COVID-19 Blog 4: Will corporate diversity initiatives go down the tubes during and after the pandemic?

Are your diversity initiatives going downhill during these trying times?

I really do have a fear that the diversity, equity and inclusion (DEI) efforts across many organizations will be set back several years during this time of the Coronavirus pandemic. If DEI is truly a strategic initiative for organizations to thrive and grow into the future, why should things stop now?

In January, before all this COVID-19 stuff really started, I wrote a two part blog series:
Part 1 (Link): Huge Gaps in Diversity in Business Leadership – A Systemic Issue Needing a Systemic Approach
Part 2 (Link): Five Tactics to Address the System Issue of the Lack of Diverse Business Leaders

In Part 2, the 4th tactic I shared was “never letting up”. I shared that often executives see a little progress (“we now have an African-American in the c-Suite, women in management has gone up from 18% to 20%”) and then the budget gets cut and work stops. Then things will take their natural course and revert back to the old pattern. Dr. Vida Robertson, professor at the University of Houston, often states “you cannot take the foot of the gas or the vehicle will stop.” In this case, since it is an uphill battle, the car will go backwards once you take your foot off the gas!

Over the past 3 months, I have seen every in-person diversity training initiative I had scheduled between March and June cancelled, with little or no effort to reschedule or consider going web-based. In fact, even one 4-week webinar training series was cancelled since the organizers felt people would have too many other things to worry about instead of diversity.

My largest fear is that when we slowly reopen the country, that many corporate budgets will be slashed to try to turn out a decent annual profit statement, and diversity efforts will be one of the first items severely cut.

And then the ramifications could end up being:
• The predominately white male senior leadership will retain more of the leaders like themselves, impacting employment and promotion opportunities for under-represented minorities. And it wouldn’t be deliberate or mean-spirited, but simply unconscious bias taking its natural course.
• Diversity recruiting efforts may be cut resulting in less hires of qualified diverse candidates.
• Respectful workplace training would be cut, and some employees may revert back to old habits of forming non-diverse teams and making their diverse co-workers feel unwelcomed.
• Some companies may experience additional revenue drop as they fail to effectively sell and market to diverse customers.
• Philanthropic giving to diverse community organizations may be curtailed.

Interaction with diverse people may be less frequent during these days of social isolation.

Organizations need to realize that in challenging days, an increased focus on diversity, equity and inclusion is warranted. Tactics you may want to consider at this time include:

• Offering web-based DEI training to your employees, especially those who may have a decreased workload at this time and capacity to take some online trainings. In fact here is one being offered on June 9th: Introduction to LGBTQ+ Workplace Equity.  Options can include general offerings or having your own customized training.
• Doing some strategic work and planning and how you can advance DEI initiatives in a more virtual workplace.
• Encouraging diversity councils and employee resource groups to meet virtually during this time.
• Encouraging one-on-one virtual employee connections or mentoring relationships be formed with a focus on connecting with dissimilar people.

Embrace diversity even more during these challenging days!

The Business Case for Diversity

One of the three core expertise areas I offer in my consulting practice is diversity management with a specialization in the LGBT (Lesbian, Gay, Bisexual and Transgender) workplace and marketplace. Earlier this week I published a similar blog on another area of expertise titled “The Business Case for Career Road Mapping / Skills Development.” Click on that title to link to the article.

Senior corporate leaders and stockholders expect to see a financially based business case for practically any business initiative, and this of course would include corporate diversity programs. Can I show with actual dollars how investing in diversity initiatives (for example, targeted constituency marketing, benefits programs, management training, sponsoring employee network groups, supporting community organizations, targeted recruiting…) can add to a company’s bottom line? Absolutely yes! I agree this is important and can be done.

Many studies on diversity management highlight that robust diversity initiatives positively impact employee engagement / employee productivity, employee retention, and constituency sales. As an example, I will use LGBT diversity programs since that is my area of specialization within diversity management, though the methodology could easily be used for any other constituency (Women, Black, Hispanic, Asian …) or even for cross-constituency programs.

For this example, I will use a 2,000 person business with an average employee salary of $40,000 and annual revenue of $250M. And I will conservatively estimate that 6% of employees and business revenue is from the LGBT constituency.

PRODUCTIVITY CALCULATION: number of employees x constituency percentage x average salary x percent productivity gain = productivity gain in $. For example, with 2000 employees with 6% being LGBT, salaries of $40,000 per year, a 5% productivity gain nets 2000 x .06 x $40,000 x .05 or $240,000.

ATTRITION SAVINGS: number of employees x constituency percentage x average salary x time for fully onboarding new employees x decrease in attrition percentage = saving in attrition $. For example, again using 2000 employees at $40,000, if it take 2/3rds of a year for onboarding and you can avoid 5% of the LGBT population from departing, the savings is 2000 x .06 x $40,000 x 2/3 x .05 or $160,000.

REVENUE GAIN: annual revenue x constituency percentage x percent increase in constituency sales = potential revenue gain. For this example with $250M in revenue, the potential net new revenue from a 5% increase in LGBT market share would be $250M x .06 x .05 = $750,000.

So overall in this case, bottom line we are looking at executing LGBT diversity programs providing a net expense savings of $400,000 and net new revenue of $750,000 to the business.

In addition you would get the “soft” benefits of overall higher employee morale, being able to attract the best talent as word spreads and your enterprise is viewed as an “employer of choice,” and overall community good will.