Race in the workplace: The Black experience in the US private sector
4 likes19,154 views
The document discusses the disparities faced by Black employees in the U.S. private sector, highlighting that it could take approximately 95 years to achieve talent parity at managerial levels without significant improvements in representation, promotion, and hiring practices. Key challenges include higher unemployment rates, geographic mismatches, underrepresentation in high-wage industries, and a trust deficit between Black employees and their companies. Addressing these barriers could reduce the timeline to 25 years for achieving better representation of Black workers in managerial roles.
Race in the workplace: The Black experience in the US private sector
- 1. CONFIDENTIAL AND PROPRIETARY Any use of this material without specific permission of McKinsey & Company is strictly prohibited Race in the workplace: The Black experience in the U.S. private sector 22 February 2021 Copyright © 2021 McKinsey & Company. All Right Reserved.
- 2. McKinsey & Company 2 Introductions Moderator Gayatri Agnew Senior Director Walmart Foundation James Manyika Chair and Director, McKinsey Global Institute Senior Partner McKinsey & Company Lareina Yee Chief Diversity, Equity & Inclusion Officer Senior Partner McKinsey & Company Mahlet Getachew Managing Director, Corporate Racial Equity & Legal PolicyLink Carlos Rangel Vice President and Chief Investment Officer W.K. Kellogg Foundation Rick Tetzeli Editorial Director McKinsey Quarterly Amy Goldfinger Senior Vice President, Talent Development Walmart
- 3. McKinsey & Company 3 The basis of our research perspective Part 1: US private sector Part 2: Participating companies Analysis of Black employee representation, advancement, and inclusion 25k Employees provided responses to the Employee Experience Survey which includes McKinsey’s Inclusion Assessment 50+ Black employees participated in 90- minute focus groups 24 Large companies in the U.S. private sector participated in this research 3.7M+ People employed by participating companies Data sources include: Bureau of Labor Statistics – Occupational Employment Statistics (OES) and Current Population Survey (CPS), 2019 US Equal Employment Opportunity Commission EEO-1 data, 2018 The US Census Bureau American Community Survey (ACS), 2019 Comprehensive benchmark analysis of Black workers in the US private sector that analyzes: 125M Total workers in the US private sector 15M Black workers in the US private sector (12% representation) ~3k All counties across the United States
- 4. McKinsey & Company 4 On the current trajectory, it will take about 95 years for Black employees to reach talent parity across all levels in the private sector1 1. Talent parity = 12% Black representation as calculated for the entire US private sector; if the average promotion, attrition, and external hiring rates across the participating companies remain the same for all races, it would take about 95 years for managerial jobs (managers, senior managers, VPs, SVPs, and executives) to reach 12% Black representation overall. Source: Bureau of Labor Statistics Occupational Employment Statistics, 2019; US Census Bureau American Community Survey, 2019; Moody’s Analytics; Race in the Workplace 2021 Participating Company data set (representation, promotion, attrition, and hiring rates calculated as an unweighted average across companies in the data set
- 5. McKinsey & Company 5 Higher unemployment among 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 the executive levels A trust deficit among Black employees toward their company Lack of managerial sponsorship and allyship for Black employees Ten key challenges to create opportunities for Black workers 1 2 3 4 5 6 7 8 9 10
- 6. McKinsey & Company 6 1. Higher unemployment among Black workers compared with other workers 19.4M 20.0M 93.9% Black labor force employment rate, 2019 Total Black employment, 2019 Black employment if at parity to rest of labor force Black employment gap 96.7% Rest of labor force employment rate, 2019 Black employment # of Black workers Circumstances with the largest gap for Black employment rates Age Education attainment Previous incarceration Public sector share1 Closing the employment gap would result in 480,000 more Black workers in the private sector 0.5M Source: Bureau of Labor Statistics Current Population Survey and Occupational Employment Statistics, 2019; US Census Bureau American Community Survey, 2019 1. Total employment gap for the Black labor force (93.9%) in 2019 relative to the rest of the labor force (96.7%) is about 565,000 workers, of which about 85,000 are public sector and about 480,000 are private sector (based on a 14.6%-85.4% split)
- 7. McKinsey & Company 7 2a. Geographic mismatches between Black workers and opportunity Concentration of Black labor force, % share of total1 Source: Bureau of Labor Statistics Occupational Employment Statistics, 2019; US Census Bureau American Community Survey, 2019; Moody’s Analytics Almost 60% of the Black labor force (11.8M people) live in the South, compared to 1/3 of the rest of the private sectors Efforts to improve Black employment rates can have an outsize impact if focused on these states 1. Percentages do not sum up to 100% due to rounding AR
- 8. McKinsey & Company 8 2b. Geographic mismatches between Black workers and opportunity Projected net job growth by community archetype, 2017-2030 %, example communities in italics Black representation gap1, 2019 % Top 3 highest growth Black private sector workers, 2019 million 4.8M 2.7M 2.6M 0.6M 0.2M 1.2M 0.1M 0.5M 0.2M 0.9M 1.0M 0.4M <0.1M 13% 8% 11% -3% 6% 15% 11% 1% 9% 17% 8% 15% 3% Urban periphery Clayton County, GA Trailing cities Warner Robins, GA Stable cities Detroit, MI Megacities Chicago, IL Distressed Americana Coahoma County, MS Silver cities Prescott, AZ College-centric towns South Bend, IN Americana Findlay, OH Independent economies Harrisburg, PA High growth hubs Seattle, WA America’s makers Wichita, KS Small powerhouses Bend, OR Rural outliers Eureka County, NV 2.8% 2.6% 2.1% 1.9% -1.3% -1.8% -1.9% -2.7% -2.9% -3.0% -3.2% -6.5% -6.7% Fewer than 1 in 10 Black workers live in the counties with the highest projected job growth Source: Bureau of Labor Statistics Occupational Employment Statistics, 2019; US Census Bureau American Community Survey, 2019; Moody’s Analytics; The future of work in America: People and places, today and tomorrow
- 9. McKinsey & Company 9 3. Underrepresentation of Black workers in faster-growing, higher-wage industries Industries by Black representation % of Black workers, 2019 Overrepresented industries 8 most underrepresented industries Average Black private sector representation = 12% 15.4% 15.3% 14.7% 12.7% 12.7% 12.7% 12.2% 9.9% 9.8% 9.6% 9.0% 8.9% 8.5% 7.5% 6.5% Healthcare Professional services Finance Personal services Transportation Retail Administrative Accom. & food service Education Arts, entertainment, & rec Management Utilities Information Construction Mining Workers making >$30k/year, % 71% 81% 67% 36% 40% 21% 53% 95% 93% 94% 95% 95% 92% 97% 96% Nearly 50% of all Black workers work in 3 industries: • Healthcare • Retail • Accommodations and Food Service Source: Bureau of Labor Statistics Occupational Employment Statistics, 2019; US Census Bureau American Community Survey, 2019; Moody’s Analytics Bold indicates top 3 industries by Black worker concentration1 1. 3.1M Black workers in Healthcare (21% of all Black workers across industries), 1.9M Black workers in Retail (13%), 1.7M in Accom. and Food Service (12%)
- 10. McKinsey & Company 10 4 | 5. Underrepresentation of Black workers in the higher-wage and most in-demand jobs Source: Bureau of Labor Statistics Occupational Employment Statistics, 2019; US Census Bureau American Community Survey, 2019; Moody’s Analytics 1. ManpowerGroup Talent Shortage Survey, 2020: Skilled Trades, IT, STEM, Accounting and Finance, and Construction are among the top "hardest roles to fill" 25.2% 17.5% 13.0% 12.5% 12.1% 10.9% 10.8% 9.5% 9.0% 7.4% 6.6% 6.5% 6.2% 6.2% 5.8% 5.0% Sales and Related Healthcare Support Transportation and Material Moving Legal Educational Instruction and Library Life, Physical, and Social Science Computer and Mathematical Business and Financial Operations Arts, Design, Entertainment, Sports, and Media Management Construction and Extraction Food Preparation and Serving Related Architecture and Engineering Office and Administrative Support Production Healthcare Practitioners and Technical Overrepresented occupation groups with 1M+ Black workers Underrepresented occupation groups Mean annual wage $28k $38k $41k $27k $40k $84k $43k $58k $78k $94k $62k $110k $76k $122k $53k $89k Black worker representation by occupational group %, 2019 If workers were equally represented in jobs across wage levels, an additional 2 million Black workers would make $30,000 per year or more Bold indicates most in-demand jobs1
- 11. McKinsey & Company 11 6. The disproportionate impact of technology and future of work trends on Black workers The COVID-19 pandemic has affected Black workers, who are likely to work in high-contact, essential services, such as Psychiatric aides Orderlies Nursing assistants Cooks and restaurant workers Pharmacy aides Source: Bureau of Labor Statistics Occupational Employment Statistics, 2019; US Census Bureau American Community Survey, 2019; Moody’s Analytics; The future of work in America: People and places, today and tomorrow; The future of work after COVID-19
- 12. McKinsey & Company 12 7a. A double broken rung with lower odds of advance- ment and higher attrition for frontline & entry-level jobs Representation by role, by race1 % of employees 1 June 2020 snapshot, aggregated data across 23 companies 2 Other employees of color include Native Hawaiian or Pacific Islander, Indigenous (e.g., Aboriginal, First Nation, Native American), and people who identify as two or more races 3 VP = Vice President 4 SVP = Senior Vice President Average Black representation in the private sector = 12% Frontline representation is higher than 12%; entry-level is at 12% parity Source: Race in the Workplace 2021 Participating Company data set, McKinsey analysis (Average representation calculated as an unweighted average of representation by demographic group at participating companies) Frontline representa- tion for Black employees is higher than 12%; entry-level is at 12% parity Management level representation range from 4-7% for Black employees
- 13. McKinsey & Company 13 7b. Gender parity is closer for Black employees, with standout results among managers Source: Race in the Workplace 2021 Participating Company data set, McKinsey analysis (Average representation calculated as an unweighted average of representation by demographic group at participating companies) Black women represent 45% of all Black employees, compared to 34-37% for all other groups
- 14. McKinsey & Company 14 8. Low Black representation at the executive levels There are 3 current Black CEOs in Fortune 500 companies, but at parity, we would expect to see 60 Potential additional Black CEOs at 12% Black representation CEOs in the Fortune 5001 1. Black CEOs include: Roz Brewer, Marvin Ellison, Rene Jones. This does not include Ken Frazier and Roger Ferguson, Jr., who announced that they were stepping down in 2021 Source: “Where are the Black CEOs?” Fortune, February 4, 2021, fortune.com; Race in the Workplace 2021 Participating Company data set
- 15. McKinsey & Company 15 9. A trust deficit between Black employees and their companies Key challenge #9 It’s a transactional trust; we focus on getting the work done, but we don’t actually build genuine relationships. % of employees Agree that employees welcome diverse perspectives (diversity of thought, opinions, ideas, etc.) 80% 56% Black White Source: Race in the Workplace 2021 Participating Company survey (n = 24,842 employees), McKinsey analysis based on a representative sample of employees across all demographics at participating companies % of employees Agree that employees are treated fairly I don't share my life, because I feel that others are going to use it against me. 56% Black 77% White
- 16. McKinsey & Company 16 10. Lack of managerial sponsorship and allyship for Black workers I find myself lacking in getting the coaching. There’s been only one Black leader who has taken the interest in my advancement. I really think a lot of our allies just really found out what allyship means this year. Source: Race in the Workplace 2021 Participating Company survey (n = 24,842 employees), McKinsey analysis based on a representative sample of employees across all demographics at participating companies Key challenge #10 87% of companies report having a sponsorship program 33% of Black employees report having 1 or more sponsors 23% of Black employees feel ‘a lot’ or ‘quite a bit’ of support at their company to advance Access to sponsorship / support % of Black employee respondents
- 17. McKinsey & Company 17 Companies should take no-regrets actions internally Share best practices on effective programs Commit to continued investment and research Pursue collaborative efforts to galvanize collection action 1 2 3 4 5 … and collaborate to effect systems-change externally Define your company’s aspiration for advancing racial equity Understand your company’s current state of DE&I Strategically prioritize interventions Reinforce what works—and reimagine what doesn’t Track progress to increase accountability
- 18. McKinsey & Company 18 Addressing the major barriers that hold back the advancement of Black employees could cut that duration to about 25 years.1 1. Talent parity = 12% Black representation as calculated for the entire US private sector; if promotion, attrition, and external hiring rates were best-in-class at each level across the participating companies, it would take about 25 years for managerial jobs (managers, senior managers, VPs, SVPs, and executives) to reach 12% Black representation overall. Source: Bureau of Labor Statistics Occupational Employment Statistics, 2019; US Census Bureau American Community Survey, 2019; Moody’s Analytics; Race in the Workplace 2021 Participating Company data set (representation, promotion, attrition, and hiring rates calculated as an unweighted average across companies in the data set
- 19. Read the full report: http://www.mckinsey.com/raceintheworkplace