It's Critical to Continue to Prioritize DEI During a Downturn. Here's Why.
As if the last few years weren’t hard enough for our businesses, the future is looking grim as organizations brace themselves for the impact of an economic downturn. In fact, according to model projections from Bloomberg Economics, a recession within the next year is not arguable speculation, but an absolute certainty.
And, of course, organizations have seen the writing on the wall and are acting accordingly. Back in August, PricewaterhouseCoopers released a survey of U.S. executives that revealed 50 percent planned on reducing their companies’ headcounts, 44 percent were rescinding offers, and 46 percent were no longer offering signing bonuses to new hires. In a follow-up survey conducted in October, 81 percent of chief human resources officers said their companies are using several strategies to cull their workforces, such as layoffs, hiring freezes, not replacing employees who leave, making performance-based cuts, and encouraging voluntary retirement.
When you’re trying to find ways to cut company costs during an economic downturn, you may be wondering whether or not you should maintain your DEIB efforts. After all, if you’re already in the midst of layoffs and hiring freezes, is it really necessary to continue executing your diversity recruitment plan? Is it really worth the time, energy, and most importantly, money?
The answer to that question is absolutely.
Although companies are tightening their belts, an economic downturn is not a good enough reason to suspend your DEIB work. In fact, it’s more important than ever to continue making strides with diversity, equity, and inclusion. Here are some key reasons why.
1. Attracting Quality Talent
No matter what the economic landscape looks like, you want to find the best talent you can get—and retain the great talent you already have. Although you may slow down hiring, it's important to keep your diversity goals in mind when recruiting so you don't neglect your DEIB work. Don't forget that today's talent desires to work in diverse environments—and that's not likely to change anytime soon. This means that if you haven’t frozen hiring, diversity and inclusion will impact how candidates view your employer brand. For example, according to a study by Glassdoor, 76 percent of candidates factor in the diversity of an organization’s workforce to help them make a decision, which isn’t surprising considering how the workplace has become increasingly more diverse with each generation that enters it.
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2. Creating Financial Growth
Any organization concerned about the cost of D&I work during an economic downturn should keep in mind that having a diverse workplace can actually help boost its bottom line. The business case to continue your DEIB initiatives can be found in the data:
- A study by PricewaterhouseCoopers found that 85 percent of CEOs say their revenues increased after implementing diversity and inclusion strategies.
- Harvard Business Review found that companies with a higher-than-average level of diversity enjoy 19 percent higher innovation revenues than their less diverse counterparts.
- Research from Forbes revealed that 56 percent of companies that make over $10 billion in annual revenue strongly believe diversity in their organizations has driven innovation.
- The Boston Consulting Group found that organizations with highly-diverse management teams earn 19 percent higher revenues than companies with less managerial diversity.
- Diverse companies capture new markets 70 percent more than companies that aren’t diverse, according to Harvard Business Review.
3. Supporting Underserved Communities
The whole point of your DEIB work is to support and hire talent from underserved backgrounds. As a result, it’s important to keep that good DEI work going even during an economic downturn because during times of recession, people from underrepresented communities are impacted the most. For example, the Center for American Progress reports that during The Great Recession, unemployment rates for black and brown people were significantly higher than their white counterparts, with 11.5 percent of black people and 8.9 percent of Hispanics unemployed compared to 6.3 percent of whites. With this in mind, you should keep diversity, equity, and inclusion top of mind when hiring during a challenging economy because it will help your organization maintain its commitment to providing opportunities for talent from diverse communities.
Your company may be making plans to weather the upcoming economic storm, but you shouldn’t throw your DEIB work overboard in the process. During a financial downturn, your company should still remember the numerous benefits of DEI and why you wanted to adopt it in the first place. Whether you’ve invested a great deal of time into this work, or you’re early in your D&I journey, you don’t want the effort you put in to be for naught and lose the gains you may have made along the way. There’s no doubt that D&I work is good for recruitment, employer brand, and of course, the bottom line, no matter what the economic environment may look like.
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