(Bloomberg)—As civil unrest over systemic racism roils the U.S., Walmart Inc.’s CEO has pledged to make changes giving the company’s 340,000 Black workers more opportunities.
According to the company’s latest diversity report, they need them.
The share of senior Black executives at the world’s largest retailer has declined since 2015, while the share of Black mid-level managers has stagnated, the report shows. The information is only updated through 2018, so does not account for recent promotions and departures, and the company says the numbers have improved since then.
To be sure, it takes a lot to move the needle inside Walmart’s 1.5 million-person U.S. workforce, which is 21% Black overall. Walmart has appointed Black executives to some high-profile roles in recent months, such as Dacona Smith, who is now chief operating officer in the U.S., and Latriece Watkins, an executive vice president running the U.S. consumables division, which includes key categories like baby, beauty and pet products. Both started their careers at Walmart decades ago.
Many of Walmart’s rivals, like Target Corp., are also struggling to create a more diverse workforce. And Walmart’s leadership ranks are more diverse than the overall retail industry, according to composite figures provided for comparison in Walmart’s diversity report.
Still, a $100 million pledge by the company and its founding family—the second-largest corporate commitment to date, behind only Bank of America Corp.’s $1 billion—suggests that the world’s largest retailer wants to set the pace on reducing racial inequalities, rather than just muddle along.
“We must do better,” Donna Morris, Walmart’s chief people officer, said in a June 5 memo to employees. “We need to look internally to ensure we are operating in an environment that leads to better representation and a greater emphasis on inclusion.”
CEO Doug McMillon is now chairman of the Business Roundtable, a group of blue-chip corporate leaders who earlier this month formed a special committee to advance racial equity. The committee includes JPMorgan Chase & Co.’s Jamie Dimon, Mary Barra of General Motors Co. and Randall Stephenson of AT&T Inc.
“I will hold myself, our leaders, and our associates to higher levels of accountability,” McMillon said in the diversity report. “Together we will set an even higher bar for ourselves as we take this next step in our journey to actively shape our culture to be more inclusive.”
In Walmart’s executive ranks, Black employees held just 5.7% of roles in 2018, according to the company’s 2019 diversity report. That’s a slight increase from 5.3% in 2017 but down from a high of 8.7% in 2015. Among first and middle-level managers, the story is similar: They held 14.4% of those manager positions in 2018, a figure that hasn’t changed much at all in four years.
A Walmart spokeswoman said the share of Black senior leaders has improved since 2018 and stood at 6.9% at the end of May. Black Americans represent 13% of the U.S. population and 16% of Walmart’s home state of Arkansas, according to the U.S. Census Bureau.
The dearth of non-White faces and voices among Walmart’s leaders might explain why the company until very recently put Black haircare and beauty products inside locked cases in about a dozen stores. In 2018, a woman sued Walmart in federal court claiming discrimination over the policy, saying she felt humiliated having to ask a store employee to unlock the case.
After shopper complaints and media reports last week, Walmart halted the practice. Drugstore chain CVS Health Corp. has also faced criticism for locking up such beauty items. It has said it will stop, too.
Walmart is taking steps to improve. It will now report its progress on ethnic and gender diversity twice a year, and is “thoroughly reviewing” its hiring, development and reward practices, according to the latest diversity report. One change that will happen immediately, Morris said, is that all openings at the vice president level and below will be posted internally first. Walmart will also ensure that hiring teams and candidate slates are diverse, she said, and will hold “associate listening sessions” where rank-and-file employees can tell senior leaders “how you’re feeling.”
Morris said Walmart will “hold our leaders accountable in our efforts to make progress,” although she didn’t explain exactly how it would do so.
Often, the only way to ensure that senior leaders take diversity seriously is to tie their pay packages to reaching diversity goals, according to Ron Culp, the former head of public relations at Sears, who now teaches at DePaul University.
According to Walmart’s most recent proxy report, McMillon’s annual bonus—which totaled $3.5 million last year — is tied in part to meeting diversity goals, which are not specified. But more than 75% of his total direct compensation is based on achieving financial metrics like operating income, sales and return on investment.
Walmart is No. 3 in the 2020 Digital Commerce 360 Top 500.Favorite