In 2020, calls for racial and social justice and pressure on businesses to become more diverse, equitable, and inclusive were reinforced. As a result, many US firms expanded and launched new diversity, equity, and inclusion (DEI) initiatives. However, a sizable proportion of US employees (22 percent), particularly racially and ethnically minority employees (up to 34 percent), believe that corporations have not done enough.
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This response indicates that, despite firms' attempts to eliminate racial and ethnic imbalances by publicly criticizing those inequities, vowing to improve workforce diversity, organizing staff training and conversations, and more, employees are not experiencing the full intended effects. Of course, some of this discontent may be explained by the length of time it can take for initiatives to have a quantifiable impact. Nonetheless, our survey findings should urge executives to consider whether their current approach to DEI is laying the groundwork for substantial growth.
Diversity and inclusion aren't just for high-performing banks in good times.
Creating an equal and inclusive environment entails more than just assembling a diverse staff. Employees from underrepresented groups require assistance and opportunities as part of a comprehensive plan that spans their careers.
“Companies want a strategy that portrays DEI as a must-have rather than a nice-to-have.”
We understand that inclusion must complement diversity if businesses are to establish a workforce and culture that benefit from diverse inputs and experiences. However, inclusion is also strongly tied to an organization's structural equity. If the procedures and structures that support the day-to-day experience within businesses do not give underrepresented employees an equitable advantage, such employees may struggle to be their genuine selves at work. In short, inclusion without equity is ineffective. In addition, a lack of workplace equity deprives a company of the full potential and contributions of its racially and ethnically minority employees.
Organizations want a systemic approach that drives meaningful change within their organization, one that pushes each employee to recognize that attaining inclusion and fairness produces value for companies and possibilities for employees across the board. Companies want a strategy that portrays DEI as a must-have rather than a nice-to-have.
WHAT WE LEARNED ABOUT RACIAL AND ETHNIC DISPARITIES AT WORK
Our study assessed employees' opinions of workplace challenges as well as their own experiences on the job. We discovered that perceptions differed depending on race. White employees had a stronger sense of inclusion and equity at work than members of minority groups. For example, while 72 percent of white respondents agreed with the statement "My company's values are inclusive and respectful of my identity," the proportion among underrepresented groups was lower: 68 percent of Asian respondents, 67 percent of Latinx respondents, and 60 percent of Black respondents.
METHODOLOGY
It is apparent that racially and ethnically underrepresented groups perceive the workplace differently than their white peers. There is also a variation in their perspectives on organizational challenges. As a result, we questioned survey respondents whether they believe their firm faces diversity and inclusion challenges in recruitment, retention, progression, and leadership.
White employees were much less likely to say that their organization faces diversity and inclusion challenges in each of those four criteria. Furthermore, when we confine the emphasis to white, cisgender, heterosexual men at least 45 years old—the demographic breakdown most likely to define people in leadership roles—the difference between members of racially or ethnically underrepresented groups and white employees is exacerbated in all four domains. In practice, this means that leaders aren't now aware of hurdles or the proper urgency to overcome them and aren't in a position to take action to overcome them.
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About Jim Woods
Jim Woods is president of Woods Kovalova Group where he founded the firm in 1998. WKG is a global consulting firm that works with financial industry professionals to solve their most pressing problems and seize their most promising possibilities by breaking the cycle of racial inequality. Jim was recognized as one of the “Most Influential Blacks in Corporate America.”
Jim’s education and work experience have given him expertise in many aspects of the financial sector. He has 25 years of diversity, equity, and inclusion consulting experience, primarily in retail and business banking.
Jim holds deep expertise in organization and banking strategy development. Jim earned a master’s degree in organizational development and human resources from Capella University.