used to identify situations in which the company’s practices may be biased.? Surprisingly, many companies do not track the necessary data, which means that their leaders may not understand that problems exist with respect to workplace diversity or gender and racial gaps in pay.? This is not a simple process at the very beginning because it will require going back in time to assess many employment-related decisions including decisions made by people who are no longer with the company.? As the data is collected steps should be taken to create a permanent system so that performance can easily be tracked and measured in the future.?

At the same time the information described above is being collected the company should analyze the skill sets of the current group of employees and the skills and experience that the company would ideally like to have throughout its workforce.? This is important because the drive toward greater diversity must be aligned with the business needs of the company.? Companies cannot sustain their drive toward diversity unless they either focus their recruiting efforts on underrepresented groups that have the skills and experience that the company requires or commit to providing people of color (and everyone else in the company) with the training and other support necessary for them to be successful in their professional development with the company.? The company should also work to have a better understanding of the relationship between its customer base and the diversity of its workforce.? It is important to have a diverse workforce that mirrors the customer base, which means ensuring that core business units such as product development, marketing, sales and customer service include employees who can raise concerns about discriminatory, exclusionary or insensitive actions in their areas and in the company’s training and external messaging (e.g., advertisements that are racist or culturally inappropriate). ?In addition, increasing diversity in the workforce allows the company to credibly pursue new business opportunities that advance racial equity by recognizing and serving the specific needs of markets of color and avoid products or services that are discriminatory or exclusionary towards gender of race.

Achieving and maintaining diversity and inclusion in the organization is a challenging project and requires a plan that can be used to guide the company through the necessary steps and establish milestones that can be referred to in order to assess whether the measures taken have had the desired and expected impact.? A diversity and inclusion plan should begin with a statement of the company’s mission, namely growing a diverse workforce in an inclusive work environment, and an affirmation of the company’s commitment to the fundamental values of diversity, equality and inclusion.? The plan should then set out specific strategic goals with respect to diversity and inclusion, such as assembling a workforce that reflects all segments of society, establishing an inclusive and engaged organizational culture, promoting diversity in the company’s supply chain and participating as a contributor and advocate in community-based efforts to promote social justice, equality and economic wellbeing.? Each goal should have several specific objectives (e.g., with respect to achieving diversity in the workforce, one of the objectives should be eliminating institutional barriers to equal employment opportunities) and strategies for achieving each objective.? Finally, the plan should incorporate metrics that can be referenced to track performance for each of the objectives and the company’s overall progress toward achieving its goals relating to diversity and inclusion.? In order for the plan to be relevant and effective it needs to be based on solid information collected and analyzed in advance relating to the company’s current diversity and inclusion profile and the specific concerns of the company’s employees, customers and other stakeholders.? The company should prioritize its goals and objectives giving greater weight to initiatives that address the most immediate problems and/or are likely to have the strongest immediate positive impact on improving diversity and inclusion.

An article in The Economist included suggestions from consultants on how best to create an effective diversity strategy for African Americans in the workplace.? They noted that while investing in skills development programs to improve the competitiveness of employees of color was useful, companies should not rely on traditional arguments of meritocracies to resolve racial inequalities inside organizations, suggesting that forces of systemic racism were too strong inside most companies.? They argued that the better answer to the problems was to explicitly focus on race in diversity and inclusion efforts, taking care not to dilute the plans by lumping race in with gender and other issues.? The consultants recommended creating a diversity strategy specifically for black employees that included clear and consistent standards, goals and targets for promotion and attraction.? Responsibility and accountability for the strategy should be placed in the hands of the CEO, not offloaded to outside consultants or a chief diversity officer, and if goals and targets are missed there need to be explanations.? For example, if promising African American managers are leaving the company, an assessment needs to be made as to whether they were provided with sufficient mentoring and clear and fair feedback on how they could further their professional development.[8]

Companies can do a number of things to expand diversity in the recruitment pool including focusing on local communities, dramatically expanding the size of internship programs and committing to setting aside a significant portion of the slots to young people of color and providing them with mentors and support and a clear path to full-time employment in jobs that come with real development and progression opportunities and increasing recruiting at historically black colleges and universities.? Internship and similar programs can be particularly important and impactful if they are credibly broadened to promote diversity and provide opportunities for people who do not meet the traditional educational requirements; however, care should be taken to ensure that such programs are not used as a means for avoiding fair compensation and benefits.? A number of new programs were announced in the wake of the outcry following the death of George Floyd including Visa’s commitment to create a $10 million fund for college-bound students and guarantee jobs to those students who satisfied certain requirements.

Other important recommendations to companies seek to democratize the recruitment process by eliminating questions on employment applications and testing that disproportionately exclude people of color (e.g., “felony convictions” and testing for use of marijuana and other drugs not required by law or the nature of the job), eliminating college degree requirements for jobs that do not actually require higher education and developing hiring, mentoring and training programs for young people of color without high school degrees and thus at higher risk for unemployment.? The initial goal of these changes is to bring more people of color into the workplace; however, the jobs in question are typically entry level and thus not necessarily optimal from a long-term perspective and it is therefore important to be sure that these jobs come with a living wage and are accompanied by eligibility for other skills development and educational programs sponsored by the company.? For example, companies should commit to support all of their employees who do not have a high school diploma in their efforts to complete their coursework and then provide them with counseling and financial assistance relating to additional education.

Recruiting and retaining people of color should be part of a broader initiative to increase diversity throughout the organization.? The chances for success in a diverse world are enhanced when a company is able to call on the experiences and viewpoints of different races, religious backgrounds, genders, nationalities and physical abilities.? A diverse workforce is a fertile ground for innovation and new ideas and can lead to the company being recognized in the marketplace and communities as a credible champion of diversity and economic equality. ?Achieving diversity will require attention to several types of strategies and tactics.? For example, companies will usually need to expand the geographic scope of their recruiting activities in order to reach groups that may be underrepresented in the current workforce.? Changing and maintaining the organizational culture of the company is also essential so that workers from “different” backgrounds feel welcome and accepted once they join the company.? This will require that companies provide diversity training and opportunities for workers from different backgrounds to work together. ?In particular, companies need to focus on retention to ensure that their diversity initiatives do not stagnate, which means taking special care to regularly engage with women, people of color, workers with disabilities and older workers to identify and understand potential problems before people decide to leave the company.? Also important is seeking and achieving diversity among the holders of senior positions in the company, which not only expands the lens used for strategic decisions but also provides workers at lower levels with role models within the company and a sense that the company is open to supporting their professional development goals through promotions.

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Recruiting Strategies for Equality and Diversity

·?????? Create a company equality, diversity and inclusion (“EDI”) policy and explicitly integrate EDI into the company’s mission statement and external communications

·?????? Expand the scope and diversity of the company’s recruiting efforts and promote the company’s commitment to EDI to potential candidates

·?????? Initiate equal pay policies across the organization and make sure they are always applied in the interview process and when job changes/promotions occur (i.e., no negotiations or exceptions)

·?????? Make initial candidate screening a blind screening and have a structured interview process that includes a diverse group of employees

·?????? Ensure that onboarding, initial training and the first months on the job are smooth for all new hires

·?????? Develop and implement specific hiring practices for veterans and to avoid ageism

·?????? Provide socioeconomic assistance to supplement salaries to assist employees with achieving a viable standard of living (e.g., affordable housing option and employee cafeterias)

Workplace Strategies to Improve Morale and Inclusivity

·?????? Publish signage and notification of EDI policies and keep company language gender-neutral

·?????? Have open lines of communication where EDI issues can be discussed and improved upon

·?????? Provide sensitivity and unconscious bias training and training on team building and communications styles

·?????? Support the creation of affinity groups within the company and encourage management involvement with those groups

·?????? Allow groups, or the company, to do community outreach and encourage management involvement with outreach activities

·?????? Initiate corporate-wide culture change for diversity and inclusion

·?????? Ensure diversity among participants in all company committees and working groups and inclusivity in the processes of the processes of such committees and working groups

·?????? Bring in third parties to observe interactions in the workplace and solicit input from external stakeholders (e.g., customers and community members)

·?????? Instill a PTO day for voting

·?????? Proactively make reasonable allowances for religious practices in the workplace

·?????? Hand out health and wellness reimbursements and offer tuition reimbursement and support for continued education

·?????? Offer flexible PTO and reasonable opportunities for remote working and telecommuting

·?????? Provide subsidized child care or on-site daycare for parents or those with guardianship of children and offer wide ranging healthcare options to cover those with domestic partners or who have the care of elder relatives

·?????? Facilitate employee mentorship programs

·?????? Have a formal and transparent process for moving up in the company and provide career development for employees with varied backgrounds

·?????? Have regular company meetings to keep everyone informed and up-to-date on happenings, and get a pulse of the company

·?????? Offer flexible parental leave for new parents

·?????? Offer mental health resources

Source: Adapted from 55+ Ideas to Promote Inclusion and Workplace Diversity in 2020 (February 28, 2019).

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To learn more, download the author’s chapter on Embedding Diversity, Equity, and Inclusion.

Notes?

[1] Race in the workplace: The Black experience in the US private sector, McKinsey (2021), 7 (based on data from the Bureau of Labor Statistics of US Census Bureau).

[2] Id. at 10 (also noting: “On the current trajectory, it will take about 95 years for Black employees to reach talent parity (or 12 percent representation) across all levels in the private sector.? Addressing the major barriers that hold back the advancement of Black employees could cut that duration to about 25 years.”).? McKinsey surveyed 24 companies in size from 10,000 to 1.4 million US employees and across all geographies, representing a total of about 3.7 million US employees.

[3] A. Van Dam, “For Black workers, age discrimination strikes twice”, The Washington Post (May 14, 2021).

[4] Latinos Face Disproportionate Health and Economic Impacts From COVID-19, Center for American Progress (March 5, 2021).

[5] Id.

[6] A CEO Blueprint for Racial Equity, PolicyLink and JUST Capital (July 2020).

[7] Id. at 4-5.

[8] The great awakening?, The Economist (June 13, 2020), 49.