Study: 95 years needed for Black workers to reach talent parity
Addressing the major challenges facing Black workers will result in that number being lowered to 25 years, however.
Racial equity remains a top issue for U.S. companies, as business leaders increasingly acknowledge the systemic problems facing people of color in the workplace. A new report from McKinsey & Company does a deep dive into the realities of Black workers in America: they see lower pay, more job insecurity, and fewer opportunities for advancement than the average U.S. worker.
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The report looked at data from sources such as the Bureau of Labor Statistics and the US Census Bureau and concluded that Black workers face complex challenges in today’s workforce. According to the report, at the current rates of progress, it will take 95 years for Black employees to reach talent parity (or 12% representation) across all levels in the private sector. Addressing the major challenges facing Black workers will result in that number being lowered to 25 years, the report said.
Labor force mismatches
The report found that Black workers are under-represented in higher-paying jobs and industries. And they are over-represented in the South: almost 60% of the Black labor force—11.8 million people—is concentrated in that region, where job growth is lower.
In addition, Black workers are clustered in lower-paying industries. “Our analysis found that 45% of Black private-sector workers (approximately 6.7 million people) work in three industries that have a large frontline-service presence: healthcare, retail, and accommodation and food service,” the report said. “These industries also have some of the highest shares of workers making less than $30,000.” Overall, 43% of Black workers in the U.S. make less than $30,000 per year, compared with 29% of the rest of private-sector employees.
A broken ladder
The study found that Black workers make up 14% of all employees, but at the managerial level, the Black share of the workforce declines to 7%. Across the senior manager, VP, and SVP levels, Black representation is at 4% to 5%. The study said the data also suggests that entry-level jobs can be a revolving door for Black workers, with higher levels of attrition for those employees.
The study points to a “trust deficit” experienced by Black workers. “A trust deficit reflects Black employee perceptions of their workplace as less fair, accepting, and authentic,” the report said. “For example, Black employees are 23% less likely to receive “a lot” or “quite a bit” of support to advance, 41% less likely to view promotions as fair, and 39% less likely to believe their company’s Diversity, Equity, and Inclusion (DEI) programs are effective than white employees in the same company.”
Moving toward equity
The report said that there are bright spots in the labor market and new models emerging that companies can build on. “Our research uncovered pockets of progress on DEI programs and representation in different companies, which provides the potential for shared learning of best practices across companies,” it noted.
The study recommended the following actions that companies can take:
- Define your company’s aspiration for addressing racial equity—including steps to address structural barriers
- Understand your company’s current state of DE&I, taking into account industry and geographic contexts
- Strategically prioritize interventions
- Reinforce what works—and reimagine what doesn’t
- Track progress to increase accountability—and share successes
“Truly making progress will require more than addressing corporate policies; it calls for system-level change, an examination of our broader society, and active collaboration among companies and other stakeholders,” the report concluded.
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