Consulting’s diversity paradox

Personally, I like to start these blogs with some sort of pop culture analogy that neatly illustrates the topic at hand—or, failing that, a humorous industry anecdote. But there are some topics and some moments where that sort of levity feels out of place. At the time of writing, the Black Lives Matter movement has sparked a worldwide reckoning on issues of structural racism, and organisations of all stripes are being forced to consider how they can contribute to the global effort to dismantle economic and social systems that benefit white people to the detriment of people of colour. This is a moment where the consulting industry should, collectively, stand back and assess its own role in these systems.

And all the evidence suggests that firms still have a long way to go before they get to anything like a level racial playing field—at least in markets where companies are obligated, either by statutory requirements or social and media pressure, to release racial pay gap data. A paper we recently published in collaboration with executive search and talent advisory firm Sheffield Haworth noted that, in the UK, BAME employees at Big Four firms have salaries that are on average 13.4% lower than those of their white counterparts, and make 37.9% less in bonuses each year. One only imagines the problem is even more acute in markets that lack the clarifying effects of transparency. And a recent investigation by The Telegraph found that only 11 of the almost 3,000 equity partners at Big Four firms in the UK self-identified as black, i.e., about a tenth of the number you’d expect if partnerships at those firms were truly representative of the UK population.

And yet, despite the obvious magnitude of the diversity and inclusion challenges facing the industry, partners themselves are surprisingly positive about the current state of affairs. In the aforementioned study, we asked partners at consulting firms to score their own organisations’ performance on racial diversity at the partner level. The grades that came back were stunningly high; on average, partners gave their firms an eight out of 10—and a substantial number plumped for scores even higher than that. While it would be easy to assume that this is simply a case of white partners not seeing problems that are obvious to their BAME colleagues, this doesn’t seem to be what’s going on. We found no significant difference in our data between white partners and BAME partners in terms of how they evaluated their own firms; if anything, white partners were slightly more critical of their own firms’ records on racial diversity.

Instead, we believe that this apparent paradox is the result of a disconnect between the progress firms have made when it comes to cultural indicators of diversity and inclusion, and the progress they still need to make in addressing the underlying structural issues that are holding them back from becoming truly representative of the societies in which they operate.

The reality is that the industry has come a long way over the last few decades. For a long time, consulting was seen as something of an “old boys’ club” that was explicitly hostile to anyone who wanted a seat at the table who wasn’t a straight white man. But the situation today is very different. You are far less likely, these days, to hear consultants making racist or sexist jokes, and when a person of colour joins a firm, they are unlikely to encounter explicit obstacles blocking their career progression. In fact, they may well find themselves able to take advantage of support systems like mentorship programmes or diversity networks.

So, when partners give their firms high marks for diversity and inclusion, we believe that they are expressing their positivity about the internal cultures of those firms—and just how much those cultures have improved. But despite all that improvement, many underlying structural barriers to diversity remain in place. Most leading firms still recruit primarily from top universities and MBA programmes that are themselves disproportionately white. And while practices like anonymised CVs are becoming more common, firms are still using recruitment processes that are liable to discriminate against certain groups of applicants; if your interview panels are overwhelmingly white, then no amount of goodwill and positive intentions will be enough to prevent unconscious bias from creeping in.

These factors—and many others—combine to create a situation in which people of colour are dramatically under-represented in many consulting firms, particularly at the partner level. While we should certainly acknowledge just how much more inclusive the culture in the industry has become in recent years, consultants cannot afford to rest on their laurels. If firms are really serious about representation, then they need to go beyond surface-level change and start addressing the structural issues that plague this industry as they do, unfortunately, so many others.