How to Preserve D&I Progress During Economic Downturns

The public health crisis has resulted in unprecedented job loss since March, and organisations need to careful that their diversity and inclusion (D&I) progress doesn’t falter.

More than 700,000 US jobs were eliminated in the first wave of pandemic layoffs in March, according to the US Labor Department, and nearly 60% of those jobs were held by women. Further, job losses to date because of the COVID-19 pandemic has had an out-sized impact on Latinix and Black workers, according to a survey conducted by the University of Southern California.

While the current job losses for women and minority workers have been focused on lower paying service jobs, there is a risk that companies employing white collar workers could face a similar plight. To avoid this, organisations should initiate discussions with their employees about reductions in the workforce along with a commitment to safeguard organisations’ progress on D&I.

How history repeats itself

Individuals from underrepresented groups are disproportionately impacted by lay-offs, and the evidence to prove it goes back decades. Researchers found “that whites are less likely to be laid off than nonwhites and that, among nonwhites, Asians are less likely to be laid off than blacks or Hispanics,” according to a study of data from a financial firm with more than 8,000 employees that was published in Industrial Relations: A Journal of Economy and Society in 2002.

From these studies and plenty of other evidence (such as this) gathered during the Great Recession that began in 2008, it is easy to conclude that institutional bias is at play.

And the best time to minimise bias during workforce reductions is before the organisation is forced to enter into these conversations. Indeed, Chandra Childers, study director at the Institute for Women’s Policy Research, stated that a “work culture that truly values diversity and inclusion thinks about these issues before they even arise.”

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There are minimum standards recommended to ensure fairness and equity are top of mind when lay-off decisions are necessary — and these could even help protect against any future litigation. These standards include:

  • Establish diverse decision-making teams — This is a table stakes requirement when applying diversity concepts. The Society for Human Resource Management recommends that organisations should “create a diverse team to make layoff selections,” as one of its seven “effective lay-off practices.”
  • Develop a consistent approach — To make sure that fairness is front and center in workforce reduction decisions, organisations should apply a logical framework across the board using business-related criteria, such as length of service or seniority, a specific department or office location, elimination of specific job functions or levels, and pre-existing job appraisal data, and documentation related to successful performance of critical post-reduction functions, according to emtrain, a consultancy that provides compliance training.
  • Assign someone on the management teams to partner with HR — The collaboration between Human Resources and the assigned leader will help ensure that the breakdown of those workforce reductions is equitable and the impact on underrepresented groups is not overwhelming. If the “lay-off list” has a disproportional impact on minority talent, then management teams need to conduct another round of evaluation to eliminate this potential bias.

However, these actions may not be enough. Even with formal monitoring by in-house legal and compliance to promote consistent application of standards to enforce equality during the work reduction discussions, Alexandra Kalev in her research published by the American Sociological Review found that the opposite is true.

Therefore, more efforts are necessary, and here are three actions to take:

1. Build in bias disruption mechanisms during decision-making discussions

One way to interrupt bias during live conversations is to ask the questions below as recommended by Michelle Silverthorn, CEO of Inclusion Nation and well-known expert in Diversity, Equity and Inclusion. Going one step further, the decision-making team could analyse these questions for each worker no matter what their diversity status:

  • Who had access to high-quality work?
  • Who had growth-oriented evaluations, and who did not?
  • Who had a champion speaking up on their behalf, and who did not?
  • Who got to go to happy hours, golf games, customer events, and to speak on stages, do pitches, and to inherit clients and customers, and who did not?

Another tool to disrupt bias is to assign a trained person, such as person who is formally trained in unconscious bias or a member of the diversity and inclusion team, to sit in on these conversations and signal when bias is creeping into the discussion.

2. Involve a senior leader with an understanding of the social and network impact of lay-offs

More specifically, Salila Yohn, a D&I expert who has navigated prior downturns, states: “It is critical that someone who is accountable for diversity and inclusion progress communicates to the decision-making team about how proposed reductions in the workforce will impact overall company culture and minority talent networks, such as Employee Resource Groups, that thrive within that culture.”

3. Communicate the impact on the leadership pipeline and client relationships to senior executives

Organisations should assign senior leaders with responsibility for D&I to execute this action, given their holistic understanding on the impact of workforce reductions. Indeed, the most successful companies will emerge with strong D&I results because they kept these values at the forefront while making tough decisions, Yohn says.

Hopefully, companies never get to the point where actions around lay-offs are required. However, if they find themselves facing these decisions, it is important to ensure that investments in D&I are not lost during the downturn, and this progress can be preserved with the actions in this article.

In fact, Kori S. Carew, Esq., chief D&I officer at Seyfarth Shaw, advises organisations to double down on diversity and inclusion. “This is not the time for us to allow diversity budgets to be cut or to scale back on programs or to scale back our commitments,” Carew says, adding that it’s the opposite. “If you have a mentoring program for your diverse attorneys, double down. If you have a sponsorship program for your diverse attorneys, double down.”

The author of this article is Natalie Runyon, Director & Head of the Talent Platform at Thomson Reuters Legal Executive Institute. Natalie’s article was originally published by Legal Executive Institute, the Thomson Reuters thought leadership forum.

The Thomson Reuters Legal Executive Institute brings together people from across the legal industry to ignite conversation and debate, make sense of the latest events and trends, and provide guidance as you confront the opportunities and challenges that these changes present.

The site features blog commentary, legal news analysis, interviews with industry leaders, videos and podcasts offering keen insight into the profession of law and the legal marketplace from members of law firms, corporate legal departments, government and academia.

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