History has shown that our nation’s most vulnerable workers tend to be hit hardest during economic downturns.
During the height of the pandemic, women and people of color saw the highest unemployment rates. While many have returned to the workforce, these specific groups are likely to face challenges as companies tighten their belts in anticipation of a recession.
Now there are reports that 50% of employers are predicting layoffs. This summer, inflation hit 9.1%. The future is uncertain for workers, partly because economic data in the U.S. is sending mixed messages.
Corporate efforts to prioritize diversity, equity, and inclusion, or DEI are in danger of falling on the back burner.
At the same time, demand for disclosure on DEI metrics is on the rise, with new demographic reporting requirements on the docket from the Securities and Exchange Commission and growing expectations from shareholders that portfolio companies provide non-financial disclosures to inform investment decisions.
At Novata, we work hands-on with companies – especially those without dedicated DEI and ESG teams – to build reporting practices on issues from gender pay gaps to workforce demographics. This data unlocks a company’s ability to see how they’re performing on key DEI issues such as gender pay gaps and workforce diversity.
To prioritize DEI in a challenging economic environment, there are several key steps leaders must take. The first step is fostering a work environment where diverse staff will feel valued and celebrated. Employers should institute required antiracist training, workshops, and additional training for managers.
Once in the door, it is crucial that employees are working in an environment that fosters trust, provides resources for career development, and clear paths for advancement. Employers should help talent establish quantifiable and achievable KPIs and targets, ensuring that measures of advancement are defined and agreed upon, so that managers can provide regular feedback.
Corporate leaders should conduct regular pay equity analyses and audits to track whether employees at all levels are being paid equitably. Disclosure on pay discrepancies is especially important to holding leadership accountable and reporting on the progress helps to close pay gaps.
With additional layoffs predicted in the coming months, will women and people of color again be disproportionately impacted?
To ensure follow through on DEI efforts, it’s important to hold C-suite
According to the most recent Edelman Trust Barometer, business is now the only institution Americans trust when it comes to the key social issues of our time. To maintain this trust, it is increasingly important to demonstrate a commitment to equity as part of a company’s long-term strategy. It represents a critical part of the plan to maintain a company’s social license to operate.
Amidst the current economic uncertainty, it is doubly important that corporate leaders hold fast to DEI commitments and continue to direct resources to support employees who are likely to be the most vulnerable in the coming months and years.
The journey toward a more equitable workplace is long and will reveal inequities in the process of tracking workforce metrics and reporting progress. Continuing this pursuit through both the best and most challenging of times can create a more equitable workplace and ensure the long-term resilience of our economy.