Guide to Addressing Racial Equity in Workplace (with Case Studies)

Human capital is the most valuable asset of any business and organization. To promote and develop an inclusive workplace where everyone is equal, more companies are taking the initiative by implementing Diversity, Equity, and Inclusion (DEI) policies. 56% employed adults in the U.S. see the emphasis on improving DEI at work as a positive development, according to a Pew Research Center survey. 

However, what makes a good DEI policy? A strong DEI policy should prioritize racial equity, given the increasing focus on racial justice. Disturbing statistics from a research conducted by the Society for Human Resource Management (SHRM) reveal that racial bias in the workplace is costing U.S. businesses a significant amount each year. This includes $54.1 billion in increased absenteeism, $58.7 billion in lost productivity, and $171.9 billion in turnover.

This article explores the intricacies of racial equity in the workplace and offers best practices on how to promote racial equity in the workplace. The guide is particularly beneficial for HR professionals, as it helps them improve their DEI policies and enhance the core values of their businesses.

Racial equity in the workplace refers to the fair treatment of all employees, regardless of their race. For companies, it goes beyond simply hiring individuals from different racial backgrounds. True racial equity involves addressing and eliminating racial disparities, as well as improving the conditions for historically marginalized groups, creating an inclusive workplace. Ultimately, the goal of racial equity is to achieve racial justice, which means eliminating systemic inequities that have disadvantaged certain groups. 

Racial Equity vs. Equality

While equity and equality are related concepts, they hold distinct meanings. Equality is about treating everyone the same way, ensuring uniformity. On the other hand, equity recognizes that not everyone starts from the same place and involves distributing resources and opportunities based on individual needs.

In essence, racial equity goes beyond equal treatment; it's about rectifying historical disadvantages to achieve fairness and justice for all individuals, fostering a society where opportunities are not hindered by pre-existing disparities.

Caring about racial equity at work is not just the right thing to do; it's a strategic necessity with multifaceted aspects showing why is racial equity important. Now, more than ever, it's evident that being a good business is the key to having a successful one. Below are various impacts that racial equity can have on a company.

Business performance aspect

Racial equity improves business performance through team diversity. Embracing racial equity leads to a richer pool of ideas, resulting in the development of products and services that resonate with a broader customer base. Studies by McKinsey indicate that racially diverse companies are 35% more likely to outperform their counterparts in financial returns.

Legal and ethical aspect

Ignoring racial equity can have legal and ethical consequences. Workplace discrimination and bias can lead to lawsuits, reputational damage, and regulatory penalties. Embracing racial equity is not only a compliance requirement but also a commitment to upholding ethical standards.

Employee well-being and productivity aspect

An inclusive workplace, where employees feel valued and respected regardless of their racial backgrounds, leads to higher job satisfaction and engagement. Conversely, a lack of racial equity can result in disparities, causing stress, disengagement, and reduced productivity.

Reputation and brand image aspect

In today's socially conscious landscape, consumers and investors closely examine companies incorporating racial equity in the workplace. Companies that prioritize racial equity and inclusion are more likely to lead to a positive brand image and long-term sustainability.

Promoting racial equity in the workplace requires a comprehensive strategy that addresses a variety of methods and approaches. Key points include:

Creating inclusive policies

Develop and implement inclusive and diverse policies that cover hiring, promotions, training, and workplace interactions. Clear guidelines on nondiscrimination and equal opportunity.

Implementing diverse hiring practices

Actively seek a diverse talent pool during recruitment. Implement blind recruitment processes to reduce unconscious biases. Consider diverse interview panels to ensure a fair and unbiased hiring process.

Creating an inclusive work environment

Incorporating racial equity in the workplace through inclusive workplace culture where employees feel valued and respected. Provide racial equity training to create awareness and promote understanding.

Fostering Employee Resource Groups (ERGs)

Establish ERGs that focus on specific racial or ethnic backgrounds. Having a dedicated team resolving racial equity provides a supportive community for employees, and offers a platform for discussing and addressing racial equity issues.

Ensuring equal promotion and advancement opportunities

Ensure that promotion and advancement opportunities are accessible to all employees regardless of their racial backgrounds. Implement transparent promotion criteria and mentorship programs.

Adhering to fair compensation practices

Regularly review and analyze compensation structures to identify and address any disparities. Ensure that pay scales are equitable and free from discrimination.

Upholding equity in layoffs and downsizing

During times of downsizing or layoffs, ensure that the process is fair and does not disproportionately impact employees from specific racial backgrounds.

How to promote racial equity in the workplace is an ongoing process that requires commitment, continuous assessment, and adaptability. By integrating these methods and approaches, organizations can create a more equitable workplace, ensuring that all employees have equal opportunities.

Major corporations are actively striving to promote racial equity within their organizations. In this section, we will explore the initiatives undertaken by JPMorgan Chase and Citibank to incorporate racial equity in the workplace.

JPMorgan Chase Racial Equity Initiatives

Background: JPMorgan Chase is one of the largest financial institutions globally. Recognizing the need for systemic change, the company has implemented various initiatives.

DEI Practices: JPMorgan Chase DEI policy prioritizes diverse hiring practices and aims to reflect the diversity of its customer base. It implements racial equity training programs to raise awareness about unconscious biases and foster inclusiveness. Over 35% of employees are part of at least one inclusive Business Resources Group, fostering an inclusive environment. Moreover, JPMorgan Chase regularly discloses racial equity impact assessment data to promote transparency and accountability. 

In essence, the company understands that promoting racial equity requires a sustained effort, and its initiatives reflect a dedication to fostering a more equitable and diverse workplace.

Citibank Racial Equity Initiatives

Background: Citibank is a global banking leader.The company has made significant progress in integrating racial equity into its core values.

DEI Practices:  In recent years, Citibank moved forward with a number of strategies to deepen its commitment to DEI practices. The company received a lot of positive feedback from employees for developing a gender-neutral paid parental leave policy. Citibank has prioritized wellness by implementing a program allowing employees with at least five years at the company to be eligible for 12 weeks of time off at 25% pay. Furthermore, Citi has introduced pay equity measures to reduce the pay gap. “Our people reflect the remarkable range of backgrounds and perspectives of our clients and customers–this diversity is what enables our success,” says Sara Wechter, Head of Human Resources.

In summary, JPMorgan Chase and Citibank both exemplify best practices for promoting racial equity. These efforts demonstrate their commitment to building inclusive and equitable workplaces.

In conclusion, achieving racial equity in the workplace is crucial for the success and sustainability of any organization. This article differentiates racial equity vs equality and highlights the importance of racial equity and inclusion. Refer to our guide for further instruction on how to promote racial equity in the workplace, as well as successful case study impacts.

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— Originally Written by Dani Vu —