Over the past year, the country began a long-overdue reckoning with racial equity and social justice. In response, private sector leaders stepped up as never before: According to the McKinsey Institute on Black Economic Mobility, U.S. companies made public commitments totaling more than $200 billion between May 2020 and May 2021 to enhance initiatives to combat racism, support Black communities and businesses, and promote racial equity.
This year of increased investments by companies, including Walmart and McKinsey, has been a positive step, but it’s not enough. The issues are deeply rooted in the country’s difficult past and have resulted in a set of systems that today are all too often unjust. It will take a sustained commitment and action to drive change, starting with owning our challenges, holding ourselves accountable, and humbly acknowledging that there is much more work to do.
Recent research that McKinsey conducted in collaboration with Walmart, the Kellogg Foundation, and Policy Link indicates that Black employees across the private sector lack equitable access to opportunity and advancement.
Consider that Black workers make up 12% of entry-level private sector workers—close to their representation among the overall private sector population. But representation plummets at the very next step of the corporate ladder, dropping to only 7% at the manager level. Our research found that at current employment rates, it would take about 95 years for Black employees to reach parity across all levels of the private sector. The professional and financial implications of this are manifold.
The challenges Black workers face mean that to reach our diversity and inclusion goals—which research tells us are business-critical—business leaders will need to take more sustained action to accelerate progress. Efforts should be focused at two levels: within the organization and in collaboration with other stakeholders.
Within organizations, addressing issues in three areas could help move the needle. First, companies need to look beyond simply hiring Black workers. While companies are hiring Black workers into entry-level jobs, a large portion of workers leave before they are promoted. Incentivizing additional support from managers to help integrate and support Black employees after they are hired could help ensure that newly hired Black workers have the tools, development opportunities, and direction to excel.
Next, focus on reestablishing trust. Our research revealed that Black employees do not feel that their company values and embraces diversity, that the system for evaluation and promotion is fair, or that they can bring their full selves to the workplace. To help restore trust, companies must provide more transparency into their evaluation and promotion processes and work to eliminate bias.
Third, companies can build systems to create opportunities for Black workers. According to our research, only 23% of Black employees believe they get “a lot” or “quite a bit” of support to advance. Sponsorship from leaders opens opportunities for workers at every stage of the career journey, helping workers gain visible jobs, projects, and promotions.
While sponsorship is not as common as it should be for any demographic, Black workers report some of the lowest levels of this critical support. More equitable sponsorship can help to ensure Black employees have the needed support for career advancement.
Such initiatives should improve outcomes, but may not fully solve the complex challenge our research documents. As business leaders, we must also recognize that the barriers facing Black workers are grounded in years of larger social problems, including segregation and disinvestment in Black communities. These problems are too large for one organization or entity to tackle. Instead, companies also need to work together to address the complex, structural barriers that too often impede the retention and promotion of Black employees.
To start, companies should actively share best practices on effective programs, either via public-private partnerships, public case studies, or private cross-company forums. Companies are frequently hesitant to talk about their efforts in diversity, equity, and inclusion for fear of criticism, but sharing successes and failures with other entities is potentially one of the best ways to help other organizations make progress. Forums and business communities can help amplify these insights, leading to dialogue that could spur innovation.
No one has all the answers to solve this highly complex challenge, and we at Walmart and McKinsey are still both on our own journeys to achieve greater racial equity. Despite all the existing research on Black workers in the private sector, we still need more insights and actions from companies, governments, experts, and academics to craft better solutions. We’re committed to continuing to investigate the root causes and systemic issues that result in poor outcomes for Black workers, along with how to scale successful programs, so we can begin to fill these gaps. We all must do much more.
We invite all companies to join us in the hard work needed to create a country where all workers, regardless of race, have access to the same opportunities in the workplace.
Donna Morris is chief people officer at Walmart.
Lareina Yee is a senior partner in McKinsey’s Bay Area office.
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