To solve a problem, you need to understand it. That’s why McKinsey recently embarked on an extensive research effort to characterize Black Americans’ experience in the US workplace. We analyzed data from the US Bureau of Labor Statistics, the US Census Bureau, the US Equal Employment Opportunity Commission, and other sources. We augmented that analysis with data from 24 companies representing 3.7 million US employees, learning about the employee experience of those people through interviews, focus groups, and surveys.
The scale of the issues facing Black US workers is massive, and the roots of the problem are deep. As a recent article explained, “Inequality is baked deep into our current capitalist society.”1 Many researchers see the challenges as rooted in the socioeconomic and racial history of the United States.
We believe that companies that hope to make meaningful progress face ten key challenges. Achieving equity for Black workers in the private sector requires addressing the challenges on many fronts, including geography, industry, job type, and everyday workplace and culture challenges. Given the scale and complexity of the challenges, companies will need to work together to see material changes. And they will have to act more boldly than they have done in the past.
The impact of greater access to opportunity and advancement would be far reaching for the 15 million Black US workers currently engaged in the private sector. The challenges and the opportunities we outline are developed in greater detail in the full report of our research, Race in the workplace: The Black experience in the US private sector. Our hope is that companies and other stakeholders will use our work as the basis for the development of initiatives to accelerate progress toward a more diverse labor force and an inclusive and equitable private-sector experience for Black workers—and all workers.
Note: This story covers 8 of these 10 challenges. “One move companies can take to improve diversity” covers point 2 and point 3.
Black workers have higher unemployment, lower wages, and worse prospects than other workers
The challenges facing today’s Black US workers are immense. Almost half of that group are in three industries that have a large frontline-service presence (healthcare, retail, and accommodation and food service). The concentration of Black workers by industry has a direct impact on a wide range of factors, including wages, career advancement, and the risk of displacement because of economic disruption.
While healthcare is a growth industry, almost half of all Black US healthcare workers in 2019—941,000—were service workers, while fewer than 500,000 were executives, managers, and professionals. Many of those frontline jobs pay less than $30,000 a year, a category where, once again, Black workers are overrepresented.
Black US workers tend to be underrepresented, on the other hand, in industries with higher-wage, in-demand jobs, such as architecture, finance, and law. The systemic nature of that imbalance is exhibited by the fact that Black workers are less likely to be employed than are their counterparts in similar age groups or with equal educational attainment. Making matters worse, the prospect for Black workers in the decade ahead are also challenging. Prior research by the McKinsey Global Institute suggests that automation will put frontline jobs at risk.
The pipeline at work is broken, resulting in paltry representation at the most senior ranks
Black US employees hold a disproportionate share of frontline jobs and make up a representative 12 percent of entry-level jobs at the companies that participated in our research. But they are hobbled by a “broken rung” on the corporate pipeline: they aren’t promoted from entry-level to managerial positions at the same rate as others. That broken rung, combined with higher attrition rates among Black employees, means that companies often lack Black leaders and miss out on the known benefits of diversity. Those employees who do become managers rarely reach the very top levels. One exception to the trend: corporate boards are doing a better job of bringing in Black leaders—some 11 percent of the directors at our participating companies are Black.
Not surprisingly, Black workers describe a significant trust deficit at work
When it comes to acceptance, authenticity, and values, Black US workers and their counterparts see their companies quite differently. Black employees often don’t feel that their employers value and embrace diversity, the system for evaluation and promotion is fair, and they can be their full selves. The result: a trust deficit between companies and their Black employees.
That deficit transforms the workplace experience. For instance, many focus-group participants described relationships between Black employees and others as “transactional” and perceived that sharing their experiences as Black employees could have negative consequences. Their perception that hiring, performance management, and promotions aren’t fair contributes to feelings of “working twice as hard” and promotions being overdue versus well deserved. Research describes an “emotional tax”—a heightened feeling of being different that has detrimental effects on health—that Black employees experience at work. Sponsorship and allyship can diminish that feeling, but only one-third of Black employees report having even one sponsor.
Despite all this, Black employees find meaning, purpose, and accomplishment at work
Despite all the challenges Black US employees face in the workplace, they overwhelmingly say they are helping their companies succeed. They also report that their work gives them a sense of purpose and accomplishment. Companies can build on such sentiments, despite the middling success of previous efforts. Even minimal improvements could start to show results, and there are several no-regrets actions that any company can take.
Business leaders should ask questions of their companies’ efforts. What is the representation of Black workers in the company and in the communities where it operates? What unique capabilities does the company have? How can the company create a more welcome, supportive environment for its frontline and entry-level workers? Do the company’s employees genuinely care for one another?
That introspection can be accompanied by work with stakeholders and other companies. Advancing racial equity in the workplace is a system-level challenge, ranging from the structural inequities of geography to behaviors in the workplace. As a report from the Racial Equity Institute puts it, “Our systems, institutions, and outcomes emanate from the racial hierarchy on which the United States was built. In other words, we have a ‘groundwater’ problem, and we need ‘groundwater’ solutions.”
