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Advancing Racial Equity in the Workplace

Arlene S. Hirsch (SHRM)

07/16/2021

Racial bias in the workplace is annually costing U.S. businesses $54.1 billion in increased absenteeism, $58.7 billion in lost productivity and $171.9 billion in turnover, according to research from the Society for Human Resource Management (SHRM). Black employees are most at risk for experiencing bias, followed by Latino and Asian-American employees. However, even employees who don't directly experience bias are negatively impacted by observing others being treated unfairly.

"There has been a collective awakening as more people become aware of how pervasive discrimination and bias are," said Evelyn Carter, director of training and people development at Paradigm Consulting, which is based in San Francisco and focuses on diversity, equity and inclusion (DE&I). "We are at a pivotal moment when organizations must answer an important question: How will they restructure their workplaces to truly advance racial equity and inclusion?"

HR has a pivotal role to play in answering that question.

"Until there are systemic changes in the way our workplaces are structured, nothing will change," said Dorianne St. Fleur, a workplace inclusion strategist in San Jose, Calif. "All people processes, such as compensation, hiring, promotion and performance reviews, must be audited, reconfigured and measured regularly to ensure there is no disparity based on race."

Leadership Challenge

The SHRM research found that racial inequity is often perpetrated by supervisors, managers and senior leaders.

"Anti-racism is a core leadership competency," said Tim Cynova, co-CEO of Fractured Atlas, a New York City-based nonprofit arts organization committed to anti-racism and anti-oppression. "If you're a white leader and you're not personally engaged in learning and understanding racism and oppression, you're not doing your job."

Fractured Atlas' journey to becoming an anti-racist, anti-oppression organization began in earnest six years ago when it changed its values statement to reflect that commitment. The leadership team then created a diversity task force to assess the company's business model and culture in order to bring the organization into closer alignment with those values.

"What's so challenging is that there's no playbook for what we're trying to do," Cynova said. "It's an innovative process. We're trying to create a healthy organization where everyone can thrive that didn't exist before."

Joyce Smithey, a labor and employment attorney with the Smithey Law Group in Annapolis, Md., had this advice for organizations trying to advance racial equity in the workplace: "An important first step is for leaders to have an open and honest discussion about the issue and challenges of racial equity with their employees." The goal of these discussions should be threefold:

  • Identify problem areas.
  • Give an equal voice to minority employees and allow them to feel heard.
  • Help educate white employees about a problem they may not believe exists.

Talent Reimagined

A number of companies are changing their recruitment and hiring strategies in an effort to build more-diverse talent pipelines.

In its five-year racial equity plan, Best Buy committed to filling one out of every three new non-hourly corporate positions with individuals who are Black, Indigenous and people of color (BIPOC) and to expand representation throughout the company by providing leadership-in-training roles to BIPOC employees.

Since 2007, the Gap has been building its diversity pipeline through This Way ONward, a 10-week program that helps interns gain critical skills, confidence and work experience while the employees who mentor them simultaneously build leadership skills; 95 percent of program alumni are people of color.

Organizations also can build more-diverse talent pipelines by eliminating the race-based practice of rejecting qualified candidates who do not have four-year college degrees, diversity experts advise. Statistics compiled by Opportunity at Work, a Washington, D.C., nonprofit, found that nearly two-thirds of Black individuals and more than half of Hispanic individuals in the U.S. labor force are STARs (Skilled Through Alternative Routes).

Yscaira Jimenez founded LaborX, a Boston-based talent marketplace for STARs, as a way to connect hiring managers with graduates of vocational schools, boot camps, apprenticeships and community colleges using predictive skill analytics and 3D resumes.

"Many of the programs we source from support diverse demographics such as opportunity youth, veterans and immigrants who have the skills but lack the networks to connect to good jobs," Jimenez said. "LaborX believes in a world where everyone can contribute their skills and potential to the workforce, regardless of pedigree or social capital." The organization recently merged with Opportunity at Work.

Cascade Engineering, a 1,200-person manufacturing company in Grand Rapids, Mich., with a long-standing commitment to being anti-racist, launched its Welfare to Work program in 1993 with the goal of getting welfare recipients into manufacturing jobs at Cascade. However, the program was plagued by high turnover until the company partnered with social service agencies to provide child care, transportation and other help, said President and CEO Christina Keller. The eventual success of the program led to the creation of the company's Returning Citizens program. To date, Cascade has hired over 1,000 people with criminal histories, and those employees have an average retention rate of seven years.

"We want to be an employer of choice, and we feel our culture helps us achieve that," Keller said. "One of the most important things we do is socially responsible hiring."

Addressing Pay Equity

"In a job market where there is fierce competition for diverse talent, companies need to pay people fairly, invest in their development and show them that there is a path forward," said Cheryl Pinarchick, an attorney and co-chair of the Pay Equity Practice Group at Fisher Phillips LLP in Boston.

"This is more than a legal issue," she noted. "When we talk about pay equity, we also need to talk about the opportunity gap and identify disparities among different groups within different levels of the organization. You have to look at it both ways."

By implementing a transparent compensation system with objective metrics for recruitment, advancement and compensation, she explained, companies can help build trust and ensure consistency and fairness.

Read more

    Company Culture
    Racial Equity/Diversity
    Leadership
    Inclusion

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