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Fearing a recession? Don’t drop the ball on your DEI efforts now

Despite tumultuous times and the prospect of shrinking profits, your aims for diversity shouldn’t take a back seat.

Fearing a recession? Don’t drop the ball on your DEI efforts now
[Source Images: Getty]

All signs are pointing to the U.S. closing in on a recession. Companies including Coinbase, Netflix, and Tesla are trimming their workforce as the downturn continues. Meta and Salesforce have announced hiring freezes. And in the continued battle over how and where we should work, some companies are discovering that a fully remote workforce can cut down operational costs by a third.

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However, when leaders are confronted with a downturn, they can make the critical mistake of focusing only on the bottom line. While it’s important to prioritize resources against the company’s strategy, now is not the time to cut diversity, equity, and inclusion (DEI) efforts. Your company’s DEI efforts must remain a top priority.

Leaders, here are three important reasons not to cut your current efforts and to continue investing:

A continued focus on talent

Sequoia Capital’s recent presentation shares that while companies are laying off and instituting hiring freezes, those who are in a position to grow will be on the search for talent. And the battle for talent will wage on. According to a study from the accounting firm Deloitte, organizations with inclusive cultures have higher retention rates and greater productivity rates. They are able to focus on retaining and developing talent, instead of constantly trying to backfill a revolving door of resignations.

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Now is the time to ensure that your leaders are being upskilled to lead a diverse workforce inclusively.

As Catalyst reports, leaders who consistently showcase characteristics like humility, courage, curiosity, accountability, and ownership are more likely to create a team environment where employees feel they can take risks, are trusted, and, most important, are valued. Those with inclusive cultures who value and appreciate their talent will win the long-term war on hiring and retention. These organizations will be set up for success long after the recession ends.

A chase for growth

Remember that DEI is a driver of the business. According to Nielsen, the multicultural consumer has the spending power of $3.2 trillion. The LGBTQ community has the spending power of $1.4 trillion. And the spending power of individuals with disabilities is $500 billion.

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If you are struggling to find growth in this downturn, ask yourself who you are choosing not to sell your products and services to. Who are you excluding and why? And are you actually serving historically marginalized communities with authenticity and purpose?

When it comes to ensuring your products and services are inclusive, ensure your DEI team has a seat at the table from the very start. Ensure you have both the diversity of representation at the table and expertise on how you plan to serve a particular community.

Recent DEI marketplace failures including Walmart’s “Juneteenth” ice cream, Barbie’s lack of Asian representation, and Burger King’s “Pride Whopper” campaign, among others, show the importance of diversity of representation throughout the entire ecosystem, including suppliers and vendors. Finally, just because you give someone a seat at the table doesn’t mean their voice is heard. Ensure that your DEI team and others can express their differing viewpoints, share their expertise, and feel recognized for their contributions.

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A need to address larger societal issues

Since the murder of George Floyd, companies have been under intense pressure to showcase their commitments to end racial inequities. According to the Edelman Trust Barometer report, 86% of consumers expect brands to take one or more actions beyond their product and business, including addressing societal challenges.

With the recent racist mass shooting in Buffalo; the Uvalde, Texas, school massacre; and the overturning of Roe v. Wade, companies are increasingly under pressure to speak up in the moment. You must have the DEI expertise on your team to coach leaders on what to say and what to do externally—and to equip your leaders with the ability to facilitate these conversations internally on their own.

Not all companies will cut their DEI teams, budgets, or efforts. Many of your competitors will stay the course, looking to make short-term and long-term impact. They will understand the value of unlocking the power of DEI to stand out to employees, customers, and shareholders. Don’t be the company that’s left behind.

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Mita Mallick is a diversity and inclusion leader. Currently, she is the head of inclusion, equity, and impact at Carta.

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