Companies can ensure workforce diversity and business performance by addressing career and pay equity.

As investors focus their attention on companies that contribute to advancing equity and social justice, organizations are finding strong economic incentives for making diversity, equity and inclusion (DEI) a core business priority.


Achieving and sustaining career and pay equity for women and people of color at work helps companies enhance workforce diversity and equity and deliver stronger business performance over the long term.


Despite significant progress in recent years, our research shows that women and people of color in business are still not being positioned to succeed in the same way as their male or white colleagues — resulting in inadequate progress and equity, particularly with respect to career equity.


Our research shows that people of color and women still face serious obstacles to success at work — but we have gained insights on what employers can do to systematically remove these hurdles and accelerate the journey toward a more diverse workforce and equitable, inclusive workplace in a productive and sustainable way.

Key observations

Despite progress, representation is lagging 

Women and people of color face significant shortfalls in representation at executive, managerial and even professional levels.

Both pay and career equity remain elusive for women and people of color

Pay disparities are closing but unexplained disparities in their chances for promotion are persistent and sizeable. For Black employees in particular, impediments to advancement are compounded by large and almost universal negative disparities in their performance ratings. 

Roles are critical to career progress 

Some roles accelerate careers, others depress them. All too often, women and people of color concentrate in the latter, whereas white males are overrepresented in the former.

Emphasis on  internal mobility can block careers 

Organizations often embrace leadership models predicated on mobility and changing jobs and locations. This deprives many women — who disproportionately bear caregiving responsibilities in households — of full access to leadership and career development, weakening internal pipelines of female leaders.

Reporting relationships and group demographics matter 

Pay, ratings and promotion opportunities tend to be strongly influenced by the characteristics of one’s supervisor and work groups. These effects can work against women and people of color when they are less likely to report to high-performing or higher-level supervisors or work in groups disproportionately composed of traditionally under-represented demographic groups. 

Flexible work can be a career-killer 

Key aspects of flexible working — such as family leave, remote work, and part-time employment — can severely undermine career advancement, rating and pay.

What can employers do?

To adequately address these issues, employers must commit to identifying, reporting on and addressing root causes. 


Actions we have identified in this study include:

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Undertaking an objective assessment of “situational” or “circumstantial “ influences on performance evaluations and ratings that are removed from actual employee contribution

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Identifying factors in the organization’s “success profile” that are working systematically against specific demographic groups

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Undertaking an empirical assessment to identify accelerator roles that tend to feed accession into higher levels

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Tracking and understanding the roles and job families gaining the highest currency in the organization

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Performing an objective assessment of influences on performance evaluations and ratings

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Finding substitutes for mobility in leadership development

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Using predictive modeling to identify the characteristics of supervisors most likely to enhance the probability of promotion, high ratings and retention of diverse talent

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Changing organizational culture to be more accepting of and supportive of flexible work, reducing risk and negative consequences

In this research paper, we unpack these causes of pay and career disparities for people of color and women at work —looking at some key research and detailing recommendations for employers on how to meet the challenge, strengthen workforce diversity and create equitable workplaces.

Haig R. Nalbantian
Haig R. Nalbantian

Senior Partner, Co-Leader of Mercer’s Workforce Sciences Institute

Read the full paper

Download An employer’s guide to achieving and sustaining pay and career equity at work 

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