Employers want more diversity. They may need to open offices in new places.
5 min read.Updated: 22 Feb 2021, 10:48 PM ISTChip Cutter, The Wall Street Journal
Research on race in the workplace suggests executives could close racial gaps within their ranks by being more strategic about geographic locations
Among the key takeaways from a new report on race in the workplace is this surprise: To address inequality inside organizations, some companies may need to open offices in new locations.
Blacks are a relatively small part of the population in some U.S. cities expected to see the highest job growth over the next decade, such as Seattle, and nearly 60% live in the South, according to a sweeping new analysis by researchers at the consulting firm McKinsey & Co.
“Workers need to be connected to the opportunities being created and have the skills for the in-demand roles," says James Manyika, a senior partner at McKinsey who is a director of the McKinsey Global Institute and helped lead the research. “But jobs are often concentrated in counties that aren’t necessarily accessible to Black workers. Companies considering opening additional offices and dedicated to more hiring diversity can bridge this gap by locating new facilities in areas where there are a large concentration of Black workers who have the relevant skills."
McKinsey studied detailed employment data for more than 3,000 U.S. counties and cross-referenced it with internal corporate data and interviews inside companies. What emerges is a comprehensive picture of Black representation in corporate America—and the challenges that remain for both workers and organizations.
Mr. Manyika recently spoke with The Wall Street Journal. Here are edited excerpts of the conversation.
WSJ: You talk with CEOs all the time. How have the questions that executives ask you about diversity changed?
MR. MANYIKA: The general sense for most companies now is “We want to do this" as opposed to “Does this matter?" There’s still a lot of work to do; you don’t solve it in hiring five people or 10 people.
Where I’d like to see the questions move to is less “I’d like to hire the best African-American senior vice president, can you help me find one?" to “How do we train 100,000 African-Americans into managerial roles?"
WSJ: Given what we already know about the uphill battle that many Black professionals face at work, what stood out to you in this research?
MR. MANYIKA: It was quite striking how a lot of Black employment in the private sector is concentrated in the South. Something like 60% of Black private-sector workers are in just 10 states. Population is a big part of that, but also history. Texas, Florida, Georgia and North Carolina make up about 30% of all Black employment. New York, California and Illinois add another 17%.
We went down to the level of cities and counties. In the counties that have higher employment rates in general—that are growing jobs—African-Americans are very underrepresented. They tend to be in the areas where there’s either no job growth or declining occupations.
WSJ: Why is this important for companies to understand?
MR. MANYIKA: If you want to solve this issue of race and employment in the private sector, it’s actually an opportunity. In some of the low-growth counties, you have strong pipelines of talent, just not enough economic activity or investment by companies. So as companies think about “Where do we find talent?" they could be missing out.
Often, some of those counties are very close to large cities. So it could easily be putting up an office in those counties next to a very large city and having access to talent that’s there, but somehow companies haven’t quite recognized that. If I was a CEO of a company, I’d literally want to overlay that county map on my own footprint to figure out: Are there places I should be targeting because the talent is there and I just haven’t opened an office there and I haven’t taken advantage of it in a way that matches my business?
For example, Clayton County, Ga. It has a majority Black population, and much of the Hartsfield-Jackson Atlanta International Airport is located there. Clayton County also claims to have the largest amount of available real estate next to a major airport—potentially marrying an attractive location with a relevant and diverse workforce.
WSJ: Do you expect we’ll actually see offices open up in new places?
MR. MANYIKA: I hope so, particularly at a time when we’re coming out of Covid-19. The geography of work is shifting. I’ve been quite struck in some of the conversations we’ve been having with companies and CEOs who haven’t quite realized this micro aspect of it.
WSJ: Companies have had diversity programs for a long time. Are they doing them wrong?
MR. MANYIKA: Certainly the companies in our survey, they’re all trying to do the right thing. Part of the challenge may be not doing it enough at scale. It’s quite striking that if you look at the boards of directors and the C-suite, representation actually looks a little bit better than the middle of organizations. At some level, boards are easy; you chase around the same candidates and you appoint them. But if you’re having to do this for hundreds of people or even thousands in the managerial ranks, that’s harder. You kind of have to grow them. It’s a real challenge.
Part of what I would encourage from this research is more targeting. Especially of that earlier set of transitions to managerial roles. Really aim a lot of the firepower or initiatives at that group. I would also target how you create a sense of belonging. A lot of African-American workers want to succeed, work very hard and want to stay. So how do you create a certain environment that is inclusive enough so that they’ll want to do that?
People leave because they don’t see themselves progressing to the next level or are leaving to try to start their own businesses.
WSJ: Diversity efforts are sometimes criticized as tokenism. How can companies address that?
MR. MANYIKA: If you go to the data and the facts, I think it’s hard for anybody to argue tokenism. If you look at the résumés of the African-Americans and other minorities and women at the top, they’re extraordinarily accomplished. So I think we have to get past this idea that there’s tokenism in these appointments.
Having said that, I recognize that’s a more difficult thing to do early in people’s careers when people are still trying to make these transitions from front-line and first jobs to managerial work, because there isn’t quite as much of the fact base you can use to counter these arguments of tokenism. So it’s much harder there to explain why is it this person is having more opportunities than that person. There, you’re mostly relying on performance reviews, which can be quite subjective.
Mr. Cutter is a Wall Street Journal reporter in New York. He can be reached at firstname.lastname@example.org.