The Importance of DEI Amid Geopolitical Uncertainties

War, inflation, cost of living crises, elections, workforce transformations and uncertainty around the global economy have led to organizations being keenly focused on their bottom lines due to fears of what’s around the corner. As a result, organizational DEI efforts, which were propelled in part by the Black Lives Matter and #MeToo movements, have both seen a drop in focus and funds.

A Revelio Labs' collaboration with The Washington Post and Reuters found that the “wave of layoffs in Big Tech has hit DEI workforce planning efforts in the industry that disproportionately impacted DEI roles compared to other roles and, at the same time, many major companies also saw steep declines in the diversity of their new hires.”

Furthermore, layoffs often follow a pattern of “last in, first out”. As a result, the layoffs in the past year have often resulted in the firings of employees originally brought into an organization through its recent DEI recruitment efforts. Several subject matter experts and data seem to indicate these moves will hurt business.

Decreasing DEI budgets can have negative long-term impacts on a company’s long-term profitability. In 2019, The Wall Street Journal’s first corporate ranking that examined diversity and inclusion among S&P 500 companies found that DEI efforts have been linked to innovation, attracting talent, employee retention and revenue growth. Moreover, a diverse workforce also better reflects a company’s clients’ diverse set of perspectives around service offerings, resulting in better and more robust organizational decision making.

A survey by Great Place to Work uncovered that, during the Great Recession of 2007 to 2009, organizations with workforces that were inclusive outperformed companies that did not have a significant percentage of employees from historically disadvantaged groups – by almost four times. In addition, a study by the Institute for Public Relations found that diversity and inclusion initiatives improved both the reputation and revenue of a company, and a Deloitte Insights poll found that “57% of consumers are more devoted to brands that promise to address social inequities such as prioritizing diverse suppliers and focusing on hiring and retaining diverse talent.”

Understanding the best companies need the best people, Glassdoor’s Diversity and Inclusion Workplace Survey found “76% of job seekers and employees report that a diverse workforce is an important factor when evaluating companies and job offers”. Diverse companies tend to have strong internal cultures and senses of belonging that leads to less talent gaps and less likelihood of alienating future hires who may be apprehensive of the implications of a perceived lack of organizational diversity.

Although keeping expenses at bay is important, there are cost effective ways to ramp up diverse recruiting – some of which Cresa already has implemented.

Using avenues such as the Employee Spotlight to highlight executives and decision makers from diverse backgrounds is an excellent recruitment tool. Making DEI simply a part of a company’s business procedures across the organization, as opposed to a separate line item, integrates DEI into general business practices. This includes continuing to track DEI metrics. After all, in the long run, “superficial pronouncements” and “lofty ideals” won’t ultimately move the needle – but substantive action will have real impact on diversity, revenue and growth.

SOURCES: HARVARD BUSINESS REVIEW, FORBES BUSINESS COUNCIL, THE GLOBE AND MAIL