The economy is facing major headwinds. The majority of CEOs expect a recession in 2023, and
50 percent of companies are planning some level of staff reduction. Major employers, as
diverse as Walmart, Ford, Tesla, Amazon, and Re/Max, have announced massive layoffs. With
the dual threats of economic weakness and high inflation, how should we as leaders balance
short-term headwinds with long-term diversity, equity, and inclusion goals? Past economic
cycles reveal that DEI efforts are first on the chopping block. Is now the time to pull back?
On the contrary, companies should remain committed to diversity and inclusion, especially
during recessions. New research [1] reveals that companies with authentic DEI programs
increasingly outperform during both downturns and upswings, while companies lacking
diversity are increasingly disadvantaged.
Diverse and inclusive companies outperform in numerous ways. Recent academic studies show
that diverse work groups have better anticipation, coping, and adaption skills and are more
resilient during downturns. [2] They have more strategic agility and better problem-solving skills
to navigate economic uncertainty. Diverse teams are more innovative, spot opportunities
faster, and are 45 percent more likely to gain market share and 70 percent more likely to
capture new markets. [3]
New research [4] on 1,600 companies reveals that companies with inclusive cultures
outperformed the S&P 500 significantly during the Great Recession (+14% versus -35%). These
companies also enjoyed 4x the performance of the S&P from the period of 2006-2019.
With 10.5 million job openings in the U.S., the war for talent rages on—with two jobs for every
jobseeker in Colorado. The best-performing companies acquire assets during recessions, while
others shed them. [5] Top talent is no exception. Three out of four jobseekers and employees
prize diversity in the workforce, and diverse companies will continue to win the talent war. [6]
Preserving DEI efforts helps companies maintain morale and avoid the reputational harm of
backtracking on equity.
There are myriad reasons to lean into DEI, but the most compelling is that it’s the right thing to
do. Time and again, downturns have most severely impacted women and people of color. CIE
was launched in 2020 amidst the chaos of the pandemic and the moral awakening sparked by
the murder of George Floyd. Colorado’s economy ranks 12th in the nation for overall prosperity
but 37th for racial inclusivity. Combatting inequity and creating opportunity for all is not just
smart business, I believe it’s the moral imperative of our day. In the words of Martin Luther
King, Jr., “The time is right to do what is right.”
Now is the time to recommit to authentic diversity, equity and inclusion. Let’s keep our eyes on
the prize.
Helen Young Hayes
[1] https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-still-matters
[2] https://link.springer.com/content/pdf/10.1007/s40685-019-0084-8.pdf?pdf=button
[3] https://hbr.org/2013/12/how-diversity-can-drive-innovation
[4] https://pubfiles.greatplacetowork.com/root/tl/hidden-pieces-of-the-d-i-puzzle.pdf?utm_source=Marketo&utm_medium=EM&utm_campaign=4All-Report-Post-Download&utm_content=CTA&utm_term=Touch1&mkt_tok=NTIwLUFPTy05ODIAAAGIgi5kS6X0Ey0gKreqoZjiSWvixQTL8hnjkw0oDkw_j2CoG8gZ650eDTR3XVuk5NnkKA968C4RG1loedKGkEnu0YLwwX54rdGybGqv6OzmCz4
[5] https://hbr.org/2022/06/how-companies-should-invest-in-a-downturn
[6] https://www.washingtonpost.com/business/2021/02/18/millennial-genz-workplace-diversity-equity-inclusion/