Many companies may be considering scaling back their DEI budgets during this economic downturn, but this can ultimately hurt an organization’s ability to thrive. The reality is that great companies and companies with long-term profitability are born out of recessions.
From what some economists are predicting, the pending recession may last from six months to a year. Which is not long in the life of a established business. Now is the time to get ahead by prioritizing DEI. Doing so has the potential to build your brand reputation, long-term talent pools and customer base all of which sets companies up to increase their revenue.
The U.S. population is growing more diverse. According to census data, there will be no racial or ethnic majority by 2045. The most successful organizations will have a workforce that reflects the diversity of the customers they serve and will be more equipped to understand what their customers want, feel and need. With more input and representation, a diverse leadership team can also be better poised to avoid marketing mistakes that can negatively impact the brand.
Inclusive workplaces make your business more resilient.
Research shows diverse and inclusive workplaces help boost innovation, attract diverse talent, increase employee retention and ultimately lead to higher revenue growth. Companies that keep their foot on the gas pedal in terms of their DEI initiatives may be better prepared during a recession to not only survive but thrive.
One recent survey found that during the Great Recession of 2007 to 2009, companies with inclusive workplaces, as rated by historically disadvantaged groups, outperformed companies where employees lacked inclusivity by nearly four times. When morale is lowered such as by mass layoffs or economic uncertainty DEI efforts can make leaders, teams and employees better equipped to address these issues.
It is critical that leadership communicate the importance of DEI. Your leadership team should be aware of the business case for DEI, as well as understand that it is the right thing to do.
Look to tie DEI goals into performance reviews for leadership teams and managers to create greater accountability.
Consistent DEI efforts build a positive brand reputation.
DEI can be a key driver of a company’s reputation. Pushing your DEI efforts down on your list of business priorities during an economic downturn can harmful to you brands reputation and company morale.
According to a Deloitte Insights poll, 57% of consumers are more devoted to brands that promise to address social inequities such as by prioritizing diverse suppliers and focusing on hiring and retaining diverse talent.
There is still a shortage of workers.
While companies like Twitter, Amazon and CNN are laying off workers, the truth is that a talent shortage remains. According to some estimates, we’re short about four million workers.
In order to attract and retain talent now and in the future, DEI must remain at the forefront of your recruiting process, your onboarding process and your culture. When a company is known for having a diverse and inclusive workforce, they become a preferred employer, with 76% of candidates saying they prefer to join diverse teams
Sidelining DEI can alienate your customer base.
Understanding where DEI and economic benefits overlap can help build the case to make DEI a priority for senior executives during budget cuts. Another strategy for funding DEI initiatives on a slim budget during economic downturns might be interdepartmental collaboration.
DEI is not a trend, and it’s not going away. If companies want to thrive and use the economic downturn as an opportunity to innovate, DEI must remain at the top of their priority list. While we can’t put a price tag on inclusion, I have seen how it can pay back in dividends.