The Deprioritizing of Diversity in the Economic Downturn

The Deprioritizing of Diversity in the Economic Downturn

This week I read a Crunchbase article that discussed the funding statistics of Black-founded startups and it struck me that we seem to take one step forward, only to take two steps back, when it comes of prioritizing diversity and with the economic downturn, it feels like it is happening again.

Data shows that the investment community is deprioritizing funding of Black-owned businesses and, truth be told, I am starting to see this happen in corporate recruiting efforts as well.  It makes me wonder if we will ever see the gender and race gaps close, with all the backsliding, and how leaders can solve for this.  Based on what I see through our recruiting practice, there are several reasons this is happening, but I also believe it is solvable if leaders can look beyond the moment they are in, and focus on what they want their teams to look like in years to come.

THE KEY PROBLEM:  Performance overtakes patience

I’ve never met a CEO who is not looking to diversify their leadership team and hire more women and people of color.  The problem is real in that there are fewer women and people of color who have made it to the executive suite which means recruiting top diverse talent is highly competitive and often hiring managers feel that candidates do not have the full suite of experiences they seek.  When budgets get tight, and revenue starts to take a turn, CEOs and hiring managers quickly pivot to hiring for experience vs. hiring for potential and sometimes hire quicker, seeking a silver bullet, vs. spending the time to cultivate relationships with diverse talent that is already in the executive suite.  When a downturn happens, company resources become constrained and leaders have less time, resources, and patience for recruiting, onboarding, training and coaching while they become laser focused on immediate results.  Hiring for diversity gets downplayed as a luxury that is prioritized in more robust times.

THE SOLUTION:  Play the long game.  Build your talent plan and work it.

Any accomplished person knows the secret to success is working your plan and taking action every day.  Throughout my 20+ year career I have been involved in or listened to discussions related to the gender gap and race imparity.  It has been a problem in both business and society for decades but it can be solved.  I think few people would argue against how valuable diverse teams are and how important it is for the growth and success of a company, but the actions leaders take are short-term and there are very few people or companies I see taking a long-term approach to diverse hiring, beyond the goals and statistics typically housed in the HR departments.

One solution here is for CEOs and leaders to identify and mentor diverse talent, taking an active role in their growth and in their development as executives. This is a solution that is often talked about, and by no means is the only one, but it is one that is actionable and has multiple benefits for both companies and society.  Imagine if 5 years ago every established CEO or leader made a commitment to mentor and sponsor one person of color, to advocate for them, guiding them to the top of their organization, giving them constructive feedback and helping them learn how to become a high-performing leader.  It is interesting to think about the pool of talent that we would have if today’s leaders made a concerted effort to identify, network and mentor diverse talent, in an effort to advance others, while also serving their own need of building their bench.  While it may feel like a painfully long, even simplistic, approach to the problem, if today's leaders could look at this moment of slowdown as an opportunity to design their team of the future, it could be solved.

My suggestion is to challenge yourself and challenge your team to identify diverse, talented people, both inside and outside of your organization, and begin to nurture these relationships while formally implementing a mentorship program for rising stars.  Your company may be pausing on hiring today, but this cycle will change, and you will be on a race to hire again.  Now is the time for act so that when the winds shift, you have built the network and bench to hire the leadership team you imagine.