Gender Equity Is Key To Surviving A Recession
Welcome to my weekly Q&A feature. (Scroll down to find the Q&A.)
If this is your first time here, welcome. I spend a fair amount of time speaking at events and conferences. At the end of my presentations, I leave space for audience members to ask questions — tough questions, brave questions, you name it. The level of candor and curiosity always inspires me, and I want to share that sentiment with you. Each week I pick one question that I believe others would find most instructive and publish my response to it here.
The purpose of this weekly tradition is transparency and inclusion.
- Transparency: a behind-the-scenes look at my day-to-day.
- Inclusion: bringing others along on the journey.
Insulate Your Company With Gender Equity
How can companies keep fighting for gender equality even when the economic outlook is bad (like it is now, arguably)?
Curious about something? Ask your question here for a chance to have it answered in an upcoming edition of Brave Souls®.
For many companies, gender equity is like golf: it’s an enjoyable activity on pleasant days, but they avoid it in inclement weather. Given the Fed’s hawkish posture, a bemused bear market, and the IMF’s gloomy GDP forecast, you could make the case for today’s inclement economic outlook.
Major companies across the US have already gone into recession-mode. So far this year:
- 37,000 US tech workers lost their jobs and many more have announced hiring freezes
- Mark Zuckerberg requested that managers turn the heat up on employee performance
- Sundar Pichai asked employees to show “greater urgency, sharper focus, and more hunger than we’ve shown on sunnier days”
As champions for gender equity, we must contend with the reality that diversity, equity, and inclusion is a fair weather activity for many companies. Now, instead of turning to exasperation, let’s turn to empathy.
Gender Equity From The CEO’s Perspective
Think about it from the CEO’s perspective. As a CEO, your job security rests on your ability to lead through good times and bad. Your board of directors will hold you accountable to the decisions you make today.
How will you keep the lights on when cash stops flowing? Will you maintain profit margins when customers cut back on spending? Can you justify capital investments when interest rates continue rising?
The ability to prove ROI underscores the shrewd CEO’s decisions. Without the data on ROI, it’s difficult to validate your decision to dedicate resources toward anything — such as gender equity — and thus buttress your job security and your company’s financial performance.
So it makes sense why leaders would cut “frivolous” diversity, equity, and inclusion spending during economic downturns. Because the security that comes with corporate austerity outweighs the risk of experimenting with corporate extracurriculars like gender equity.
And therein lies the problem: gender equity isn’t an extracurricular activity. It’s not frivolous. It’s not a liability. It’s an asset.
Gender Equity Is An Asset, Not A Liability
Diversity, equity, and inclusion leads to:
- Higher return on sales, equity, and invested capital
- Better board member attendance and involvement
- Performance that outperforms industry averages
- Better performance on highly complex tasks
- Higher scores of organizational excellence
- Better corporate governance and oversight
- Better corporate social performance
- Improved corporate sustainability
- Better problem-solving abilities
- Improved corporate reputation
- Decreased turnover intentions
- Higher-quality CSR initiatives
- Higher collective intelligence
- Higher market to book value
- Lower risk of insolvency
- Higher social sensitivity
- Lower corporate fraud
- Increased innovation
- Increased firm value
- Better stock growth
- Reduced conflict
And that’s not all. Research shows that diversity, equity, and inclusion can actually help organizations weather economic downturns and bounce back stronger.
From 2007 to 2009, the S&P 500 declined 35%. However, businesses where key employee groups such as women and people of color said they had “very positive experiences” saw their stocks rise an average of 14.4%. Moreover, the stocks of pro-equity businesses rose 35% between 2006 and 2014, whereas the aggregate S&P 500 rose only 9% during that time.
This stock market analysis corroborates Pipeline’s research showing how companies reap a 1–2% increase in revenue for every 10% increase in intersectional gender equity. Now is not the time to scale back progress toward gender equity. As the data shows, gender equity is a survival strategy during recessions and their derivatives.
TL;DR: Gender equity is a revenue driver, not a cost center. As such, economic lethargy should prompt leaders to double down, not loosen up, on gender equity.
Curious about something? Ask your question here for a chance to have it answered in an upcoming edition of this newsletter.
This article was first published on my website.
© 2022 Katica Roy™, Inc.