Bearing in mind that COVID-19 has significantly disrupted many organisations, mostly in a dramatic, negative way, many HR leaders find themselves in challenging positions.
Most organisations are having to balance dramatic short-term declines in revenue/income and extreme cashflow pressures with the need to try and retain a talent bench for the future, whatever that may bring.
Research shows that women and minorities have historically been disproportionally impacted during restructuring exercises, and that, during the first half of this year, unemployment is rising fastest for women and people of colour.
The net result is that redundancies, while intended to strengthen a company during a period of crisis, ultimately pose a substantial risk for many organisations in the longer-term.
It is not uncommon to hear of CEOs publicly pronouncing their commitment to DE&I whilst their head of HR wrestles with how to remove a large chunk of the employee base, recognising, as in many retailers’ recent experiences, that they are in danger of creating further unbalance in the constituency of the employee base.
These risks can be mitigated through approaches that incorporate and even elevate DE&I objectives while simultaneously helping the company reshape.
When performed thoughtfully and transparently, companies making the difficult decision to let employees go can emerge with a reformed and renewed organisational structure that capitalises on the benefits of having a diverse workforce. The following are vital areas of focus whilst going through a restructuring.
Understand your organisation’s diversity
Using rigorous workforce analytics to identify where in the organisation the diverse employees currently are will help you understand the DNA of your company. Knowing how diverse talent develops in your organisation is vital.
For example, middle managers, usually the level most affected by redundancies, play a pivotal role in mentoring and inspiring diverse junior employees who then grow to become leaders who will nurture the next generation of high-potential diverse talent.
This does not mean that all diverse individuals must be protected from redundancies. What is most critical is that managers are armed with insightful data about workforce composition, are informed about the importance of maintaining a diverse talent pipeline and make smart decisions as a result.
Make sure restructurings are led by inclusive leaders
Inclusive leaders are those who are most invested in maintaining and leveraging diversity for the benefit of the organisation. When leaders who are making decisions about restructuring exercises do so with an inclusive mindset, they are able to make conscious trade-offs that prioritise diversity.
Doing so requires a clear awareness of individual bias on the part of the decision maker, and an understanding of how bias can relate to behaviour evaluation, stereotyped perceptions, and performance/potential assumptions.
Organisations that fully consider the impact of each decision in the context of the broader DE&I agenda, with a goal of being inclusive, can preserve their organisation’s DE&I investments, and help continue that work in the future.
Reinforce your commitment to DE&I
Leaders across the business need to recommit to the DE&I goals and be transparent in discussing the effect that downsizing may have had in the company’s culture, and the steps leaders took to mitigate any potential unintended and undesired loss of diverse employees.
At a time when external stakeholders are demanding that companies very proactively make public statements about DE&I, and employee concerns quickly become public knowledge, reinforcing your company’s commitment to DE&I and openly discussing actions that will be taken is essential.
Prepare for the recovery phase
Once restructuring plans are agreed upon and are implemented, it is essential that leaders begin preparing for the recovery phase and understand the effect of downsizing on your company’s DE&I agenda and what damage may need to be repaired.
Leaders could consider establishing a scorecard to take a data-driven approach to DE&I strategy and allow for considered, thoughtful measurement and analysis of talent representation.
This scorecard can be crucial for understanding the effects of any downsizing on the organisation and to identify the areas where investments in rebuilding a diverse workforce are most critical.
Over the long-term, having inclusive leaders and equitable practices ensures that employees feel higher levels of belonging. Leaders will always be faced with tough talent decisions, especially during difficult economic times, but those decisions can be made while minimising the effect on a company’s diversity.
Anna Penfold is head of Russell Reynolds Associates human resources practice in the UK.