Numerous studies have shown the disproportionately negative impact of recessions on the minority workforce – this includes at the executive level. In the 2008 Great Recession many of the professional gains that executives of color had made in the preceding economic expansion were erased. For example at top law firms, attorneys of color were more likely to be laid off than majority attorneys; in the public sector, black civil servants also carried the brunt of the layoffs compared to their white counterparts, the effects of which were felt long after the Recession had ended. Recent studies have shown that, already in 2020, the unemployment rates for women and people of color have risen faster than that of men, echoing the same trends seen in the 2008 recession.
To avoid history repeating itself, enterprise-wide diversity, equity, and inclusion (“DEI”) must be intrinsically tied to business objectives. Organizations must move away from “initiatives” and programmatic DEI efforts, towards sustainably investing in human capital with a long-term outlook. Corporations should become more conscious of how they are evaluating and retaining talent across demographics during a downturn, continuing to build talent pipeline and mentorship programs, despite the pressures of the COVID-19 crisis.
A true commitment to diversity, equity, and inclusion is a core strength of top corporations and can help organizations weather difficult economic times. Data shows time and again that the highest performing companies are those with diverse boards and executive teams.
An organization’s leaders are fundamental to retaining diverse executives. Not only are companies with diverse executives more likely to have financial returns above their respective national industry medians, but evidence shows that these companies also tend to fare better during recessions than those without the same levels of meaningful DEI. By learning from the past, leaders can make sure the diversity of their organizations does not suffer at the hands of COVID-19, and therefore maintain (and even increase) the many benefits a diverse and inclusive culture brings to a company.
