Understanding the Issues Behind Diversity Representation

With coronavirus vaccines on the horizon for 2021, it is hard not to be optimistic about the future. As we reflect on 2020, it is important to readjust and find ways of coming out of this crisis stronger and better equipped to deal with adversity.

Steering out of crisis demands having a multifaceted workforce in terms of background, religion, gender, experience, sexual orientation, and race in order to keep companies evolving and thriving in thought leadership. The benefits of creating a safe and open environment where individuals feel comfortable to express themselves and remain true to their nature are both beneficial to the health and happiness of the employee and in turn the success of the business. The McGregor-Smith Review found that tackling the racial disparities in the UK labour market could result in a huge annual economic boost worth £24bn to the UK Economy.  Additionally, a study by Out Now Consulting, LGBT 2020 – LGBT Diversity Show Me the Business Case, states that the U.S. economy could save $9 billion annually if organisations were more effective at implementing diversity and inclusion policies for LGBTQ+ staff. Several reports also indicate that women can be key to stabilising companies in financial crisis. For instance, during the financial crash of 2008-09, banks with a higher number of female employees on their boards were more stable than their competitors.

The benefits of diversity have been made clear in countless studies. So what factors are holding us back?

The Obstacles:

As we have seen in recent months disruption to so called ‘normal’ life has understandably been catastrophic, as business priorities shift towards survival, progress made in terms of gender and racial, and general equality in the workplace is stunted. A clear example of this is the suspension of gender pay gap reporting regulations for 2020 by the GEO and Equality and Human Rights Commission as a direct consequence of Covid-19.

According to data from UN Women, the pandemic could set back gender equality by a huge 25 years.  It is easy to get disheartened by this news, however as equally as there are set backs, crisis can also be a catalyst for change. Some social and cultural changes are gaining momentum from the pandemic, like the BLM movement and enacting optimistic change. Jackie Menjivar of Dosomething.org writes that “for the first time ever, racism is being widely acknowledged as a public health crisis in the US”.  Whilst there is still a long way to go in tearing down systemic racism, the pandemic has definitely put institutional racism under a microscope. In support of this, Richard Houston, Chief Executive for Deloitte in the UK, said the Black Lives Matter movement had “given a fresh sense of urgency around racial diversity in business.”  The focus has shifted from why there is underrepresentation of ethnic minorities in business, to why we need representation and what society, the economy and business can gain from diversity.

With the pandemic threatening an increase in the already low representation of women, ethnic minorities, and otherwise marginalised members of society, it is imperative that we examine why recent events are having such a negative impact on specific individuals and what this means for diversity hiring.

Female Hiring:

Globally, women’s job losses due to Covid-19 are 1.8 times greater than men’s and the lockdown in March, saw the hiring of women sharply decline and reach an all-time low in April. One factor that has contributed to this decline is the disproportionate impact the new stresses brought about by Covid-19 are having on women.

With the closure of schools in March and the removal of access to core support groups like neighbours and relatives, parents are facing a juggling act of career success and family life. Whilst this problem is definitely not limited to women and does affect all kinds of families, it can be seen to be affecting women the most, particularly single mother households. These new stresses women face have an inevitable impact on career confidence and the decision to take career risks (i.e., ask for promotion, leave a job to pursue a higher level), and ultimately mean that if they have not already lost their job to the pandemic, many women are choosing to leave their career prematurely to support their families.

McKinsey & Company state that the detrimental impact of Covid-19 on female professionals can be described as nothing short of an emergency, and that we are at great risk of “unwinding years of painstaking progress toward gender diversity.” Many sources suggest that working from home has led to women doing twice the amount of work under the pressures to look after children on top of their 9 to 5. In fact, researchers from the Boston Consulting Group, which surveyed more than 3,000 people in the US and Europe, found that working women currently spend an average of 15 hours a week more on unpaid domestic labour than men. This extra work and added pressures are inevitably causing burnout, causing women to have to leave their jobs, and having an impact on voluntary and involuntary redundancy in women.

The industries that cannot afford to lose women the most, are arguably the most likely to take a hit. In the Tech industry, the small percentage of jobs held by women is at risk of declining further. Women account for only 25% of tech jobs (20% at Microsoft, 23% at Apple and 23% at Google), and a report by Tech Radius revealed that whilst 5% of male tech professionals have lost their jobs to the pandemic, a further 8% of female tech professionals have been made redundant. The worrying thing is that these figures cannot afford this added pressure if an equal ratio of gender is ever to be achieved, and some speculate that this pandemic could set women back half a decade.

One core component in female underrepresentation in tech is the ‘imposter syndrome’, which is most prevalent in male dominated industries with a lack of female role models. Studies have shown that many women in the workplace are susceptible to this concept of the ‘imposter syndrome,’ a phenomenon coined by Pauline Rose Clance and Suzanne Imes, which relates to women having an inability to believe that their success or position in the work place is deserved. Whilst this feeling can ultimately be felt by any individual regardless of gender, race, or background, they found that it was felt disproportionately by women in more senior roles.

With regards to the impact of female representation, Mary Cavanaugh, VP and Senior Consultant at Keystone Associates argues that women in tech roles who see fewer female colleagues have an increased likelihood of developing a sense of not belonging or feeling underestimated, which can be key triggers for imposter syndrome. This is reflected in the statistics, according to the organisation ‘Girls Who Code’ around 74% of young women expressed an interest in STEM fields and computer science, however only 26% of tech jobs are held by women. This shows that the lack of women in these industries is not purely based on an absence of interest or appeal in these fields but could have something to do with the amount of female representation in these industries, and the impact this may have on other women’s confidence and desire to apply.

Ethnic Minority Hiring:

A McKinsey diversity study found that, as a result of the pandemic, 39% of all jobs held by black Americans (compared with 34% by white Americans) are now threatened by reductions in hours or pay, temporary furloughs, or redundancy. In the UK, diversity in senior positions remains at an all-time low, with only 8% of people who identify as Ethnic Black and Minority holding executive positions.

At an even higher risk to redundancy according to McKinsey are women of colour, who have been much more likely to have been laid off or furloughed during the COVID-19 crisis.   Furthermore, they are highly underrepresented in business, with Black females making up 7.4% of the population, but holding just 1.4% of executive positions in the United States.

Women of diverse race are highly vulnerable to disproportionate representation and face both gender and racial bias in the workplace. They are even frequently excluded from diversity hiring initiatives, with less than one in 10 (of diversity targets within companies) aiming to specifically increase the representation of Black and other racial minority women.

Additionally, for the black community the psychological impact of the Covid-19 crisis is far worse given the recent racial violence and tension sparked by the death of George Floyd on the 25th of May 2020. The emotional toll of racial tension has had a huge impact on well-being and motivation which in turn can impact job security.

At C-Suite and Board-level ethnic minority representation is pitifully low.  The HACR (Hispanic Association on Corporate Responsibility) found that in 2013 Hispanic individuals held three percent of seats in the boardroom of the Fortune 500. Furthermore, when it comes to promotions and movement within companies Asian Americans are the least likely racial group to be promoted into Silicon Valley’s management and executive levels.

LGBTQ+ Hiring:

The LGBTQ+ community have also been disproportionately affected by the pandemic when it comes to job loss. A recent study found that 292,000 LGBT adults filed for unemployment benefits. Out & Equal Workplace Advocates also suggest that this is likely to be much higher given that LGBTQ workers tend to be overrepresented in industries that are most impacted by COVID-19.

Mental health in the community has plummeted with individuals forced to separate from the LGBTQ community, which provides so many people with support. An understanding of this in a workplace environment and creating a safe space for employees is vital to attaining and retaining LGBTQ+ talent and must be improved.  Out Now Consulting, found that more than 40 percent of lesbian, gay and bisexual individuals, and almost 90 percent of transgender persons have experienced discrimination in the workplace, suggesting a systemic and societal problem that will only grow in this climate if left unchallenged.

What Does This Mean for Diversity Hiring?

Taking all of this into account and in order to move forward, diversity hiring needs to be a priority for 2021. Companies need to commit to improving candidate and employee experience; increasing overall representation; creating an all-inclusive environment; and it is imperative that their internal and external hiring processes reflect this.

We must act now to address problems in the hiring process that are likely to either put off specific individuals or put them at a disadvantage in the selection process. For our account on bias in the workplace and a more in-depth study of how you can tackle the above issues in your internal hiring process, please see part #2 of our D&I content series.

For more information on where IRG can diversify your leadership and executive teams, please contact Kate Johnstone on +44 782 578 7526.