UK employers struggle to simultaneously achieve gender and ethnic diversity, even when they have increased female representation at leadership level, according to a report.
McKinsey’s Race in the UK workplace: The intersectional experience report, which identified 80 UK companies that have higher-than-average female or ethnic minority representation in executive teams, found that two-thirds had elevated female representation but only 50% have achieved high ethnic-minority representation.
The research finds that Black, Bangladeshi and Pakistani (BBP) women are at the greatest disadvantage on key metrics of workplace equality – including pay and participation in the labour force – compared with all other ethnicity and gender combinations, such as Chinese women and White British men.
It says that addressing the challenges that BBP women face will require more targeted actions, but will yield far-reaching benefits for organisations and the economy. Previous McKinsey research found that firms with ethnically-diverse leadership teams are 33-36% more likely to outperform competitors on profitability.
Ethnic diversity
Firms not doing enough on senior-level race diversity
Closing the pay gap could also translate to a 30% increase in the average BBP woman’s annual salary, it claimed.
Across all age groups, the 23% of BBP women who are in higher-paying occupations still typically earn less than their White colleagues.
BBP women are more likely to be concentrated in the lower levels of their organisations and are underrepresented in managerial roles.
“Many obstacles inhibit equitable promotion for BBP women aged 26 to 55,” the report says.
“Career development benefits from a strong support network, but BBP women too often find themselves without champions in the organisation. For example, mentorship and sponsorship play a crucial role in accelerating career growth, but less than 40% of newly promoted BBP women cited receiving support from their direct manager as a key contributor to their success (compared with 55 percent of White men).
“When BBP women seek promotions, they are much less likely to get feedback on their most recent unsuccessful application – a gap of 17 percentage points compared with White men. This may be why BBP women in our survey are 14 percentage points less likely than White men to report that their company’s promotion process is transparent, fair, and easy.”
However, the ‘unconditional’ pay gap (the difference in median hourly earnings between ethnic minorities and White workers, without controlling for factors such as education), has closed for younger BBP women. Bangladeshi and Pakistani women aged 16 to 25 earn on par with White male workers in the same demographic, and Black women earn 11% more.
The report says: “When BBP women enter the workforce, they gravitate toward occupations on the upper end of the pay scale: the participation of BBP women aged 16 to 25 in the three highest-paying occupations (managers, educators and workforce trainers, and health professionals) doubled over the past decade, whereas their participation in the lowest-paying occupations (food services, customer service, and agriculture) has declined.
“The largest increase occurred among health professionals (such as doctors, nurses, and midwives), where the representation of young BBP women rose five percentage points to 7 percent.”
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This could be due to more BBP women pursuing higher education and more graduate recruitment programmes aimed at ethnic minority groups, it says.
The report makes several recommendations for improving racial equity:
- articulating and demonstrating the importance of intersectionality and DEI from the top down, and mobilising the entire organisation to advance it
- looking at data through an intersectional lens, as some workers specific needs get obscured in broader categories, such as BAME
- prioritising initiatives that specifically meet the unique needs of BBP women, including helping them to expand professional networks and implementing a more transparent and equitable promotion process
- regularly tracking KPIs and publishing progress.
