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Preparing to Sustain DEI during Economic Downturns

According to The Economist, a global recession is “inevitable” in 2023. [1]


During times of economic downturn, not only are DEI budgets likely to be cut, but research shows that underrepresented groups are historically the first to be let go and the last to be rehired. [2] Permanent employees are being replaced with part-time and contract workers, who may not enjoy the same access to health care and other benefits, risking a two-tier system that no longer nurtures underrepresented high potential talent. There is a very real danger that the progress made over the past 30 years in diversifying talent pipelines and building inclusive organizational cultures will be lost.


With budget cuts and layoffs looming, what should DEI practitioners and allies be doing to protect precious gains made over the past few decades? How do we keep DEI front and center in the face of competing priorities?


1. Make DEI Indispensable to the Business

The more our DEI strategies are aligned with the business and mission, the more central DEI will be to business growth and brand. DEI practitioners need to stay attuned to organizational priorities and find opportunities to communicate DEI’s relevance. One way to do this is to track and quantify DEI’s contributions to the business. For example, as Sodexo built a global reputation as an inclusive organization, the clients took notice. They started asking for our assistance with their DEI efforts. Sodexo’s White male managers saw DEI as a way to access clients’ senior leadership. They saw it as a competitive advantage and a way to build client relationships. DEI became a driver for business growth. My team touched over $1 Billion worth of business each year through DEI by providing access, sales presentations and more. DEI can be the very thing that pulls businesses out of an economic slump. It can be a differentiator, making the business more attractive to clients, consumers and talent. Attracting the best talent can be challenging, particularly given the global talent shortage. Organizations now more than ever need to develop creative strategies to tap into underutilized talent pools to attract the best qualified employees. Deutsche Post DHL, the world’s leading logistics company, embedded DEI within their recruitment strategy to develop a refugee hiring program that reached over 12,000 refugees. Not only did this strategy address a talent gap, it saved costs by tapping into a stable workforce as refugees have higher retention rates. Other business benefits included increased employee engagement and pride in the company as well as amplifying the DHL brand as a company with the purpose of “Connecting People, Improving Lives.” Through its refugee hiring, diversity addressed a talent challenge for the business. How can you make DEI part of your organization’s core business strategy and indispensable to your organization? Ask yourself questions like :

  • What does the organization care about and stand for particularly during times of economic challenges

  • How can DEI enhance the mission of the organization or business outcomes?

  • How can we communicate the alignment between DEI and the business effectively?

  • How can we partner with business leaders to understand and meet their needs at this time?

2. Focus In and Let Go

Budget cuts make it essential to cut back on what we are doing. So how can we make the most strategic decisions about what to drop and what to focus in on? What are the biggest barriers that need addressing? Where can we have the greatest impact? What are we solving for? How can we demonstrate impact? This information is key to identifying the most salient pressure points and resisting the temptation to spread ourselves too thin. For example, if you have been looking at advancement of women in general, what happens when you disaggregate your data by job function? Are the main challenges in P&L and operations roles? If so, focus here and identify and address the barriers to their progression. The more focused, specific, intentional and informed our DEI strategies are, the more effective they can be and the easier to demonstrate their impact. And when others see impact, they are faster to come on board and provide resources to support us. To ascertain just how focused your DEI strategies are, you can ask yourself the following question:

  • Can we distill each of our DEI initiatives to a single sentence with the resulting impact?

3. Nurture Your Team

Budget cuts can mean a reduction in bonuses, incentives and too few staff to do the work. Ensure that your team continues to access learning opportunities and get them involved in projects that will stretch and grow them. Pay attention to their work life balance and calibrate their workload with realistic expectations. Ask them how they would like to be recognized and find ways to make that happen.


Conclusion

An economic downturn is stressful. It is a time of uncertainty and disruption. Competition among groups and resentments can fester. But it can also be an opportunity to strengthen our work, to trim away what is less effective, and to further embed DEI in the core mission, systems and processes of an organization for lasting change.


Click here for additional strategies and the full article in the Profiles in Diversity Journal.


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[2] Rice, David “Workplace Fairness Trends to Watch in 2023” – DiversityInc Best Practices

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