Many organizations have risen to the challenge of understanding their progress in championing racial equity and supporting the advancement of diverse workers. However, they have found fair and equitable progress hard to achieve—in part because the needs of different groups vary considerably and must be reflected in diversity initiatives. Our research found Black, Bangladeshi, and Pakistani groups (hereafter referred to as “BBP,” the focus of this article) in the United Kingdom were the furthest behind on pay and labor force participation. For example, in 2019, BBP individuals earned 15 to 16 percent less than White British workers. In contrast, Indian and Chinese workers earned 16 and 23 percent more, respectively, than White workers.
Additional McKinsey research highlights the difficulty in achieving progress across the board. We identified 80 UK companies that have higher-than-average female or ethnic-minority representation in executive teams when factoring in other dimensions of diversity beyond color. Two-thirds of these organizations have successfully and impressively elevated female representation, but only 50 percent have achieved high ethnic-minority representation. This suggests UK companies struggle to simultaneously achieve gender and ethnic diversity (Exhibit 1).
This outcome is particularly notable for workers who fall at the intersection of gender and ethnicity, such as BBP women. Our research found that BBP women are at the greatest disadvantage on key metrics of workplace equality compared with all other ethnicity and gender combinations—for example, Chinese women and White British men (Exhibit 2). In essence, the effect of the progression barriers may be compounding for individuals with multiple “identities.”
Addressing the challenges BBP women face in the workforce will require more-targeted actions but could yield far-reaching benefits to companies and the economy (see sidebar “About the research”). According to McKinsey research, organizations with robust ethnic-minority representation in leadership teams are 33 to 36 percent more likely to outperform their peers on profitability. Further, our analysis shows that closing the pay gap could translate to a 30 percent increase in the average BBP woman’s annual salary.
As we expanded our operations, we quickly realized that two communities, Black and Bangladeshi, face very different issues and will need a different approach. The Black girls we were supporting mostly struggled with lacking confidence and mentorship, as well as limited resources due to an upbringing in impoverished areas. The Bangladeshi girls often faced more of a cultural challenge: they are expected to become moms and care for a family, and therefore their careers were not prioritized or encouraged as much at home.
Executive of a London-based organization focused on uplifting youth of ethnic minorities and kick-starting their careers
Exploring participation and pay of BBP women of different ages
In this article, we focus on understanding why BBP women of different ages experience large and varying unconditional pay gaps (the difference in median hourly earnings between ethnic minorities and White workers, without controlling for factors such as education) compared with White British men (Exhibit 3). The unconditional pay gap is quite different from the conditional pay gap, which assesses pay differences of workers in the same job, for example. The unconditional pay gap is largely driven by two key factors: a person’s occupation and the level of seniority a person achieves. For instance, a 40-year-old senior partner at a global law firm is likely to earn a lot more than a 40-year-old junior teacher in a public school. While we uncovered some encouraging findings, particularly for younger BBP women, the overall picture for BBP women is mixed.
BBP women aged 16 to 25 are signaling a new future
The unconditional pay gap has closed for BBP women aged 16 to 25. Bangladeshi and Pakistani women earn on par with White male workers in the same demographic, and Black women earn 11 percent more (Exhibit 4).
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 (Exhibit 5). 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.
The improved outlook for the youngest BBP women has been shaped by the confluence of several beneficial factors. More BBP women have pursued further education, with an increase of 16 percentage points for Bangladeshi and Pakistani women and ten percentage points for Black women doing so over the past decade. As a result, they are more likely to secure higher-paying jobs upon graduation.
The good news is that there are a lot of jobs in healthcare and a lot of diversity, at least at the junior levels. However, it isn’t all rosy—healthcare workers are burnt out after COVID-19. Many lost loved ones and colleagues, and [we’ve seen] reports of how ethnic minorities were disproportionately affected.
Black African woman, junior-level clinician, healthcare professional
Our research also suggests that the youngest BBP workers have greater access to social capital (knowing family or friends within their industry or occupation of interest) compared with BBP women aged 26 and older, and this support helps them better navigate the labor market.
In addition, our survey of nearly 3,000 UK workers found that although all age groups considered having a network one of the most important factors in securing a job, the youngest generations were more likely to have this network available to them (19 percent of BBP women aged 16 to 25) than other generations (14 percent for ages 26 to 55 and 5 percent for ages 56 to 65).
After working for a company for three years and receiving positive reviews of my performance, I found out I was earning half as much as a White male colleague in the same position as me. I approached my supervisors and gave the company one year to increase my salary. They did not, and I left.
Pakistani woman, first-level manager, global software firm
Another contributing factor—and one more difficult to quantify—could be the increase in graduate-recruiting programs aimed at ethnic minorities. For example, in the 10,000 Black Interns program, more than 700 British employers have pledged to offer paid summer internships for talented Black students and graduates in 2023. (To see how BBP men fare, see sidebar “The experience of Black, Bangladeshi, and Pakistani men aged 16 to 25.”)
These gains have often been made in the face of significant adversity. For instance, BBP women are more likely to navigate a job search process that is both opaque and arduous. Analysis of our survey of UK workers found that, on average, BBP female job candidates have to send more applications than White British men to get a job. In fact, 60 percent of White candidates (both male and female) get hired after applying to ten jobs versus only 45 percent of BBP female workers. When BBP women have an unsuccessful application, they are twice as likely to be told it was because they were not “a strong cultural or values fit” with the company compared with White British men. So even though BBP women may have the required qualifications and experience, the differences in their personal attributes—ranging from religious hair coverings to preferences for working from home—may trigger instances of bias and may be synonymous with incompatible working or leadership styles.
Despite these barriers, BBP women aged 16 to 25 have built early career momentum. The challenge: how to ensure BBP women can translate these initial wins into sustained progress.
BBP women aged 26 to 55 grapple with low-paying occupations and the ‘frozen middle’ effect
Our analysis found that the gains made by BBP women aged 16 to 25 are not matched by generations of workers who have been in the labor force longer. The pay gap starts to grow significantly for Bangladeshi and Pakistani women aged 26 to 35, a trend that continues for BBP women aged 36 to 55, who face the widest pay gaps of all groups. Compared with White men, Bangladeshi and Pakistani women in the 26-to-35 age range earn 27 percent less per hour, and Black women of this age range fare even worse, earning 36 percent less per hour. The disparity narrows relative to White and other minority women (on average, 21 percent for Black women and 11 percent for Bangladeshi and Pakistani women).
Multiple factors contribute to the large pay gap for BBP women aged 26 to 55. Our analysis found that three factors contribute to the growing disparity in pay as BBP women continue their careers. First, unlike the 16 to 25 cohort, BBP women aged 26 to 55 have seen little growth in the concentration of BBP women in higher-paying jobs. Similarly, there has been barely any decline in their concentration in lower-paying jobs (Exhibit 6).
Further, even the 23 percent of BBP women who are in higher-paying occupations still typically earn less than their White colleagues. For example, among health professionals, Black women earn 23 percent less per hour than White men, and Bangladeshi and Pakistani women earn 14 percent less.
Last, BBP women are also more likely to be concentrated in the lower levels of their organizations, and ethnic-minority women are underrepresented in managerial roles. In January 2022, the National Health Service (NHS) published a report on its equality metrics. The data shows that even though women make up the majority of NHS staff (69 percent), they are less represented in senior manager roles (56 percent). Comparatively, while men make up only 31 percent of all staff, they make up 44 percent of senior managers, demonstrating men’s overrepresentation at the senior manager level. This finding exemplifies the “frozen middle” effect on career progression, or the inability of some segments of workers to advance beyond the middle of an organization to its upper levels. This pattern is similar to our findings for Black workers in the United States, who encounter a broken rung from entry-level jobs to managerial jobs.
Many obstacles inhibit equitable promotion for BBP women aged 26 to 55. Our survey points to multiple factors that combine to slow the advancement of BBP women. Career development benefits from a strong support network, but BBP women too often find themselves without champions in the organization. For example, mentorship and sponsorship play a crucial role in accelerating career growth, but less than 40 percent 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.
Ingrained issues drive higher attrition and poor representation in leadership roles. The lack of career progression and poorer experiences within a company increase the likelihood that BBP women, especially middle managers, will leave their company. A publicly available internal diversity audit performed by the Bank of England in 2021 found that ethnic minorities, including BBP women with the same performance rating as White women, were 25 percent more likely to quit their job than their White colleagues.
While leaving the company may offer BBP women a short-term benefit or increase in pay, spending less time in one organization could hinder their chances of progressing to the C-suite. Our research found that when selecting executives, UK companies tend to favor employees who have been with the organization for an extended tenure. Our analysis of senior leadership career paths at 100 of the United Kingdom’s largest employers found that 82 percent of senior leaders were homegrown talent. Because female BBP workers are leaving their company at the highest rate of all employees, the odds of BBP women moving into senior leadership are not favorable.
The lack of career mobility for middle managers and higher-than-average attrition rates ultimately result in significant underrepresentation of BBP women in the C-suite. They make up just 0.3 percent of CEO, CFO, and COO roles at the UK FTSE 100, compared with 1 percent for BBP men and 12 percent for White, Chinese, and Indian women, according to Green Park data.
I applied to a new company for a role as team manager. I was told that I met the qualifications, but they were looking for someone who had experience within the company to be able to manage the team. A few months after joining, they then hired a White woman from outside the company—with less credentials than me and less experience than me in the company—as manager and asked me to train her and get her up to speed.
Black African woman, junior-level clinician, healthcare professional
Persistent disparities lead to unequal experiences for BBP women aged 56 to 65
These challenges converge to limit the prospects of BBP women later in their careers, in part because of lower levels of wealth. Black households have the lowest accumulated wealth compared with Bangladeshi, Pakistani, and White households, and Black workers aged 56 to 65 are the most likely to be renters rather than homeowners (Exhibit 7). In addition, pension participation is lowest for workers in the Bangladeshi and Pakistani (48 percent) and Black African (59 percent) segments, significantly trailing White British workers (82 percent).
At the same time, Black women remain in the workforce longer. Their labor participation trails that of White women until midcareer, when employment rates essentially become even (Exhibit 8). In the 56-to-65 age group, Black women are over-represented compared with White women, who are more likely to have the financial means to retire earlier. Over the past decade, more White, Bangladeshi, and Pakistani women of this age group chose to leave employment for family care (31 and 27 percent, respectively), while more Black women had to stay in their jobs longer (an additional 9 percent). Meanwhile, participation for Bangladeshi and Pakistani women remains consistently below that of their Black and White female colleagues, dropping to around 23 percent in the 56-to-65 age group.
This disparity is also reflected in the pay gaps observed for the 56 to 65 age group. As Bangladeshi and Pakistani women retire, their participation drops to about 20 percent and their pay gap grows to a 32 percent disparity, the highest of all age groups. In contrast, 59 percent of Black women remain in the workforce at this age, and their pay gap falls to just 7 percent compared with White men. This pattern could indicate that the Bangladeshi, Pakistani, and White groups who can afford to retire or have the necessary support network exit the labor market. While the pay gap between Black women and White men lessens, this is not because Black women are earning more but rather because the median pay of White men aged 56 to 65 drops 21 percent from the highest median pay.
Improving outcomes for BBP workers could be beneficial for business and society
Previous McKinsey research found the business case for diversity in executive teams is stronger than ever. The analysis showed that companies in the top quartile for gender diversity on executive teams, and those in the top quartile for ethnic diversity on executive teams, were 25 and 36 percent, respectively, more likely to have above-average profitability than companies in the fourth quartile.
Moreover, we found the greater the representation, the higher the likelihood of outperformance.
Uplifting BBP women in the labor market could therefore have a business and economic impact. A more equal distribution of all employees across the economy could help close the two main pay gaps faced by BBP women: underrepresentation across occupations (the representational pay gap) and being paid less for the same roles as White men (the within-occupation pay gap).
The results show that closing both pay gaps could translate to a 30 percent increase in the average BBP woman’s annual income (Exhibit 9). Of this amount, roughly a third comes from having equal BBP representation in occupations where they are currently underrepresented—in particular, high-paying business professionals and managerial occupations. Two-thirds derives from BBP women advancing to higher-paying roles in their existing occupations or from those in higher-paying roles being paid the same as White male workers. Beyond the direct impact of higher income on BBP women’s purchasing power, there would be other positive quantifiable effects. Improving the prospects for women often raises the quality of life in their communities: women’s spending decisions are more likely to translate into better household nutrition and children’s education, for example. Further, the Social Mobility Commission (SMC) noted that reducing child poverty is one of the influential levers for improving social mobility, and raising incomes of mothers is an important step in this direction.
How UK companies can make progress on racial equity in the workplace
Addressing racial equality at work is a complex undertaking that requires the participation of public and private organizations, policy makers, and communities. Below, we share four practical actions executives can take to directly improve the unequal experiences of BBP women in their organizations.
Change is about accountability culture. Our CEO installed a committee of senior business leaders, independent of HR, that is accountable for creating plans and implementing and tracking progress on diversity and inclusion KPIs. This move has ensured sustainable and targeted energy behind all of our inclusion initiatives.
Global financial-services firm executive
1. Articulate and role model the importance of intersectionality and diversity, equity, and inclusion from the top down, and mobilize the entire organization to advance it
Our experience in diversity, equity, and inclusion (DEI) strategies suggests that CEOs who continue to communicate the importance of different forms of inclusion and diversity and define specific, quantifiable aspirations for specific segments—for example, hiring, attrition, and promotion rates for BBP women—achieve more-significant culture shifts. As our data demonstrates, it is critical to set targets within the context of specific populations (for example, a London-based company should use demographics for the city’s BBP working-age population) and incorporate BBP feedback on the company’s internal DEI goals. The strategy and progress toward these aspirations should be communicated and cascaded regularly throughout the organization.
Further, employees from frontline managers to senior executives should be enlisted as allies for inclusion efforts and assessed on their ability to create inclusive work cultures. Everyone should be responsible, not just those who are typically excluded.
2. Strengthen insights through an intersectional lens to understand the baseline and where the pain points lie
The specific needs of diverse workers, including BBP women, can get obscured by those of broader categories, such as BAME or women. Many organizations will have to adjust their approaches to data and analysis, collecting ethnicity- and age-specific data (where regulations permit) to enable companies to set targets and develop strategies at a granular level for each group. Data sources should include qualitative surveys that examine the sentiment of workers as well as quantitative data sets. Analyzing responses with an intersectional lens—such as Bangladeshi women in managerial roles—can provide much greater clarity into the specific challenges for that group.
3. Prioritize initiatives that specifically meet the unique needs of BBP women
The more targeted the actions, the more effective they will be in making progress. We recommend actions against each key barrier from our analysis.
Redesign recruiting efforts to ensure a more diverse candidate pool, and provide support to BBP women. BBP women have to apply for more jobs than White men and are more likely to be told they are not a strong cultural or values fit. To improve the BBP talent pipeline, companies can follow two parallel approaches. First, they can engage an external recruiting organization that supports BBP women in job attainment. Second, they can conduct an overhaul of their current recruitment processes to identify where the most BBP female candidates are lost and restructure their processes and practices. Companies could focus on diversifying their interview board, reimagining their campus recruitment strategy, establishing paid internship or apprenticeship programs that cover transport costs, and creating upskilling programs, particularly for women returning to the workforce.
Data has been a key enabler for change. It creates transparency throughout the organization so we can all have a central point of reference, set a high ambition from that baseline, and track our progress or lack thereof consistently.
Global telecom executive
Help BBP women expand their professional networks. BBP women are less likely to know someone personally within a company when applying for a job. Companies could take a couple of actions. First, introduce networking events for potential BBP female candidates, particularly those who are midcareer, to connect applicants to current employees who can provide support throughout the application process. Second, create referral reward programs, through which existing employees receive rewards for helping recruit BBP women.
Implement a more transparent, equitable promotion process. As in the recruitment process, companies would need to conduct a diagnostic of when BBP women start to fall behind in the promotion process. If fewer BBP women are applying for roles, companies could seek to improve the transparency of career opportunities and the criteria to apply for a promotion. If more BBP women are unsuccessful in their application, companies could consider diversifying the composition of review boards and offering training programs to reviewers to increase the likelihood of objective appraisals and minimize unconscious biases. It should also become more routine to provide actionable feedback to candidates, capture it within the organization, and better detect patterns over time.
Enhance the employee experience for BBP women by elevating inclusion. Creating a sense of belonging in companies is an art rather than a science. Companies could hold listening sessions or conduct regular pulse surveys to understand what it would take for BBP women to feel they belong in the organization. Solutions could include creating different types of employee events so no one is excluded (for example, evening events are typically harder for workers with children to attend) or rethinking the company dress code to accommodate and welcome those who may wear religious clothing. Workers will look to senior leadership for role models; if executives dress, speak, act, and celebrate in only one way, it is harder for workers to feel they have a future in that company.
Belonging also means having trust in a company to take strong action—for example, when discrimination has occurred or pay discrepancies are detected between BBP women and other groups. Beyond antiracism statements and unconscious-bias trainings, companies could focus on creating channels and forums that allow BBP women to freely speak about their experiences and get the right support. These efforts could include clearly articulating the company’s values, communicating them throughout the organization to build confidence in the reporting system, disciplining workers who don’t uphold them, and sharing implications for individuals (on an anonymous basis) who don’t uphold the organization’s values.
Further, to engender trust in compensation processes, companies need to create transparency. Actions could include publishing gender and ethnicity pay gaps for each group to equip workers with knowledge and changemakers with a fact base to pursue change.
We found when women were trying to advance, they were getting feedback and training that was too prescriptive of how we wanted our managers to lead. After conducting a program to identify how different people may choose to show up as a leader, we coached our promotions committee and senior leaders on how to celebrate variances in leadership rather than outline strict criteria.
Executive of a global energy company
4. Enforce rigorous tracking and course correction while celebrating success
With these elements in place, companies can focus on regularly tracking KPIs against targets and publishing progress for accountability and transparency. KPI data segmented by intersectional groups can enable companies to analyze how different groups are progressing as well as the effectiveness of initiatives for specific groups. Over time, companies can use initial results to recalibrate their programs and interventions, inviting the affected communities to reflect on these metrics and help shape the next set of actions.
Amplifying impact through external interventions
While implementing these four actions, companies can look to extend their values beyond their organization to their partners, supply chains, and communities. For example, a company could commit to diversifying its supplier base to be more inclusive of underrepresented business owners or to partnering with diverse businesses to promote their products and services.
Executives could also consider providing direct financial support—in the form of corporate donations and foundation programs, grants, and scholarships—to organizations that make a tangible impact on racial equity. Further, companies could provide free public goods and services to support BBP businesses and communities. This strategy works particularly well when an initiative is a natural extension of a company’s core business. For instance, a financial-services company could create a free program for improving credit scores for loans.
Employers can also play a vital role in improving the pipeline of BBP women into higher-paying jobs through industry coalitions. McKinsey’s July 2022 Race in the workplace report found that some US companies are forming coalitions with other businesses, local nonprofits, and organizations in the workforce development sector to better connect workers to training and sustainable career pathways. By providing a path to employment in high-potential, high-growth careers, employers can improve the prospects of BBP women beyond just their four walls.
These actions can help unlock further progress for BBP women, intersectional groups, and, even more broadly, every employee. As organizations become more inclusive, the benefits will spill over into the full workforce as well as the broader community.
Progress on racial equity in the workplace doesn’t come easily. It requires deliberate and coordinated action by stakeholders over a sustained period of time. Crafting effective interventions for the groups facing the greatest disparities in UK labor force participation, pay, and promotion—particularly BBP women—could have a far-reaching impact on racial equity in the workplace and communities across the country. Intersectionality, as we have demonstrated, is not just an academic word: it requires we all do the work to identify the issues and solutions that actually move the needle for each group. We are encouraged by the steps many organizations are already taking. Now it’s time for companies and other stakeholders to take it to the next level.