Today’s post comes to us from Dr. Jarik Conrad, vice president of human insights at UKG and executive director of The Workforce Institute.
As Americans prepare to celebrate Martin Luther King, Jr., Day on January 16, I have been reflecting on the fact that this year marks the 60th anniversary of the March on Washington, where Dr. King delivered his famous “I Have a Dream” speech to more than 250,000 attendees. Such a notable milestone begs the obvious question: How much progress have we made over the past 60 years?
In trying to answer this question, let’s address the two objectives of the mass nonviolent protest (it’s often overlooked that the official title was the March on Washington for Jobs and Freedom). Assessing the second objective first, freedom is still elusive. Blacks comprise 13% of the U.S. population, yet represent a staggering 38% of incarcerated citizens. But that is a blog for another day.
On the second objective, jobs, Blacks must still overcome significant barriers to reach equity in employment and income. Last year closed with a December unemployment rate of 2.9% for whites, compared with 5.3% for Blacks. In 1964, the figures were 4.6% and 9.6%, respectively. Lest you believe that a nearly double rate of disparity in employment has persisted for more than 60 years due to lack of effort, consider that at every level of education the gap is evident. At lower education levels, for example, Blacks with an associate degree have a higher rate of unemployment than whites who haven’t graduated high school.
Less than a high school diploma | High school graduates, no college | Some college or associate degree | Bachelor's degree and higher | |||||
Total | Some college, no degree | Associate degree | Total | Bachelor's degree only | Advanced degree | |||
White Unemployment | 7.3 | 5.3 | 4.6 | 4.9 | 4.2 | 2.8 | 3.1 | 2.2 |
Black Unemployment | 15.2 | 9.9 | 7.6 | 8.0 | 7.0 | 4.4 | 4.9 | 3.5 |
The same unfortunate pattern holds true for wages, with Blacks earning less than their white counterparts at every level of educational attainment. Notably, a white high-school graduate earns more than a Black person with an associate degree. In other words, education has not been the “great equalizer.”
Despite the increased attention to diversity, inclusion, equity, and belonging (DEI&B) in corporate America, the higher the job level in an organization, the greater the disparity in attainment between Blacks and whites. Blacks represent a mere 5.9% of all chief executives in the U.S., including just over 1% of Fortune 500 CEOs, despite a recent study indicating that the market capitalization of companies with a Black chief executive increased within three days of the CEO announcement. The market reaction is a consequence of the fact that Black CEOs are appointed with more years of education, advanced degrees, and elite education than a comparable group of white CEOs. Merit matters, but it matters a whole lot more if you are Black.
The Business Case is Not Enough
The market reaction to the appointment of Black CEOs is just one of many examples arguing a strong business case for DEI&B. My friends at Great Place To Work have mounds of data indicating that the most successful companies prioritize and embrace DEI&B — in good times and bad. These data are compelling executives and investors to launch companywide diversity programs and double-down on their public relations messaging.
Researchers have found that 80% of Fortune 500 companies use some form of business case as the rationale for valuing DEI&B, compared with just 5% that use a fairness case, touting the importance of equity and equal opportunity. This may be a mistake. While the business case may resonate in the C-Suite, it doesn’t inspire Main Street. For Blacks to experience significantly more progress over the next 60 years than the past 60 years, it will require more than the business case for DEI&B. The fairness case does a better job at that.
Yet neither approach — the business case nor the fairness case — resonates with underrepresented job candidates as much as a neutral approach, which doesn’t provide a justification for why DEI&B is important in the same way that organizations don’t provide a detailed justification for why they value qualities such as trust, innovation, and integrity. The neutral approach recognizes the inherent value of all humans. Prioritizing DEI&B isn’t a tactical or strategic business decision like a merger or an acquisition. Human beings aren’t widgets. We aren’t new products or services. It’s the human case for DEI&B.
We Need Accountability in the C-Suite
Every successful business has become successful in a society where racial bias and discrimination are still persistent. While business leaders may not have caused these issues, they are part of a system that perpetuates them. The demographics in large corporations today are shaped by past and present racism and discrimination. Leaders must start to invest their time and energy into understanding these issues, if they genuinely care about their employees and customers. According to Harvard Business Review, a first step for leaders is to learn about how systems of privilege and oppression — racism, sexism, ethnocentrism, classism, heterosexism — operate in the wider culture.
Black people endured 246 years of torture and terror that robbed them of their physical and psychological freedoms and denied them the opportunity to attend school, learn, read, write, and think aloud. The business case to initiate and maintain slavery required the inhuman treatment. Blacks continued to be legally denied opportunities, including educational opportunities, because of their skin color for another 99 years, until 1964, when the landmark Civil Rights legislation was passed a year after the March on Washington for Jobs and Freedom. The business case then was to “go with the flow” and not anger many white employees, customers, and investors.
What is most shocking is that Black people still experience stark disparities in many aspects of their lives, including public education, housing, and financial services. Take the wealth gap, for instance. Black people owned one half of 1% of the national wealth in 1863 when the Emancipation Proclamation was issued, and today it’s just over 1.5%. Much of this gap can be traced back to decades of government-sanctioned redlining that made obtaining housing difficult for Blacks and severely diminished the worth of their people’s homes, especially post-WWII, when the G.I. Bill was used by millions of white veterans to purchase homes at low interest rates. The wealth disproportionately generated during this period was transferred intergenerationally.
Today, Black families are not only less likely to own a home, but, according to the Brookings Institution’s Hamilton Project, Black homeownership “yields lower levels of assets.” Among homeowners, Black families’ median home value is $150,000, compared with $230,000 for white families. According to the Federal Reserve, in 2019, the median net worth of white families was $188,200 — 7.8 times that of their Black peers, at a mere $24,100. This wealth gap causes other disparities, such as business ownership, which is heavily influenced by individual and family wealth.
The funding of publication education, meanwhile, is responsible for a talent pipeline gap. The wealthiest 10% of U.S. school districts spend nearly 10 times more in funding than the poorest 10%, with spending ratios of 3:1 common within states. “Stark differences in funding, teacher quality, curriculum, and class sizes” are in place, the Brookings Institution reported, yet “the prevailing view is that if students do not achieve it is their own fault.”
As for employment, Blacks are still judged by their skin color in hiring decisions. “Even among well-intended employers,” Harvard Business Review reported, “racial bias may lurk in hiring decisions. … Whether conscious or not, bias continues to affect decision making, and we find little evidence that this pattern will diminish.”
A Day in the Life
If employers are to become truly employee centric, they will have to address the brutal realities of many Black employees’ lives outside of work, as well as inside the company. When their employees leave work, they may drive home to communities that are neglected. They may pick up children from under-resourced and inadequate schools. They may be victim of humiliating and traumatic racial profiling while driving or shopping at a store. When they arrive at home, they may be paying a mortgage with a higher interest rate than charged their white counterparts with the same credit score.
The Government Can’t (and Shouldn’t) Do It Alone
Much of the public expects businesses to take an active role in addressing social issues, viewing the media and government as divisive forces in society. Business leaders have an outsized influence in daily life in America far beyond the products and services they deliver. They influence politicians through funding political campaigns. They shape and reshape the culture through messaging and advertising. From the sports and entertainment industry to food and beverage, they don’t merely respond to human behavior — they drive human behavior. These leaders must accept some accountability for DEI&B at work and in the society where their businesses have thrived. They must use their considerable influence to rectify cruel injustices that continue to marginalize Black people, tramping the ideals of Life, Liberty, and the Pursuit of Happiness.
This month, The Workforce Institute Weigh-In addresses the critical topic of pay equity and, more specifically, working to “close the gap.”
The Workforce Institute Weigh-In for March 2022: “What do organizations need to prepare for as they actively move to tackle the pay-equity challenge?”
“Well-run organizations need to be prepared for the fact that there is probably not gender pay gaps. Organizations with effective compensation teams have spent decades addressing unfairness in gender pay. Hopefully, by now, they will have fixed those problems. This creates its own challenge because the PR message you want to give is, ‘We found an inequity and fixed it,’ and not, ‘We have managed comp in a professional way so that there were no inequities.’” — David Creelman, chief executive officer, Creelman Research
“The principles of compensation and total rewards can be tricky, so organizations need to partner with experts in this field. It’s easy to ‘fix’ one aspect of total rewards and unknowingly create another problem at the same time. If your organization doesn’t have a compensation expert on staff (and many don’t), reach out to your local SHRM or WorldAtWork chapters to find one.” — Sharlyn Lauby, author, HR Bartender blog
“Tackling pay equity is actually a great opportunity to partner human and machine talent in a technology-driven, ‘human in the loop’ process. It’s well-known that AI (artificial intelligence) algorithms can assist in setting pay in a way that eliminates subjectivity and removes bias. However, given how closely managerial input on performance reviews (for instance) is tied to pay, we cannot remove people from the equation and are more likely to achieve greater pay equity if we leverage both resources.” — Alexandra Levit, author, Humanity Works
“Tackling this challenge requires a multistep strategy. In addition to addressing systemic cultural issues, here is what one might need in order to prepare for this journey: 1) Ensure a genuine buy-in from the C-suite to address this challenge. 2) Obtain the organizational data that identifies and validates specific positions and people where the gap exists. 3) Create a financial model for the best-case scenario, where addressing 100% of the gaps is the stated goal. 4) Develop a priority listing and timeline to apply the fixes. This timeline might span more than one budget cycle, depending on the funds needed to apply the fixes and available resources. 5) Examine and revise structural components of pay policies to mitigate creating future gaps, and include budgetary components. Finally, check your work, and validate that the fixes you applied and that the modified structural components actually addressed the current pay-equity issues and will help avoid future issues.” — Dennis Miller, assistant vice president of HR and benefits administration, The Claremont Colleges
“Organizations must be prepared to spend a considerable amount of money initially and every 3-5 years to address issues of pay equity. The initial review of pay for equity will reveal inequities to correct, and the natural course of hiring, terminations, and other employment changes will create gaps every few years that will have to be addressed. Correcting pay equity costs money. There’s no other way out.” — Sarah Morgan, chief excellence officer, BuzzARooney, LLC
“Organizations will be faced with the critical challenge of right-sizing pay, not only within their organization but against competition. With more and more states pushing for pay transparency, employees will not simply ask, ‘What does my coworker make?’ They’ll be asking, ‘Why don’t we pay as well as [insert competitor]?’ Be ready to tackle pay equity with agility, candor, and an honest look at your organization and where it falls in the greater competitive landscape.” — Joey V. Price, co-host, While We Were Working podcast
“You can’t tackle the pay-equity challenge unless you are willing to do both a data and a behavioral audit to understand behaviors, policies, and practices that define your organization up to this point. The data audit is the easy part. The easy part is to look at the numbers and see where gaps occur. The harder challenge is to look backward, understand how you got there, and create a plan of action moving forward to prevent and address future inequities in your company.” — Laurie Ruettimann, host, Punk Rock HR podcast
“When working to correct the salary gap, be sure to watch out for pitfalls, especially from an HR or legal perspective. It is important to calculate the gap first, and then figure out how to fix it without ballooning your wage bill, while maintaining the incentive structure and avoiding the creation of new legal liabilities.” — Ivonne Vargas, author, ¡Contrátame! (Hire Me!)
Today’s post comes to us from Workforce Institute Executive Director, Dr. Chris Mullen, Ph.D., SHRM-SCP, SPHR and includes a conversation featuring Workforce Institute board members John Frehse and Sarah Morgan.
It’s time for another episode from the “Leadership in the Labor Shortage” series (also known as “No Suits, No Slides”), and I’m pleased to be able to join the conversation again. We filmed this episode while in Las Vegas at the UKG Works conference last month.
This time around, I join Workforce Institute advisory board members John Frehse, senior managing director at Ankura, and Sarah Morgan, chief excellence officer at BuzzARooney, LLC, as well as the returning Shawn Miles, senior managing director of social impact and community engagement at Ankura.
In this episode, we discuss why organizations should care about belonging, diversity, equity, and inclusion — beyond just doing the right thing for their people, and society as a whole. We talk about how organizational diversity should be a “must have” — not a “nice to have” — for every organization, no matter the size or industry. This is a crucial conversation that we must continue to have, as we all take action to make meaningful differences for people everywhere.
If you missed any episodes from the “No Suits, No Slides” series, you can view the entire lineup of episodes via the links below.
Episode 1: Hiring, Turnover, and the Economy
Episode 2: Where Did All the Workers Go? How Can We Get Them Back?
Episode 3: How Meaningful ESG Drives Performance: Part One
Episode 4: How Meaningful ESG Drives Performance: Part Two
Episode 5: Showing Gratitude for the Frontline Workforce
Episode 6: What Can Organizations Do About the Ongoing Labor Shortage?
Today’s post comes to us from Neil Reichenberg, former executive director of the International Public Management Association for Human Resources (IPMA‐HR).
MissionSquare Research Institute released a report highlighting the importance of diversity, equity, and inclusion (DEI) for public organizations, along with the multiple DEI-related challenges facing the government workforce. The report concludes that “Workforce diversity can pay dividends for the organization, in terms of the trust it can help build with the public — whether in education, healthcare, public safety, housing and community development, or other fields. When area residents see themselves reflected in the public service workforce, hear from those agencies in their own languages, or feel listened to about their community concerns, there can be a more effective partnership for problem solving, and a more relationship-based pipeline to recruiting the next generation of employees.”
Among the DEI challenges discussed in the report are:
The report contains several suggested actions that public sector organizations could consider. This includes: appointing a DEI officer; evaluating current staff diversity and identifying areas within the organization where there is a need to take steps to increase the diversity; developing creative recruitment strategies to enhance knowledge of the myriad career opportunities that are available, in order to attract a more diverse applicant pool; ensuring there is a regular process to obtain data on employee engagement, satisfaction, and issues around DEI; creating an inclusion program that assists employees in connecting with employee resource groups, mentoring programs, and sponsorship opportunities to enhance their connection with the organization; and considering equity during policy discussions, so that differential treatment of protected classes or workforce segments can be eliminated.
Studies have demonstrated the organizational benefits that result from having a diverse workforce, and this is especially important for the public sector, which needs the trust and involvement of its citizens. As the pandemic has shown, governments provide critical services and need to be able to compete for top talent. In a tight labor market, governments need to be proactive to ensure they can recruit, develop, and retain needed talent. While hiring a diverse workforce is a key first step, it’s also important for employees to be treated equitably and feel that they are an integral part of the organization. DEI should be an organizational priority and not just the responsibility of the diversity officer.
Today's post comes to us courtesy of board member, David Creelman.
It seems hard to believe, but according to the U.S. Bureau of Labor Statistics, there are now more women than men in management, professional and related occupations in the U.S. (51.6% women, 48.4% men).
Take a moment to ponder - and appreciate - the magnitude of that change from thirty years ago. And after that moment of appreciation, it's time to get back to thinking about our priorities for inclusion.
What's next? Pick the right priority.
There are three broad goals of inclusion:
Here are some options for addressing those inclusion issues:
Looking ahead
Strange as it sounds, diversity departments in the future may need some kind of affirmative action to bring men into management and professional jobs. Currently 56% of university graduates are women and if the downward trend in education for men continues then this could eventually undermine gender diversity in organizations.
Photo courtesy of rawpixel.com
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