2023 has started on a sour note for the tech sector, as over 139,000 employees have already lost their jobs. Leading tech companies like Meta, Twitter, Google, Amazon, and Salesforce are among the many to lay off employees. Even venture-backed tech companies have followed the same route due to a lack of funding.
Frankly, industry experts had long anticipated this situation.
During the pandemic, tech companies over-hired people to meet the rising demand for digital transformation. They doled out attractive compensations to acquire skilled talent.
However, the looming recession, inflation, and geopolitical unrest have made companies wary of spending money on tech projects. According to a Workday survey, 58% of executives admitted a slowdown in digital transformation. Artificial Intelligence’s (AI) rapid proliferation has also shaken the industry.
All these factors have led to massive layoffs. More worryingly, it has put the DEI initiatives on the back burner.
Women and Minorities are the Worst Hit
While the overall situation is terrible, it has become notably worse for women and minorities.
Research shows that 45% of women lost their jobs during the recent layoffs, and there is a deep-rooted problem behind that. Despite tech companies’ commitment to Diversity, Equity, and Inclusivity (DEI), women and minority ethnicities are underrepresented. They are hired in human resources, communication, and customer success roles than in technical positions. So, they are more likely to face layoffs first than employees in product or business leadership positions.
Even if women are hired in engineering, they are more likely to be affected than their male counterparts. A lawsuit against Twitter, for instance, showed that the company laid off 63% of women in engineering roles compared to 48% of men. Sometimes there are no specific reasons for firing other than the last in, first out criteria. The ones who joined recently are more susceptible to getting removed. Several records show that women and people from different ethnicities were hired after the George Floyd incident. That’s as recent as 2020!
All these issues have impacted the tech sector’s DEI commitments.
Ignoring DEI could damage a company’s reputation and impact the bottom line. McKinsey’s research shows that companies with diverse teams were 25% more profitable than non-diverse peer companies.
Even highly-skilled women and minorities hesitate to join companies that do not value DEI.
Here’s what Meri Williams, Pleo’s CTO, had to say about their reluctance.
“I know a lot of women, people of color, and LGBTQ+ folks who are much more careful about where they choose to join because they’re worried about whether the environment is going to be inclusive and positive for them.”
Given the need for skilled people to take the business forward, companies must revisit their DEI policies and work towards building a diverse, equitable, and inclusive workplace.
Let’s look at how they can improve the DEI within the company.
How To Improve DEI in Your Company?
1. Retain Objectivity During Layoffs
While layoffs are inevitable, leaders should avoid unconscious bias during the process. Use the right metrics to support the decision, maintain transparency, and hold honest conversations with employees. Support them through the process and aid them in finding new jobs or upskilling. Avoid burning the bridges during exit. Ensure there are DEI champions to represent the underrepresented employees and maintain objectivity.
2. Invest in Training
An economic downturn should not be a reason to lay off employees. Companies can use this opportunity to train underrepresented people and make them future-ready. Several major companies in the UK have opened centers of excellence to upskill women, ethnic minorities, and underprivileged people and build a talent pipeline. It will help the companies prepare for future projects.
3. Build a Culture of DEI
While companies started to focus on DEI initiatives during the pandemic, the efforts were reduced amidst the layoff season. Companies must stop looking at DEI initiatives as a one-time exercise. They should make it a part of the company culture. Revisit the company’s existing DEI policies, address the concerns of the underrepresented employees, and ensure that all leaders embrace diversity and inclusivity.
Ingrid B Laman, Gartner’s vice-president of Advisory in HR, recommends having open communication with executives and gaining their commitment towards DEI strategies. She said, “To fully embed DEI into the business, organizations must enable executives to develop their own DEI goals, hold them accountable, and enable them to embed DEI into their business practices.” Hence, demonstrate the value of having diverse teams to the leadership team and make it a non-negotiable initiative.
4. Work with Diverse Suppliers
Diverse supplier businesses are owned and operated by at least 51% of underrepresented individuals or groups. These businesses aim to promote economic growth among women and minorities. Public Law 95-507 mandates government contractors to work with diverse suppliers. IBM was one of the first companies that worked with diverse suppliers.
A partnership with diverse suppliers benefits the underrepresented businesses economically by creating a level-playing field for them. But more importantly, the association helps tech companies. It widens the talent pool, drives competition in the supplier base, boosts innovation, and saves costs. They also help companies reach a diverse customer segment, expand business in new markets and demography, and improve their reputation. So, find diverse suppliers who can align with your business needs, train them, and partner with them for long-term business.
Parting Thoughts
The current economic conditions may not seem conducive to business growth. However, don’t allow that to affect your well-established DEI programs and initiatives. Review them and find ways to engage with underrepresented employees and partners to grow business, drive innovation, and uphold your commitment to building a diverse, equitable, and inclusive workplace.