We're sitting here three years nearly after the
murder of George Floyd, a time when many companies in
response pledged over $50 billion to address diversity
and racial equity issues.
How is that going?
What have the diversity pledges actually encouraged
these companies to do?
Shelley joins us now to talk a little bit about
that.
Sharon, thank you for having me and for covering this.
We are seeing relatively low unemployment, but we're also
seeing headline-grabbing numbers of some massive
layoffs, particularly at some major tech companies,
but other major companies as well.
And I'm wondering how these layoffs are impacting Black
workers and are impacting the diversity equity
inclusion efforts that some of these companies have put
forth.
It is certainly a challenging period that
we're entering. I mean, you're seeing the layoffs
get announced not only in tech, but you're seeing it
across sectors. I am concerned that as we go into
any sort of a downturn or softness, that some of the
work around diversity, equity and inclusion and
certain populations will be hit disproportionately.
And I'm worried because that's historically been
what has materialized.
The interesting thing about tech, for better or for
worse, is it will certainly impact Black workers, but
one of the things that I've been most concerned about
with respect to the job market and Black Americans
is we have been underrepresented in tech
historically, which is not a good thing.
But it may mean that in tech, maybe Black Americans
won't be hit disproportionately.
TBD, but I think the underrepresentation there is
the more important theme.
And how do we ensure that in this down
cycle we are still thinking about
ways to increase representation as we think
about emerging from this thing on the other side.
On this great attrition comment, I think there's a
couple of themes that I'd pick up.
One is the frontline worker piece of it.
We know that Black Americans
disproportionately occupy frontline jobs.
Many of these folks were the essential workers in the
pandemic who frankly were out doing the hard work so
that many of us could have the basic goods that we
needed to get through the pandemic.
But we also know that historically there's been
challenges with wages, with predictability of
scheduling and with benefits.
And so you've seen very high attrition rates in many
of these frontline jobs, particularly in retail.
And what it ultimately means is the companies
who can think about designing the frontline
job in a way that is truly reimagined actually
will outperform because we know attrition has all sorts
of direct and indirect costs. Those who have the
courage to stay in the arena, commit to what I
think is pretty hard to disagree with, which is
inclusive growth is better for companies, better for
society, better for our global economy and our
domestic economy.
I think folks that stick to that, I think will emerge on
the other side stronger.
Shelley, what is the number one thing that many
companies did after the murder of George Floyd in
terms of making these pledges?
What did they say they were going to do and what has
been done?
There's really two sides of the pledges that link to
what happened with the murder of George Floyd and
Breonna Taylor and many others.
The first is companies made in many cases pretty
ambitious pledges with respect to diversity in
their own institutions.
So they looked at the population across different
levels from entry level all the way through to senior
executives and made commitments to frankly do
better, particularly later in the funnel.
So that's one piece of it.
The second piece is what I'll call looking outside of
the window of the company, which is, how do we use our
capital and our assets to help address broader
systematic inequality.
So how do we in some ways lift the floor where some of
the employment stuff is often about raising the
ceiling? Corporations have to take direct action in
both of these things in terms of proactively
managing their internal diversity funnel and
understanding what representation looks like
throughout and having the right programs and anti-bias
design embedded in their processes so that they can
do that work internally.
And then, again, looking out of the four walls of
their company, they also need to be thinking about
what are the direct investments that we can make
in the communities that we work in and that we serve to
help advance equity directly. And so we have
seen the amount of dollars committed to racial
equity continue to increase since 2020.
We did an accounting of it in December of 2020 and had
found that around $66 billion had been publicly
announced in terms of investment in this cause.
And then if you kind of fast forward to six months
ago, the number was closer to around $340 billion.
So you continue to see the ramp up of commitments.
And I think a couple of things that I would note
with respect to that.
The first is what are people committing to?
And they're committing to things like using money to
support affordable housing.
You see dollars flowing across the list of human
development needs that are very acute in the Black
community. And so I think in many ways the pledges are
targeted in the right areas.
The second piece of it then becomes how well are
companies following through on the deployment?
And a couple of observations there.
One, I do want to acknowledge that it's pretty
early in the journey.
The second thing is, while a lot of these pledges were
well intentioned and remain well intentioned, it has
been challenging to actually meet these
ambitious goals to deploy this capital.
Fostering more dynamic and competitive small
and medium business ecosystems is a
win-win for all parties.
You are bringing more entrepreneurs into the fold
and unleashing through capital to support their
innovation and their ability to compete for
business. You are finding opportunities where you can
localize your supply chain.
We know that that is important to be thinking
about in the context of what happened with Covid-19.
We also know that to the extent that you are
fostering diverse suppliers, that's going to
disproportionately benefit diverse workers because we
know that there's some relationship there in terms
of diverse businesses and what their workforce looks
like; it tends to be more representative of the
population. And that's the biggest lever that
corporations have to directly impact society
other than wages.
Being thoughtful about how we encourage
entrepreneurship in all parts of this country is a
way to build stronger and more resilient supply
chains, foster wealth creation in
a broader set of pockets in the economy, and support
diverse workers who tend to be either on or
underemployed at higher rates.
We really appreciate you joining us today.
Shelley Stewart from McKinsey.
Thank you, Sharon. Thank you for having me.