Empowering economic growth in the Latino community

Source: https://tinyurl.com/ycxny66a

Domenika Lynch, head of the Aspen Institute’s Latinos and Society Program, and McKinsey’s Bernardo Sichel discuss the economic state of Latinos in America and ways to remove barriers to participation.

Latinos are projected to make up more than 30 percent of the US labor force by 2060. This episode of McKinsey’s Future of America podcast explores the economic experiences of Latinos in the United States and the prospects for their full participation in the US economy, based on lessons learned in a joint research project with the Aspen Institute. A summary of the results appears in the report The economic state of Latinos in America: The American dream deferred, published by McKinsey in partnership with The Aspen Institute Latinos and Society Program in December 2021.

To share what this report uncovers about the economic state of Latinos in America, Domenika Lynch, head of the Aspen Institute’s Latinos and Society Program, and McKinsey’s Bernardo Sichel recently met with McKinsey’s Kweilin Ellingrud. Lynch and Sichel also suggest ways to break down barriers to economic participation and build a more inclusive economy. The following transcript has been edited for clarity.

Audio interview: https://mck.co/3LQTVm6

Kweilin Ellingrud: Welcome to McKinsey’s Future of America podcast, where we explore how we can build a future that drives sustainable and inclusive growth. Join us in conversation with leaders who are accelerating progress to grow, broaden, and sustain prosperity for more Americans.

I’m your host for today, Kweilin. I’m the McKinsey Global Institute director and a senior partner based in Minneapolis. Today, I’m joined by Domenika Lynch of the Aspen Institute and Bernardo Sichel, a partner here at McKinsey. Domenika leads the Latinos and Society Program at the Aspen Institute, and Bernardo is based in Chicago, where he is a leader in McKinsey’s Consumer Packaged Goods Practice. Domenika and Bernardo, welcome, and thank you for being here today.

Bernardo Sichel: Thanks for having us.

Domenika Lynch: Thank you for having us.

Kweilin Ellingrud: Can you tell us a little bit more about your background? Domenika, let’s start with you.

Domenika Lynch: Sure, Kweilin. I am really excited that I am part of the Aspen Institute and the head of the Latinos and Society Program. It now feels like the pinnacle of my career and everything that I’ve been doing across the public and private sectors.

I want to start with a story that I think captures my “why” and my why at the Aspen Institute as the head of the Latinos and Society Program. As a first-generation college student at the University of Southern California [USC], I attended a gala where one of our top students was being honored at the Beverly Wilshire Hotel, the Pretty Woman hotel. Being a guest there and being inspired by meeting doctors and lawyers, policy makers, presidents of universities that were Latino—they looked like me and gave me hope that one day I could be that too.

When a young woman got up on stage who was a peer of mine and was celebrated for her GPA, celebrated for her dream of becoming a doctor, she asked her mother to stand, and she said, “This award belongs to my mother, who for the first time in 25 years tonight is not a maid at the hotel but is an honored guest.” In that moment, all the servers came down. They lined up, and they had flowers. And we were all moved to tears. The recognition that in America that was possible—from one generation to the next, you can go from being the maid in a hotel as beautiful as the Beverly Wilshire Hotel to having a daughter that was bound to go to medical school—I wanted to be part of that movement and part of that work.

Through my work at USC, at the Congressional Hispanic Caucus Institute, and now at the Aspen Latinos and Society Program, it is about that economic mobility. It is about the American dream and how it benefits us all. I was inspired then, and I’m still inspired when I tell that story. That is the why behind my work and a lot of what I do. We will talk more later about that.

Kweilin Ellingrud: Amazing. Thank you for sharing that incredibly touching story. Bernardo, I would love to hear a bit more about your background.

Bernardo Sichel: Thanks, Kweilin. I’m Bernardo Sichel. I’m a partner at McKinsey in our Consumer Packaged Goods Practice. I think more important than that, I’m a Latino myself as well. I migrated to the US 20 years ago with my wife to start a new life from our home country of Venezuela. We are proud parents of two first-generation boys that were born here in the US.

In my case, it was really during the pandemic that I decided to become much more involved with Latino topics. I raised my hand to be one of the coauthors of the study that we published last year along with the Aspen Institute. I am very happy to be here today, sharing the results of that study and sharing a little bit about my own story as well.

Addressing the opportunity gaps for Latino Americans

Kweilin Ellingrud: Bernardo, let’s begin at a high level. What’s the state of play for Latinos in America? And you were a coauthor on the report overall; I would love to understand the highlights.

Bernardo Sichel: Thanks, Kweilin. Let me first provide some context to the study itself. The study is the first major study that McKinsey has done on Latinos. We were trying to understand the enablers and barriers of Latino economic mobility and the impact that these enablers and barriers have not only on Latinos but on the overall economy.

To do that, we used secondary data, but we also used a survey of more than 4,000 respondents, trying to identify the gaps and potential solutions. The key message of the study—and I think it’s a critical one—is that while there’s evidence that Latinos are pursuing and achieving the American dream in terms of upward mobility, greater education, and middle-class stability, the economic parity of Latinos remains elusive for this group.

Let me provide some detail on the four different roles that we studied during this report, which are Latinos as workers, Latinos as business owners,

 Latinos as consumers, and finally Latinos as savers.

Everybody knows that Latinos are a fast-growing population, and they will represent one in four Americans by 2050. Everybody knows that Latinos are a rapidly growing labor force—they will make up more than one in five workers by 2030 and one in three by 2060.

What is less known is how dynamic this population is. Latinos have rates of intergenerational mobility comparable to Whites. At the lower segments, it’s much higher. For Latinos, if their parents are in the 25th percentile, there is a high chance that their children will be almost by the middle of the road in terms of wealth over time. However, Latino workers have a massive wage gap and underrepresentation in higher-paying jobs.

For example, Latinos receive only two-thirds of what their White counterparts are paid in the same occupations. Latinos that are born in the US represent 18 percent of the overall population. The size of this gap is like $300 billion. To put it in perspective, it is about half of the revenue of a company like Walmart.

If we look at Latinos as business owners, Latino business owners are growing at a huge rate, but they face huge challenges growing and scaling their businesses. Only 6 percent of all businesses in the US are owned by Latinos. Their revenues are only half of that of their White counterparts, and they have higher failure rates. Access to capital is a huge issue. Only one in three Latinos that go to get funding get approval. Three out of four Latinos have to use their personal funds to be able to start new businesses.

If we close this disparity, we’re talking about opening almost 800,000 new firms that will create more than seven million jobs. And that has the potential of creating $2.3 trillion in additional revenues to the US economy.

Finally, the role to highlight here is that Latinos are savers. They have only one-fifth of the wealth of White households, even though they’re growing at a 25 percent increase from one generation to the next. The issue here is low intergenerational transfer.

Only 6 percent of Latino households receive inheri­tances, versus 24 percent of White households. And when they do receive inheritances, it’s only a third of the size. This represents a gap that is more than $400 billion, which is comparable to a lot of the assets under management at many of the large investment firms.

Those are some very comprehensive things that we found in doing the study. And, again, the big picture to bring it back together again is one of growth for Latinos, but there is still a huge gap to fill, especially compared with Whites—and one that needs to be filled quickly if not only this group but also the US economy is going to achieve its goals in the decades to come.

The big picture is one of growth for Latinos, but there is still a huge gap to fill if not only this group but also the US economy is going to achieve its goals in the decades to come.Bernardo Sichel

Kweilin Ellingrud: Thank you, Bernardo. Domenika, your program at Aspen states that it’s committed to diversity of thought and inclusive growth. Tell us a bit more about your work at Aspen.

Domenika Lynch: Our North Star is about wealth creation and wealth building. We understand that the Latino community is so diverse, and the needs are going to be unique depending on the geography of where Latinos live. Our approach is both bottom up and top down.

In 2021, on the heels of confronting the challenges on the ground with the pandemic, we launched the City Learning and Action Lab and focused on how we could help with the equitable recovery of our businesses and strengthen the local ecosystems. We are currently in six Latino-majority cities. Those cities are Miami, Chicago, El Paso, San Antonio, Phoenix, and San Bernardino. We were led to those cities by members of our board but also because there is a high population of Latinos there.

In partnership with the Drexel University team and Bruce Katz, a renowned urbanist, we came together to understand how we can organize local leaders so that we can develop a shared understanding of what the local landscape looks like and how can we maximize this moment of federal investments.

Because the community is so diverse, we knew that what would work in Miami would not work in El Paso or San Antonio or Phoenix. For us, it was important to source local expertise, to understand how to bridge the knowledge gaps through peer learning and community building and also coaching from national experts.

The Aspen Institute’s tremendous convening power also allows us to attract investments in areas that have been overlooked and to understand what policies are necessary to create change and combat some of the disparities we see at the local level. It’s been a work of collaboration, coordination, and action. We’re now a year or so into the program, and we have seen some tremendous changes at the local level.

Kweilin Ellingrud: Bernardo, what one or two facts from the report stood out to you most?

Bernardo Sichel: I would actually share three. The first one, which is not a fact but is the biggest finding that we found, is that Latino economic mobility is no longer a Latino issue, it’s an American one. If we really want, as a country, to achieve our goals in the decades to come, we need to improve in a significant way the Latino participation in our economy. That is the first thing that really stood out to me, because it completely changes the narrative and even the interventions we need to do.

In terms of the positive, the thing that stood out to me is the level of entrepreneurial participation of Latinos. The report states that one in 200 Latinos starts a new business on a monthly basis. Let me give you two more facts around that. The growth rate of Latino businesses is more than twice that of Whites in the US, and that’s just impressive.

But the flip side of that, which is a little bit negative, is that the size of the gaps are astronomical. It really stood out to me that, for example, Latino workers at parity are receiving only two-thirds of what their counterparts in other demographics, especially Whites, are receiving. If you add that up, you’re talking about, in the case of workers alone, more than $300 billion of opportunity.

I would summarize it in those three ways. One is the big takeaway of this study, which is that this is no longer an issue of one demographic, Latinos, but much more a national one. The second one is just how entrepreneurial Latinos are. And the third one is the size of the gaps are still massive and need to be addressed in a very structural way.

Latinos as entrepreneurs

Kweilin Ellingrud: What can we do to better support Latino entrepreneurs?

Bernardo Sichel: If you go and look deeper into the Latino entrepreneurs, you will see things like Latinos are the most entrepreneurial yet still represent only 6 percent of total businesses. In the US, Latino-owned businesses are only 6 percent, whereas the total population is 18 percent, which is only a third of what it should be, if you see it from that perspective.

From a revenue perspective, Latino-owned businesses have only half the revenues of businesses owned by Whites in the US. From an access-to-capital perspective, Latino businesses, in 75 percent of the cases, use their own personal savings and networks to start businesses. Less than 50 percent of Latinos get funding from banks.

We need to change a few things to be able to fix this. Access to capital is absolutely essential. The second thing we need to do is to promote Latino businesses going into areas of the economy that have a higher survival rate and potential for growth.

Kweilin Ellingrud: Bernardo, can you tell me more about how Latinos are starting businesses at a higher rate but then the businesses themselves are growing at a slower rate compared to others?

Bernardo Sichel: Yeah, that is correct, Kweilin. The number of new businesses is growing at a higher rate than other demographics. That growth rate of new businesses is 12 percent for Latino-owned businesses, versus 5 percent for Whites. Once the business is up and running, the growth rate is not necessarily higher, and certainly the survival rate is lower, because they are in some sectors that have higher failure rates and because they lack the capa­bilities needed to scale up their businesses. You’re absolutely right: there is a difference between the number of businesses that are starting and how those are performing once they start.

Kweilin Ellingrud: Domenika, your program at the Aspen Institute states that it’s committed to diversity of thought and inclusive growth. Can you tell us a bit more about your work at the Aspen Institute?

Domenika Lynch: What we do at Latinos and Society is focus on building long-term economic growth and ensure that Latinos have an upward trajectory and that they can fully realize their potential and the American dream. We are great contributors to this economy. We are now quantifying how we contribute to our businesses. We are also more than ever educated and taking advantage of the opportunities in diverse sectors. What we find is that, at large, Latinos are not represented. We are not visible, so we are misunderstood.

The most exciting thing for me about the report that McKinsey did, as a Latina, is that I felt seen by such a big brand, and that had not happened before. I felt that it was great to be seen in an authentic way, where the report wasn’t just pandering to big numbers of Latinos.

Latinos have tremendous potential—$2.3 trillion worth of growth if our businesses grow, 6.6 million jobs created—yet it has stalled. And it could literally be out of reach if we’re not proactive about the interventions necessary.

Latinos have tremendous potential, yet it has stalled. And it could literally be out of reach if we’re not proactive about the interventions necessary.Domenika Lynch

That’s what the work we’re doing at Aspen is about. It is not just having this one report but really taking solutions that are cocreated from the community. That cocreation is what inspires young people to be owners of their destiny and not victims of circumstance.

That is why I’m so proud of Latinos in America: we live to our saying, Al mal tiempo, buena cara—in bad times, a good face. And even in the midst of the pandemic, when we were so hard hit—20 percent of Latinos, in terms of the unemployment rate, had to leave the workplace to take care of their children and their parents—we were still hopeful groups and positive and ventured out to start more businesses. Many of them are driven by young people that, in seeing their parents fall a little bit into despair, refuse to do so.

I think that is the story of America. I don’t see a difference between the Latino community and what the American narrative is and how it’s been for Italians and Irish and every other group.

The report captured it, but the report is also a tale of if we don’t do anything about it, if we don’t intervene to bring the resources to this community, it’s too large of a community to fail. It will bring the rest of the country down. That’s why it’s not a Latino issue, it’s an American issue.

Kweilin Ellingrud: So powerful, Domenika. Thank you for sharing that. Bernardo, what are your thoughts on mentorship for the Latino community?

Bernardo Sichel: Beyond mentorship, which is absolutely critical, the Latino business leaders have a huge responsibility. Think about how inspirational someone like [Walgreens Boots Alliance CEO] Roz Brewer is and the role she plays with women and with African American women in the community.

Many business leaders decide to put on hold getting involved until after they retire from whatever roles they have. I think that needs to change. A lot of it has to do with role modeling, and a lot of it has to do with inspiration. I think Latino leaders, myself included, need to get involved earlier. Beyond just formal mentorship, there’s a lot of role modeling and inspiration that we need to provide to our people.

Shrinking the Latino wealth gap

Kweilin Ellingrud: We talked about the dynamics within the Latino economy and the community’s economic outlook. Now let’s dive deeper into potential solutions. Latinos have a sizable wealth gap compared to their White peers, and median Latino wealth stands at about 20 percent of that of White households. Bernardo, can you help us drill down into this a little bit more? We know that US-born Latinos, for example, have greater wealth and income prospects compared to foreign-born Latinos. Why is this?

Bernardo Sichel: It’s in big part because of opportunity. You know, first-generation Latinos go through the educational process and have access to better jobs than maybe their parents did. It is about going through the whole journey and process that allows them to have better outcomes in terms of income. The income over time then generates the wealth that builds from one generation to the next.

Kweilin Ellingrud: Domenika, how can we ensure that foreign-born Latinos have access to sustainable and inclusive growth earlier in their immigration journey?

Domenika Lynch: When we think of new immigrants, it’s really important to think about how we create on-ramps to integrate them into mainstream living. When we don’t do that, they become a subset of the community, and then they’re not able to plug into the resources.

For Latino entrepreneurs, for example, the journey is always one that if the job opportunity doesn’t present itself, then you create it. You create it based on the talent and the skills you have. Whether it’s a good meal you can cook or a clean home you can have or a beautiful garden or landscape that you have, then that becomes sort of your first point of entry, and that helps you to start connecting with others. However, if you don’t have the education or a plug-in to the resources to grow your businesses, to understand financial systems, to be able to market yourself as a professional, then you’ve created just another job for yourself, and you will not have the opportunity for economic mobility or ability to scale your business.

For foreign-born Latinos who came for economic opportunity in the United States, it’s important to have Hispanic Chambers of Commerce. It’s important to have entrepreneurs serving organizations that are culturally competent and culturally relevant as they are welcoming new Latino immigrants.

Professional Latino immigrants—those that have degrees or are architects or dentists or lawyers in their own countries—also struggle because their degrees are not valued like they are in their home countries. They also have to connect to networks. Through those networks, they can understand how they can get certified once again or what kind of credentialing they need in this country. It’s a tragedy when you have a former dentist who is unable to get those new credentials and remains a taxi driver years later, after coming to the United States.

Onboarding professionals, especially if they don’t have family or community networks here, is extremely important. It’s access, but it’s also the infrastructure of opportunity that needs to be offered by that local community.

Kweilin Ellingrud: Bernardo, I want to explore a bit more this median wealth gap. Latinos have about 20 percent of the household wealth of white households. Why is that? How should we think about it?

Bernardo Sichel: The majority of the difference between wealth that you see of Latinos and non-Latinos happens because of intergenerational transfers. We are talking about inheritances between one generation and the next.

The huge difference that happens there is that only 5 percent of Latinos get intergenerational transfers, compared with more than 20 percent of Whites. And when Latinos do receive an inheritance, it’s a third of the size of what Whites receive. So their starting position is very different, not only because of the income that they’re generating but because of, again, the starting point they have.

That also explains why, from one generation to the next, you see those differences happen. It’s because the next generations not only get higher income, but they have a little bit of a better starting point than what their parents had when they arrived at the US. That’s one of the most compelling explanations of why the difference persists, but it’s also one of the reasons why this is something that’s going to take generations rather than years to be solved.
Latinos as consumers

Kweilin Ellingrud: We’ve explored Latinos as workers and their economic mobility. We’ve explored them as ntrepreneurs, as well as in terms of their wealth gap. I’d like to shift now to Latinos as consumers. The report states that there’s about $160 billion yearly of unsatisfied demand for Latino consumers. What can we do to better address the needs of Latino consumers?

Bernardo Sichel: What is driving that is really three factors. One has to do with access. The second one has to do with income. And the third one has to do with satisfaction with the products and services that are out there.

Going one by one, one is about access—just making sure that Latinos where they live have access to all the different categories of products and services they would be able and would be willing to pay for if they were available. It is no surprise for us to talk about food deserts, but it’s a lot more than just food deserts. It’s across many different categories, including telecommunications, housing, and others—health, et cetera.

The second one has to do with income, which is an obvious one. As income goes up, Latinos will have higher access to products and services they could not pay for before. I think the recent COVID-19 pandemic was a great example of how vulnerable this particular part of the US population is, as they had the biggest drop in terms of employment, in terms of consumption, of any demographic group.

Then the final thing has to do with satisfaction, and that is really providing products and services that cater to the needs and preferences of this population. It’s interesting, because we came up with and we’re doing a study now that goes into much more detail, but in many cases, we’re talking about Latinos willing to pay 10 percent or higher premiums for products and services if they were catered to their specific needs. This is not only a matter of language, but also a matter of the products and services really fulfilling the desires and needs that this part of the population has.

Kweilin Ellingrud: Domenika, what would you like to see from business leaders, from policy makers, to address this Latino consumption gap?

Domenika Lynch: What I found interesting in how McKinsey framed the consumption gap—and I hadn’t thought of it this way before—is how Latino businesses are uniquely positioned to fill that gap because they understand the nostalgia for certain products from their home countries but also specific needs for the Latino community.

It got me thinking about the access to capital and the support to understand how to grow their businesses, but you have a group of people that intuitively know the market without having all the analysis. They know what’s missing because they’re missing it, and they put together business plans to satisfy as best they can. What we need are more innovations around financial products—quality financial products that can help Latino businesses scale their companies.

I am really excited to work with companies like Coca-Cola. Thirty percent of the Coca-Cola bottlers in the United States are Latinos. So they’re going to understand certain drinks that are reminiscent with certain foods in the Coca-Cola family, and Coca-Cola has bought some of these products.

Those are the things that need to happen more and more. It’s a cocreation. It’s a public–private partnership where we’re seeing our products made by Latinos for Latinos, so we’re creating wealth, we’re satisfying the demand. That’s what’s so unique about the McKinsey report: that it didn’t just offer up Latinos for consumption. It is not “Oh, they need more shoes; Nike, please make more shoes.” It’s more about “Well, maybe there is a Latino version of Nike—our own company that can compete for the market.”

If there was a more intentional effort to understand the potential of the Latino market going into businesses and satisfying the consumption needs, then that’s exciting. I’d like to profile more and more of those companies.

Progress toward greater economic opportunity

Kweilin Ellingrud: I’d love to shift to looking at where we are today but in a more historical perspective. Bernardo, let’s start with you and then shift over to you, Domenika. Where are you seeing progress in access to this Latino economic opportunity?

Bernardo Sichel: I think that the trends are very clear. Even if you take the four different roles that the study took, in each one of them, you see structural progress in the last few years, maybe with the retrenchment that we have seen during COVID-19.

The trend is very clear. It’s very clear in terms of intergenerational mobility. That’s maybe where you have the highest level. I’ll give you a number here that was really surprising when we did this study. For parents who were in the 25th percentile, their children have the chance of being in the 46th percentile. The growth in terms of mobility is absolutely fantastic and is happening all over the place.

To me, it’s much more about how can we accelerate this to achieve the entire potential of the demo­graphic. It’s going in a positive trend; it’s just not going fast enough. As we discussed in the beginning of our conversation, this is no longer an issue of Latinos alone. If this trend doesn’t accelerate, it’s going to have an impact on the overall economy.

Kweilin Ellingrud: Domenika, in your interactions with young Latino leaders, are you seeing progress—a change in culture or the optimism you were mentioning before?

The growth in terms of mobility is absolutely fantastic and is happening all over the place. It’s going in a positive trend; it’s just not going fast enough. Bernardo Sichel

Domenika Lynch: I am. I see young people that are socially and consciously aware, not only of their own progress but of the power of investing in their education, of being also connected to brands and businesses that do good for our community and that are inclusive of our own narrative.

I have a grown son, and he’s very intentional about how he shops. It’s really important for him that we support products and businesses that do good by the community—by Black, Latino, and Indigenous communities. We know that in general with Generation Z, the millennial generation; we already have seen that.

I’m optimistic. The one piece I worry about is a little bit of getting frustrated and discouraged. There are some hard challenges, from climate change to even as we tackle structural racism and discrimination. Change isn’t going to happen overnight. It’s going to take intentionality from all of us. And optimism is a requisite for change; there is no substitution for it. That’s what makes me both excited and a little nervous about when we all get too frustrated in our silos, because cynicism is really what we have to guard against. But overall, I’m very optimistic.

Creating a more sustainable, inclusive future

Kweilin Ellingrud: Thank you both for sharing your insights with us today. I love the examples of different Latino brands, the examples of the racial wealth gap, and also the state of entrepreneurship and more businesses starting in the Latino community, but there is a real gap in terms of financing and growth.

We’re wrapping up each of our Future of America episodes with a rapid-fire Q&A. Domenika, I’ll start with you. Is there a book or an article you’ve read recently that excites you about a more sustainable and inclusive future?

Domenika Lynch: Yes. Absolutely. A book that was written during the pandemic by a woman, and it’s called What We Owe Each Other: A New Social Contract for a Better Society. It’s written by Minouche Shafik; she is the director of the London School of Economics.

I was so inspired by it because one of the first stories that she opened up with was about being in Ecuador, which is my home country, and witnessing the birth of a little girl in the Amazon forest, and how her parents were going to name her after the author, Minouche. She wandered the trajectory of these two lives. In this moment of the pandemic for her, it’s really about all hands on deck and recognizing the interdependency that we have, all around the world. The pandemic brought us together—how what affects one of us affects all of us.

She also gives some solutions, and most importantly she made me very aware of, even in the United States, how many generations it’s going to take to go from low income to middle income in different countries. I was a little heartbroken to read that in the United States, she projected five generations, which is not my experience and isn’t the experience of that story I opened up with—that from one generation in this country, you can go from cleaning a fancy hotel to becoming a medical doctor.

I highly recommend it. It’s very inspirational and very timely. There is a lot of good wisdom there.

Kweilin Ellingrud: What makes you optimistic that we can achieve sustainable and inclusive growth?

Domenika Lynch: Local and national leaders. The work of the Aspen Institute, convening thoughtful people that care so much about human progress—our collective, shared humanity and good life experience. It’s a short life. To bring people together, to roll our sleeves up and to say, “We can change this” is important. I think that as long as we can see it at the local level and then bridge that with national leaders, real change will happen. That’s what makes me optimistic, particularly in where I am, where I sit, at the Aspen Institute.

To bring people together, to roll our sleeves up and to say, ‘We can change this’ is important. As long as we can see it at the local level and then bridge that with national leaders, real change will happen. Domenika Lynch

Kweilin Ellingrud: What is the one thing that listeners can do today to help promote sustainable and inclusive growth for Latinos in particular?

Domenika Lynch: Through this journey, if we’re talking about scaling and accelerating change, like Bernardo said, it is important to be mindful of your own company’s habits, where you work, and even companies that we own.

For example, at the Aspen Institute, I’m now sitting on the procurement committee. I really want to understand who our suppliers are. If there is an opportunity to create spaces for Black, Latino, and Indigenous businesses, so that we can walk our talk, especially at the Aspen Institute, we do that.

I’m really proud that my colleagues are very intentional. We’ve learned that in moments of crisis, change is very difficult. It’s necessary, but it’s also very difficult. When it comes to how we procure services and goods, efficiency will always trump equity. Always. So we have to be careful and mindful. I’m paying more attention where I work in terms of our procurement habits and making sure that that’s a door we can open and be intentional about.

Kweilin Ellingrud: Thank you, Domenika. Bernardo, I’d love to shift to you. Is there a book or an article you’ve read recently that excites you about a more sustainable and inclusive future?

Bernardo Sichel: As part of the work that I do combining consumer and technology, I went back to an article in a presentation by a South African author named Busi Radebe at Harvard’s Growth Lab, at the Symposium on Inclusive Growth and Development. It’s called “Re-inventing the corner store.”1

The premise of what he came up with is how to give access to technology and how to build an ecosystem of corner stores so that the stores can not only have more access to financial services but also create some scale in procurement and generate jobs and well-being for the owners of those stores.

There’s certainly no reason why that’s something that needs to be confined to South Africa or Latin America or other emerging markets. It’s very much the reality of many Latinos in the US. When I saw that, I was inspired and thought about the impact it could have at home.

I really recommend it. The paper is dense, but the presentation at the Growth Lab at Harvard is very inspiring.

Kweilin Ellingrud: Wonderful. What makes you optimistic that we can achieve sustainable and inclusive growth?

Bernardo Sichel: I would say two things from my side. The first one is the resilience I have seen from Latinos during COVID-19. The other is awareness, despite the political rhetoric, that inclusivity is an absolute must to achieve our common goals in the future. I would say those two things give me hope that we are heading in the right direction.

Kweilin Ellingrud: What’s one thing that listeners can do today to help promote sustainable and inclusive growth?

Bernardo Sichel: I think it’s critical not to leave this to policy makers. It’s about our daily decisions that make a difference at the end of the day. If you’re a business owner, I would say, provide equitable pay. Most likely, those frontline workers that you have are Latinos. Also, create job opportunities and internships, et cetera, for Latinos. That would be amazing.

For consumers, as Domenika touched upon, it’s about our daily choices on what we buy and what we consume. It is about the little things that each one of us does on a daily basis that make up the big impact over time.

Kweilin Ellingrud: Thank you, Domenika and Bernardo. That was Domenika Lynch, executive director of the Latinos and Society Program at the Aspen Institute, and Bernardo Sichel, a partner in McKinsey’s Chicago office. I’m Kweilin Ellingrud. You have been listening to McKinsey’s Future of America podcast series. Thank you for joining us.

ABOUT THE AUTHOR(S)


Kweilin Ellingrud is a director of the McKinsey Global Institute and a senior partner in McKinsey’s Minneapolis office, and Bernardo Sichel is a partner in the Chicago office. Domenika Lynch is executive director of the Aspen Institute Latinos and Society Program (AILAS).

Comments and opinions expressed by interviewees are their own and do not represent or reflect the opinions, policies, or positions of McKinsey & Company or have its endorsement.

Addressing Disparities in Finance for Hispanics and Latinos

Source: https://tinyurl.com/2p9cy4jp

By: Vianessa Castaños |

 

One of the most significant social issues facing Latinos in America is the myriad obstacles preventing them from building a secure financial future. These financial disparities begin with high-interest lending services, insufficient credit history and higher than average student loan debt, among other factors.

The effects of these disparities appear in the demographics of rental and homeownership rates in many areas. While the homeownership rate among Hispanics increased by 47.5% since 2019, many younger Latinos find that their path to homeownership and financial security are hindered by monthly student loan repayments, which in turn prevents many of them from being able to build up their savings. Meanwhile, other more vulnerable members of the Latino community, such as immigrants and non-native English speakers, face challenges with predatory lending practices and unfavorable financing options.

5 Financial Barriers and Solutions

There are a number of obstacles that prevent the Hispanic and Latino community from being able to grow their savings and achieve their financial goals. Learning to save, predatory lending practices and poor or insufficient credit history are just some of the major barriers that prevent the community from reaching financial stability. And when each of these factors compound, many find themselves in a situation where they are unable to invest their money and create generational wealth.

1. Learning How to Save and Make Investments

Many Latino immigrants are unbanked, meaning that they don’t rely on financial institutions to deposit and save money. This practice stems from a lack of distrust in the financial institutions in their home countries, coupled with a lack of financial education in general. It’s also common for individuals to put their funds toward caring for family members or supporting their children through school rather than saving for their own retirement. And while many Latinos are responsible with their finances, they lack money mentors within their communities who can teach them how to properly plan for retirement or provide guidance on making financial investments.

BEST OPTIONS TO MANAGE SAVING AND INVESTING

If available, take advantage of your employer-sponsored 401(k) or brokerage account. Also, consider an additional savings vehicle, such as an individual retirement account (IRA), Roth IRA or certificate of deposit (CD), which is a type of low-risk federally insured savings account.

2. Predatory Lending Practices

The Hispanic and Latino community can often have limited access to financial literacy materials, which means the community can be left without the tools necessary to manage finances and build up savings. Limited access to resources coupled with the potential financial implications of maintaining a commercial bank account can push individuals to rely on predatory alternative financial services that may be mortgage scams, which can charge upwards of 400% APR. In 2017, people who relied on alternative financial services such as payday loans, check cashing services and rent-to-own stores ended up spending more than $173 billion in fees and interest charges.

BEST OPTIONS TO MANAGE PREDATORY LENDING PRACTICES

Whenever possible, seek out a commercial banking institution and avoid or limit the use of products that do not actually help you build your credit, such as prepaid credit cards. While you may think that you are banking with an accredited institution, many alternative “banking” entities charge above-average interest rates. They may not carry insurance, thereby putting your investment at risk while at the same time doing nothing to help build your credit-worthiness.

Juntos Avanzamos works with a network of 108 credit unions in 26 states that serve to empower Hispanic and immigrant communities. These credit unions will work with you to open a checking or savings account and establish your credit, even if you don’t have a social security number.

3. Limited Access to Credit and Low Credit Scores

The median FICO credit score for Hispanics was 684 in 2018. Compare that to 742 for non-Hispanic whites and 722 for the overall population. You can get a picture of the discrepancy between each demographic. These lower credit scores can be attributed to limited access to credit-building opportunities as well as limited knowledge and access to information on how to build and maintain a healthy credit score. And because credit-worthiness is taken into account when qualifying for loans and mortgages, aspiring Hispanic homeowners can often find their options for financing a new home limited, or they are unable to secure a conventional home loan or down payment altogether.

BEST OPTIONS TO MANAGE LIMITED ACCESS TO CREDIT AND LOW CREDIT SCORES

The first step to improving your credit score is getting a copy of your credit reports from the three nationwide credit reporting companies — Equifax, Experian and TransUnion. You can easily do this by using an online credit report, like a credit report from Central Source LLC, which grants you access to all three credit reports for free once a year. By knowing your credit score isn’t enough, you’ll also want to understand what that score means, which is where the list of consumer reporting companies from the Consumer Financial Protection Bureau can help. The website offers a broad range of financial education materials in nine languages on topics ranging from how to rebuild your credit to how to get a home loan, all available for free.

4. High Cost of Buying a Home Relative to Income

Because Hispanic populations tend to be more concentrated in high-cost markets, the homes Hispanic and Latinos buy are valued at lower than median market rates. But they are more expensive overall relative to their income level. While the majority of Hispanics finance their homes through traditional methods, they disproportionately have to rely on FHA insured mortgage loans. These loans often end up being costlier and can negatively impact lifetime wealth-building potential. Another instance in which Hispanics and Latinos can find themselves in a high-cost market is due to gentrification. Real estate appreciation can often lead to displacement and sees many families priced out of their own communities. Gentrification drives up housing costs and demand for low wage workers, who then, in turn, cannot afford to buy homes in their very communities.

BEST OPTIONS TO MANAGE HIGH COST OF BUYING A HOME RELATIVE TO INCOME

Down payment assistance programs exist to help homebuyers find loans and grants that can help drive down the cost of your potential down payment. These programs are typically meant for first-time homebuyers, but depending on the program, some exceptions can be made. You can also contact local community organizations in your state to inquire about homebuyer education programs that can teach you what to expect when buying a home — from how to select a mortgage to how to negotiate the selling price.

5. Student Loan Debt

Many Latinos are first-generation college students who are left to navigate higher education costs without much guidance. And while there are options for financial aid for Hispanic students available, 72% of Latino students take on student loan debt in order to attend university. In fact, 12 years after starting college, the median Latino student borrower still owes 83% of their initial loan. This debt affects their ability to save money well into adulthood, which is further compounded when they become delinquent or default on payments.

BEST OPTIONS TO MANAGE STUDENT LOAN DEBT

This financial literacy handbook is a great place to start learning about managing your money and navigating major expenses. Also, check out The Hispanic Center for Financial Excellence — it offers free financial education services and can teach you how to reduce your debt and develop a savings strategy.

Expert Insight on Navigating Financial Constraints

What are your own observations about the financial disparities within the Latino/Hispanic community? Why do you think these disparities exist?
Student loan debt is seen as a major barrier to financial security for many. Can you offer any advice on how to tackle (or avoid) student loans?
What are some tips to start saving and develop a strong relationship with money for Hispanics and Latino?
What are the best ways for Hispanics and Latino to get educated on finances? Are there any specific resources you recommend?

Financial Resources for the Hispanic and Latino Community

There are many resources available to help in your journey to financial success. From debt management programs to scholarships and mortgage financing assistance, these organizations and programs can help you get ahead.

Financial Services and Programs

Latino Educational Fund: LEF’s financial literacy courses provide Latinos with the knowledge they need to make informed decisions about their futures and their families’ futures related to banking, credit, bankruptcy and mortgage lending.
Fuente Credito: Fuente Credito, a small-dollar credit pilot program coordinated by UnidosUS, facilitates access to affordable loans. It offers an online credit application designed to provide fast and personalized options for immigrants who need assistance in financing immigration fees related to Deferred Action for Childhood Arrivals (DACA), citizenship or other legal services.
FDIC Money Smart: Money Smart offers a Spanish-language financial education program to help individuals improve their financial health.
Free Financial Literacy Course: This six- to 10-hour course from Alison concentrates on the basics of personal finance. From budgeting and saving to debt management and retirement planning, this class aims to improve your overall financial literacy to ensure you can manage your today and plan for tomorrow.

Technical Tools, Apps and Assistance

Mortgage Calculator: MoneyGeek’s simple and free mortgage calculator helps you estimate your monthly mortgage payment with the principal and interest components, property taxes, homeowner’s insurance and HOA fees. Once you input the numbers, you’ll see a detailed mortgage payment schedule.
Mission Asset Fund: MAF offers loans to help individuals cover their immigration expenses; part of the process includes a financial education course. You can download their app to track your progress, review your loan and track your payment history and credit score.
Mint: Mint is a budget tracker and planner that helps you easily manage your finances. One feature that makes this app so appealing is that it allows you to track your credit score for free.

Professional Organizations

Association of Latino Professionals in Finance and Accounting (ALPFA): The ALPFA provides professional development and career-building opportunities for Latinos. They partner with several educational institutions to help educate Latino leaders in finance.
Hispanic Heritage Foundation: The White House founded the Hispanic Heritage Foundation in 1987. It offers a series of free podcasts and videos focused on money management, debt management and wealth mindset, along with programs to promote leadership and education within the Hispanic community.
Congressional Hispanic Caucus Institute (CHCI): CHCI provides leadership, public service and policy experiences to Latino students and young professionals.
American Society of Hispanic Economists: This professional association of economists is focused on addressing the under-representation of Hispanic Americans in the economics profession. Its work centers on researching policy and economic issues affecting Hispanics in the U.S.
National Organization for Hispanic Real Estate Professionals (NAHREP): The NAHREP work to champion homeownership in the Hispanic community. They are advisers and advocates who are available to help Hispanic families create generational wealth.
United States Hispanic Chamber of Commerce (USHCC): The USHCC promotes the economic growth and development of Hispanic businesses. It provides support to small and minority-owned businesses.
The Hispanic Institute: The Hispanic Institute manages several ongoing projects, including the study of Hispanic economic contributions, media monitoring, consumer fraud protection, citizenship education and technology and telecommunication research.
New America Alliance: This organization of American Latino business leaders promotes the Latino community's economic advancement, focusing on economic and political empowerment and public advocacy to improve the quality of life in the United States.

Advocacy Organizations

UnidosUS: Formerly known as NCLR, Unidos serves the Latino community through nearly 300 affiliates throughout the country. It provides advocacy in civic engagement, civil rights and immigration, education, workforce and the economy, health and housing.
Mission of the League of United Latin American Citizens (LULAC): LULAC is to advance the economic condition, educational attainment, political influence, housing, health and civil rights of the Hispanic population of the United States.
Hispanic Federation (HF): Established in 1990, HF is a nonprofit organization to support the Hispanic community, families and institutions. Its work includes education, health, immigration, civic engagement, finances and the environment. HF offers advocacy services, community assistance programs and capacity-building opportunities.

Community Support Groups

Healthy Hispanic Living (HHL): HHL fosters wellness and quality of life for Hispanics by focusing on all aspects of health — physical, mental, financial and societal. It works to include issues and concerns the community faces from a cultural perspective.
Arte Sana (Art Heals): Arte Sana is a nonprofit organization dedicated to eliminating sexual and gender-based violence. It offers cyber advocacy and survivor activism, prevention and survivor empowerment through art, and training courses on sexual assault in Spanish and English.
National Compadres Network: The National Compadres Network is an organization that works to decrease issues such as domestic violence and child abuse, substance use, gang violence, racial inequity, teen pregnancy and issues around heterosexism. Its goal is to enhance and re-root individuals, families and communities by honoring, rebalancing and redeveloping their traditions, values, practices and identities.

Housing Resources

U.S. Dept. of Housing and Urban Development (HUD): HUD offers housing counseling to help consumers make informed housing decisions. HUD works with organizations, such as UnidosUS, in developing and supporting Latino homeownership programs in various states across the country.
Homeownership Assistance Programs: MoneyGeek’s very own guide to help you better understand the homeownership process. Here, you can find information on grants, loans and home purchasing programs.
Federal Housing Administration (FHA) Loan Requirements: This MoneyGeek guide provides educational resources to educate home buyers about FHA, VA and USDA government-insured mortgage loans.

Scholarships and Financial Aid

Scholarships for Hispanic Students: MoneyGeek offers a full, comprehensive guide to finding scholarships and resources for Hispanic students.
Hispanic Association of Colleges and Universities (HACU): HACU is an advocate for Hispanics in higher education and offers a number of resources, including a scholarship resource list.
TheDream.US: This is the largest college access program for DACA recipients and undocumented students. They offer scholarships to those who do not qualify for federal financial aid or in-state tuition due to their residency status.
FAFSA: The Free Application for Student Financial Aid (FAFSA) is a U.S. Department of Education service for applying for federal financial aid for students.

Health Resources

Medicare Advantage’s Latino Health Resource Guide: Medicare Advantage compiled this resource guide for Latinos and Hispanics to find health care providers by state and categories, such as dental, senior care and caregiving, substance abuse and mental health. This guide is available in Spanish and English.

About the Author

Vianessa Castanos formerly worked as a scriptwriter and producer for personal finance adviser Ramit Sethi of I Will Teach You to be Rich. She is also a culture & lifestyle writer who specializes in issues pertaining to the Latinx community in the U.S. and abroad.

A new approach to keeping talent

Source: https://tinyurl.com/3k2hw5pe

Written by: Anu Madgavkar is a partner in McKinsey’s New Jersey office.

Human capital is the knowledge, attributes, skills, experience, and health of the workforce, and it accounts for roughly two-thirds of an individual’s total wealth. Right now, people are fundamentally reconsidering what they want to do with their human capital—reassessing how they want to engage with work, who they want to work for, what kind of work they want to do, and on what terms they want to do it. So this is a critical moment for companies to reconsider the way they think about their employees’ human capital.

Typically, companies think about how to deploy human capital to create value for the company. But human capital is really possessed by workers, who are making decisions all the time to augment and enhance their human capital. Being at a company is just part of that journey. So companies that want to retain employees and make the most of their human capital would be wise to focus on human capital from the perspective of the individual. Thinking about how to enrich that individual’s journey can be a more promising frame of reference than thinking about, “How can I profit from these people?”

Our research shows that about half of what people earn during their lifetime is associated with the skills they gain through work. That’s a huge number. A lot of previous research has focused on the value of education, qualifications, and credentials as you enter the workplace. Those are important, but the decisions you make regarding the roles, the jobs, and the skills that you acquire through your work life will drive your earnings. That’s even more true for people who don’t enter the workforce with top credentials. For example, for tile setters or counter workers in the US, the value of the skills they develop at work is more like 65% to 75% of lifetime earnings.

If companies think about themselves as part of that human capital accumulation journey, they’ll change the kind of investments they make in and the opportunities they create for people. There are three key mind shifts to consider.

75%

of the lifetime earnings of some workers lacking top entry-level credentials can be attributed to the skills they acquire on the job

The first shift is for companies to start assessing people based on their potential, not just based on success in their current role. We already know that workers are capable of great learning. New roles in the US typically involve 30% new skills, and workers who are upwardly mobile, who improve their compensation and earnings faster, typically take on roles that demand an average of 40% new skills. But companies often don’t act as if this is the case. Too often, they search for the perfect fit. That’s too bad: you’re not looking for a clone, you’re looking for somebody who has what it takes. Smart companies are already making big investments to assess people for their potential. Some tools are structured to evaluate, say, whether employees have a certain set of necessary tech skills. Others might look at patterns of behavior to assess whether the person is entrepreneurial and capable of stretching beyond their current role.


The second shift is for companies to embrace the idea of mobility. Companies should get on the better side of the change dynamic we’re seeing during the Great Resignation.

We see three ways companies can do this. First, embrace internal mobility. Some companies build the equivalent of a digital talent marketplace, a place where you can see how the skills that you have fit into different career pathways. Some even overlay this with career advisory support to help counsel workers wanting to find good paths to follow.

Second, be open to different kinds of mobility paths. Companies often think about mobility as very linear and vertical. But companies that focus on lateral movement create more opportunities for workers trying to build their human capital. Employees want the flexibility to decide, “Here’s an opportunity for me to learn something, even if it’s not a promotion that involves higher pay.”

Third, companies can embrace people who leave their job just as much as they embrace people who join the team. People who leave a company see a future. They’re investing in becoming great professionals. They could be good business partners, or even potentially a source of talent going forward. The more you celebrate such people the more you position yourself as an employer who helps make employees successful. Such companies become talent magnets.

The third mind shift is to double down on smart learning and training for workers. A lot of companies complain that they don’t see productivity gains commensurate with the amount they spend on training. We think companies need to focus more on learning that’s experience-based, anchored in people’s jobs. Structured training is very important when people need to pick up specific technical skills. But so much of what makes an employee successful is more likely to arise out of mentorship and apprenticeship. Apprenticeship is where employees really learn the soft skills that allow them to use their hard skills in work environments that are, let’s face it, fuzzy and unpredictable. And that, after all, is what we all really value in the human worker, as opposed to a machine.

American Leadership Forum Brochure (2022)

 

American Leadership Forum (ALF): Donation Opportunity

I’m thrilled to share that I’ve been accepted into the 2022 Class 56 of the American Leadership Forum Houston/Gulf Coast Chapter, and I need your help to participate. My application was chosen from more than 230 applicants to fill one of the 26 slots open this year.

They were impressed with why I started STC Consulting: to increase business financial literacy among the Latino community. The higher the financial expertise, the higher the chances to thrive and impact the community.

This Leadership Forum is a prestigious opportunity for me to grow my mission to promote financial literacy and support Latino and other diverse small business owners in Houston.

How does it work?

The American Leadership Forum (ALF) is a nonprofit organization whose mission is “to join and strengthen diverse leaders to serve the common good.” Link: https://www.alfhouston.com/

This is a transformative 12-month leadership program designed to develop skills and knowledge in transformation dialogue, adaptive and collaborative leadership, emotional intelligence, and social change. The program also emphasizes inner reflection and personal growth as essential components of effective servant-focused leadership.

ALF provides the opportunity to broaden and strengthen my leadership so I can make a bigger impact by sharing my knowledge and expertise as an immigrant, woman, entrepreneur, executive, financial public speaker, role model, and more.

How can you help?

I have been awarded a partial scholarship, but I still must cover the balance of the tuition, which is: $5,000.00. So, I am asking you to make a tax-deductible donation toward this fundraising goal by Friday, June 24^th, 2022. Choose the tier of giving that works best for you:

• Platinum Donors of $500.00 or more will receive a 2-hr hour Financial Management Consultation (*).

• Gold Donors of at least $250.00 will receive a 1-hr Financial Management Consultation (*).

• Silver Donors of at least $100.00 will be invited to a 1-hr Zoom call for Questions & Answers on topics related to Financial Management and Business.

• If you cannot give in these amounts, any amount will mean the world to me.

• (*) In your consultations, we can work on budgets, financial goals for 2022, profit and loss forecasts, financial literacy, how to start a business, and many other key business financial topics.

How to donate?

• You can go to the ALF donations form and be sure to include in the Special Instructions that you’re supporting me, Soledad Tanner. (**). This is a tax-deductible donation. If you donate directly to ALF, please send me a copy of your donation confirmation to thank you personally.

• If you prefer to send the donation directly to me, that will work too. You can transfer using Zelle (You can find me with my mobile number (832) 998-2136 or my email address: Soledad@SoledadTanner.com) or mail a check mail to: Soledad Tanner at 2503 Robinhood Dr. Suite # 150, Houston, TX 77005. This is not a tax-deductible donation.

You’ll support me in helping me share +30 years of experience helping small, medium, and large businesses start and scale widely—significantly to uplift minority communities.

Thank you in advance for your generosity! I sincerely appreciate it!! Muchas gracias,

Soledad Tanner, MIB

The economic state of Latinos in America: The American dream deferred

 

Women in the workplace 2021

 

Latinos Accounted For 50%+ U.S. Growth In Past Decade

Source: https://tinyurl.com/y7vnhehr

Written by: Karla Fernandez Parker , Columnist, August 27, 2021

(Source: Latest US Census)

1.Latinos drove population growth in the U.S., having increased from 50.5 million in 2010 to 62.1 million people in 2020. That accounts for 51.1% of the overall population growth of 22.7 million. By contrast, the general population in the U.S. only grew by 7.4% during the same period.

2.Latino businesses accounted for 80% of all net new businesses created in the past 10 years.

Soledad Tanner, M.I.B

The figures are out from the latest U.S. Census, and it’s clear Latinos drove population growth in the U.S., having increased from 50.5 million in 2010 to 62.1 million people in 2020. That accounts for 51.1% of the overall population growth of 22.7 million.

By contrast, the general population in the U.S. only grew by 7.4% during the same period.

The states with the highest percentage change of Latino growth in the past decade were Pennsylvania (45.8%); North Carolina (39.8%); Florida (34.9%); and Georgia (31.6%). Add to this the fact that Latino businesses accounted for 80% of all net new businesses created in the past 10 years, and we can clearly see this economic engine is becoming more powerful.

Latinos account for 18.7% of the total population, meaning nearly one in five Americans are Latino. Looking at the U.S. population in general, 53% of people under the age of 18 are persons of color. Practically every major metropolitan area saw population growth, while the population of rural areas continues to decline.

So where are the retailers in all of this? Retail marketers continue to woefully underspend on the Latino market -- and take a generic view of this extremely diverse group of Americans who span a myriad of skin tones, racial backgrounds, levels of acculturation, and countries of origin and identity.

Ad agencies have made little progress in diversifying their employee rosters. The proof is in the advertising product that continues to treat the Latino market as a monolith. In an age when we can narrowly target by diet selection, neighborhoods, and brand affinity, one can only think marketers are reluctant to recognize how powerful this segment has become and would rather stick with demographics they are comfortable with.

The reality is advertisers keep taking the easy way out at the expense of increased profits. We have more evidence than ever that the Latino population has more spending power, is in major metropolitan areas, and is driving small business creation as well as gaining in higher education attainment.

It’s way past time to look at who is on your marketing team, at your ad agency, and in your marketing messages.

The CEO of management consultancy Korn Ferry on how to become a 'radically human' leader

Source: https://tinyurl.com/ysupudkd

 Gary Burnison

It's been a longstanding idea in business that emotions should be kept out of the workplace. Whatever's going on in your personal life, you leave it at home so you can bring your most productive self to work.

But in a year when so many lines have become blurred — when home has become work and people are so exhausted they couldn't possibly leave their personal experiences at the door — it's clear that this old-fashioned idea can't hold up much longer.

And according to Gary Burnison, CEO of management consulting company Korn Ferry and author of "Leadership U: Accelerating Through the Crisis Curve," it's up to leaders to model a new way forward.

"I think that what the world is calling for now is radically human leadership — leadership that's based on humility, on not just showing empathy but having empathy, on being vulnerable, on being authentic," he told Insider.

While it's pretty obvious how leading this way would create a more enjoyable workplace for employees, Burnison shared that it'll also lead to higher productivity and success.

"People want to know that they're part of something bigger than themselves," he said. "They want to grow, they want to learn, they want to be loved, and they want to know what they do matters to somebody else. And our research clearly shows that companies that do those things will outperform."

Burnison has seen this play out successfully as Korn Ferry has navigated the pandemic. Despite having to make a lot of hard decisions as a company, like the layoffs that so many faced, they did it in the most humane way they could and made sure to be there for their employees along the way — and now are seeing business levels that have bounced fully back to normal.

If you're used to keeping emotions at a distance in the workplace, learning to become a radically human leader can feel foreign. Here are a few ways Burnison suggested getting started.
Begin with yourself

Being a radically human leader has to start with you.

"I don't think you can be a radically human leader unless you yourself are radically human," Burnison said. "That starts with looking in the mirror and candidly saying, 'Where are my blind spots? Where are my strengths? What are my weaknesses?'"

In particular, Burnison recommended taking a hard look at how you and your organization deal with failure. If failure is punished rather than encouraged, your employees may never feel comfortable opening up the things that are making it hard for them to do their jobs, meaning you'll never have the opportunity to support them through it.

This also means modeling the behaviors you want to see in others and not being afraid to show up with vulnerability in order to demonstrate to your team that they're free to do the same. This doesn't mean dumping all of your troubles on your team, but not feeling like you always have to plaster on a happy face when you're going through something tough.

 
Create space for connection

Of course, your employees aren't just going to start suddenly opening up to you about their troubles, particularly if you haven't had a culture of radically human leadership before.

Instead, start by connecting with your employees in smaller ways — asking about their weekends, their families, their hobbies. Over time, this will make them feel comfortable sharing some of the harder things going on in their life.

In today's virtual workplace, that also means being very purposeful about creating space for connection.

"If anything, I've increased the amount of time I've spent just talking to my employees," Burnison said. "When I do a Zoom call, never start out with the topic at hand — I'll try to make a connection with the people on the call first, because it would have happened if we were in person."

 
Show up even if you don't have the answers

As a leader, there will be many situations where there's no solution, no way to fix what's going on.

The trick is to be humble enough to recognize that and still go out of your way to reach out to your employees and make sure they know you're there for them.

Burnison experienced this firsthand this year as he's had employees who've had to quarantine for two weeks after fear of COVID-19 exposure, suddenly lost spouses, and expressed suicidal thoughts to him.

"There's no magic formula to what you say in those situations — there's not a game plan or a tactical approach that you can take," he said. "But if people can feel that they are being seen, that they're being heard, that somebody else cares for them — that's 90% of it."

Why Closing The Wage Gap On Latina Equal Pay Day Is A Win For Us All

Source: https://tinyurl.com/y4gcykqp
Written by: Holly Corbett

ContributorDiversity & Inclusion.

Today is Latina Equal Pay Day, which marks how far into the year the average Latina must work to make what the average white, non-Hispanic man made the previous year. It’s 2020 and Latinas still make just 55 cents on the dollar compared to white men, and the gap widens for Latinas with higher education levels, according to LeanIn.org. That translates to more than $1 million in lost paychecks of the course of her career.

Here are some reasons why this wage gap exists, how it harms families and the economy—and ideas for closing the gap for good.

Latina women may have been taught to stay quiet. There are many factors that contribute to the wage gap, including gender and racial bias. There are also cultural nuances that may prevent Latinas from speaking up. “There is a saying in Spanish, ‘Calladita te ves mas bonita,’ which translates to, ‘If you’re quiet, you look prettier,’” says Yai Vargas, founder of The Latinista, a national network for Latinas and women of color.

The notion that women and girls should stay quiet may have some historical roots. “In this country, people rarely talk about the history of people who are not Black or white. We don’t talk about where Latinos come from, or where Asians come from,” says Nely Galan, media executive, entrepreneur, and author of Self Made. “You often see in the news [Latinos] come here for economic reasons, but so many of us come here as political refugees. If you’re a woman in Latin America and you’re seen as radical because you speak up, you could disappear. When we come here, we’re told to be quiet by our parents, and just be grateful we’re here and for all this country has to offer.”


There are real barriers to advancement. For every 100 men who are promoted to manager, only 68 Latinas are promoted, according to LeanIn.org. This keeps many Latinas stuck in entry-level positions.

“I think the wage gap exists in part because Latinas are not being given the same opportunities to apply for the same jobs, are not receiving the same training and are not being promoted at the same rate,” says Mónica Ramírez, founder and president of Justice for Migrant Women. “Also, Latina workers, we over-index in some of the lowest paid jobs, such as domestic work, the service industry, and agriculture. Yet no matter the job, Latinas are being underpaid across the board, regardless of position, industry or education level. We have a cultural problem in this country where employers are not valuing Latinas equally for our contributions.”

The myth that hard work always pays off.
Keeping your head down and getting the work done doesn’t automatically translate to a promotion. “We are taught if we work hard, we will get recognized,” says Vargas. “But it doesn’t work that way in corporate America; it rewards people who speak up and demand. While it is not on Latinas to solve the wage gap, if you can not articulate why you should get paid more, the value you bring to the role, or the projects you’ve accomplished this year, you’re dead in the water. It’s important to research competitive salaries, do a self-assessment of your qualifications and find ways to tie your role to the company’s bottom line.”

The impact of covering in the workplace. Latinas may not feel they can be their authentic selves in the office, and the energy spent downplaying their differences from the accepted status quo may interfere with their ability to shine. “There are a lot of Latinas who come to this country and feel their ability to speak another language actually hurts their mobility,” says Vargas. “They spend so much time and energy going to accent-reduction classes to speak in white spaces. They try to fit into a culture rather than add to a culture. They should be able to use this as their super power rather than assimilate.”

We must stand united. There is strength in numbers, and in finding your voice. “So many of my African American friends say to me, ‘Why are [Latinas] so quiet? Why don’t you speak up?’” says Galan. “People may not realize the trauma we may have when we come to this country. We have to have this understanding between all multicultural women, because apart we are nothing, together we are everything. We are the number one emerging market in the world. Without us, there is no economy. That is a great power. Unless we understand each other’s pain, we won’t move forward. This is a country built on voices, and we must help each other find our voice.”

There is a need for cultural onboarding. Minority women are leaving the workplace to start their own businesses, in part because they don’t feel like they can be successful or like they fully belong in corporate America. In fact, women of color accounted for 50% of all women-owned businesses in 2019, according to AMEX’s State of Women-Owned Business Report.

“The truth is that African American and Latina women are leaving corporate America and starting businesses, because they don’t feel safe in that environment,” says Galan. “Corporate America says they want diversity, and bring [diverse candidates] in, but they often don’t stay. We throw these Latina and Black women in these companies and they get inadvertent comments about how they don’t fit in. I’ve had bosses say to me, “Your lipstick is too bright, you’re too much, you’re too passionate. I was a goody two shoes who did everything right, but I’m an example of someone who left corporate America because I was uncomfortable.”

Part of the issue may lie in the inability to successfully onboard employees from different backgrounds and cultures. “There are examples of success. Corporate America could learn a lot from the military, because the thing they are doing right is how they onboard diverse people,” says Galan. “The military is far from perfect, and has had issues with things such as sexual harassment and LGBTQ+ issues among other things, but you do see a lot of minorities rise through the ranks and succeed in this environment. Why? They’re able to onboard people from different cultures to align with a bigger mission; everyone has to learn the basics and the values of the culture, and you can decide how far you want to rise through that meritocracy.”

The wage gap may widen in the Covid-19 economy. Roughly 324,000 Latina workers exited the workforce in September 2020—nearly three times the rate of white women and more than four times the rate of Black women, according to the New York Times. The financial price paid for the average woman who opts out and tries to re-enter the workforce is an 18% decrease in their earning power on average—and a 37% decrease when they’re out for three years or more. This will have a lasting impact on families and the U.S. economy.

“During the pandemic, we’re seeing that people of color have been among the hardest hit, and it shouldn’t be shocking to anyone,” says Ramirez. “Many BIPOC community members do not have the safeguards, financial or otherwise, to keep us safe during a crisis like this one. For Latina workers, if you don’t have childcare when schools go virtual or paid leave that allows you to take time off to care for kids or sick family members, then people are forced to leave the workforce. When people feel fairly compensated and valued, they do better work because they feel valued. When you close the pay gap for Latinas, it will result in a benefit overall for the company—employees will give that back and invest that positive energy into the workplace.”

It’s not about assimilating; it’s about fusion. Whites will be the minority by 2045, with Hispanics making up the largest ‘minority’ group after whites, according to Brookings. Companies need to evolve to these shifting demographics now in order to survive and thrive.

“Can we just assimilate into the culture? No, because the culture is becoming and will be majority Black and Brown, with Latinas at the top numerically,” says Galan. “America is the only country where it’s grown so exponentially that minorities are becoming the majority. This moment in our country, we are not getting along. I think that, while we must fight for social justice, it is difficult to change people’s beliefs or dictate that they not be racist. But we have to aspire to be a country that is not so divided, and that respects different points of view. However, even with all our problems, there is nowhere else in the world where you can speak up or have such an opportunity to use your voice.”