Diversity hiring initiatives have boomed in recent years. Companies of all sizes, especially in the tech sector, have invested in programs to attract candidates from a variety of “nontraditional” talent pools.
While some companies claimed the investment was about “doing the right thing,” others focused on a business case that diverse teams are better teams. That is, when people come from different perspectives and backgrounds, they come up with more innovative ideas and better solutions to problems.
Of course, it did not escape the notice of those of us running these programs that the unemployment rate was near record lows. In fact, the official unemployment rates didn’t even tell the whole story. As we well know, even pre-COVID-19 there were many Americans who were struggling to find work and support themselves and their families. But at the same time, many employers were finding that for certain job categories, the unemployment rate was effectively negative — all the software engineers in San Francisco Bay were employed and many had competing offers nearly constantly.
What Happens Now?
So the question on my mind, and on the minds of many, is What happens now?
It’s impossible to know where the unemployment rate will be by the time we get to the other side of this crisis. And it will again be true that the largest portion of jobless individuals — service-sector workers and those working low-wage jobs — will be in the lowest rungs of the economic ladder.
But there will also likely be a period of time when the competition for college-educated professionals will fall to the employers’ favor. In an economy where there are lots of software engineers actively looking for jobs and not ducking recruiters’ phone calls, will companies still invest in diversity hiring initiatives?
Post-COVID-19, we are going to learn which employers were really committed to the need for diverse teams and which were just desperate for employees. It reminds me of an expression I’ve heard a lot recently about how recessions quickly decimate weak companies: “When the tide goes out, you suddenly see who was swimming naked.”
When companies begin hiring again (and they will) but no longer feel the need to “invest” in diversity hiring programs because talent seems to be plentiful, it will become immediately obvious which companies never really cared about bringing in new kinds of talent. They only cared about filling seats.
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3 Reasons Why Cutting D&I Programs Is a Big Mistake
1. D&I Is Actually Good for Business
First, what really wasn’t BS about D&I hiring efforts was the business value of diverse teams. They are more adaptive, effective, and resilient — the exact qualities businesses need right now to navigate the many challenges ahead. As recent research by McKinsey points out, “The business case for inclusion and diversity (I&D) is stronger than ever. For diverse companies, the likelihood of outperforming industry peers on profitability has increased over time, while the penalties are getting steeper for those lacking diversity.” For instance, McKinsey’s findings show that “companies in the top quartile of gender diversity on executive teams were 25 percent more likely to experience above-average profitability than peer companies in the fourth quartile.” Cutting D&I hiring programs now is the exact wrong approach.
2. Great Talent Knows No Color, Gender, Ethnicity…
Even in a tight labor market, good talent can be hard to find for those jobs you do have open. Expecting the high unemployment rate to work magically in your favor may not work out as you might hope. That’s because a broad unemployment rate tells you nothing about the availability of talent for your specific roles. It’s very likely that many restaurant workers will be seeking employment for a long time to come, but that won’t be helpful to you if you are a tech company trying to source data engineers.
Also, in a bad economy those who do have jobs become very reluctant to leave them, which is especially true for the highest performers. So while your volume of applications may be high, the quality of candidates may be down. And yet, you may still be screening out potentially great candidates without the right diversity initiatives.
3. It Sends the Wrong Message
Finally, cutting your D&I programs sends a very clear signal to employees that your prior “commitment” was really just corporate window dressing. Which, let’s face it, is what they might already think if projects exist on paper only. The internal employee brand erosion, especially among marginalized groups, will be profound.
Bottom line: Companies that continue to make diverse hiring programs a priority will benefit, all the more so if their peer companies forego them.