diversity and inclusion

Investment in diversity and inclusion is slowing down – here is why this is a problem

The pandemic has caused businesses to pause and carefully consider how they allocate their budgets, time and energy. Diversity and inclusion (D&I) still rank low on the priority list of many companies at the moment, according to studies done by McKinsey & Co and the FT, despite the topic being on the current social agenda. Most companies have not completely stopped investing in D&I but have paused active engagement initiatives. Specialists warn that this move could be damaging to a company’s reputation and financial health in the long run.

Fragmentation of the workforce

The McKinsey & Co study, which was done in May 2020, shows that 27% of reported organisations have put their D&I initiatives on hold in an effort to decrease expenses during the pandemic. Leaders are faced with the challenge of deciding how to create a new workplace dynamic in the ‘new normal’, while not unintentionally alienating minority groups. Working from home policies play a major role in the potential alienation of minority groups and in the perpetuation of existing diversity and inclusion issues. For example, employees that do not have a good broadband connection will struggle to stay up to date with work and could miss informal bonding activities. Female workers having to juggle work and a larger amount of household and family chores might equally feel alienated from the workplace culture and unable or unsure who specifically to talk to about their concerns. Deciding whom to furlough is an equally important issue, as companies need to make sure they are not disproportionally furloughing workers based on their ethnicity, religion, sexual orientation, gender, background or ability. The fragmentation of the workforce across the world could have negative effects on the ED&I workplace culture if not thoughtfully managed.

The benefits of a strong D&I culture

  • Attract top talent by building a reputation for being truly diverse and inclusive.
  • Diverse teams are better at problem-solving
  • Diversity and inclusion will improve decision-making
  • Create a better brand reputation by investing in D&I
  • Increase customer satisfaction

Disengagement from these issues is not only dangerous for a company’s reputation but also for its financial health. According to the same McKinsey & Co study, research from the 2008-09 economic crash shows that businesses with a diverse and inclusive workforce are better at successfully overcoming crises. The same study suggests that banks run by women are less vulnerable to crises. Aside from the fact that increasing diversity and inclusion can improve businesses’ ability to recover, putting D&I at the core of the workplace also increases a company’s ability to respond to post-pandemic challenges.