Maintaining diversity and inclusion efforts during Covid-19

6 Jul 2020 By Alison Woods

As businesses ease out of lockdown and the inevitable cost-cutting begins, employers should make sure D&I doesn’t drop off their to do list, advises Alison Woods

The future economic outlook is not rosy. According to the Bank of England, the UK faces the worst recession in 300 years and is top of the recession league table of OECD countries. Further job losses are unavoidable as the Job Retention Scheme is phased out and the full impact of the pandemic fallout is felt.

While there have been long queues outside retailers as they reopened, coming out of lockdown is not going to deliver an instant bounce-back. Cost pressures and a desire to maintain cash reserves are going to be front and centre.  It may be tempting, against that background, to see diversity measures as being something that can be dispensed with.  

Is diversity an optional extra?

While no business would want to be seen to discriminate unlawfully, there are a range of approaches and levels of enthusiasm for embracing diversity. Some may view diversity as a ‘nice to have’, rather than a need to have. 

What does this mean for workplace culture, where employees and clients alike will be witness to the results?  In recent years, regulators have recognised that the ‘right’ culture is a key component of effective risk management. Culture is how people behave in an organisation. 

There are many components that need to be in place to achieve a consistent culture across a large organisation, and diversity and inclusion measures are key. Inclusion is about building on diversity by giving a sense of belonging through the culture of an organisation. Poor working cultures contribute to a host of legal problems eg, whistleblowing complaints, workplace harassment, poor mental health, and absence.  

The business case for diversity

Gender diversity is proven to have a direct link to both improved profitability and value creation. There is no reason to think that ethnic diversity does not do the same.  

Having teams and leaders with different views and life experiences produces innovation and reduces ‘group think’, commonly cited in relation to the financial crash in 2008.  None of us knows what the post Covid-19 future looks like, but there is agreement that many aspects of our lives and businesses will change.  As Andrew Bailey noted when he was Chief executive of the Financial Conduct Authority: ‘Diversity and inclusion help to mitigate the risk of groupthink, and I believe they provide an opportunity for competitive advantage to organisations by helping them to make better decisions and to think in the long-term.’ 

The diversity of an organisation is also important to ensure it is reflective of the customer base or service users. 

In the last five years, we have seen significant gains in some areas of workplace diversity. Similarly, significant steps have been made with mental health at work. Calling a halt on reform now will see valuable progress slide away. With studies showing that the pandemic’s fall out has had a disproportionate impact on women and BAME individuals, arguably this is a time to increase the focus on diversity rather than reduce it.  

We have yet to see the final details of ethnicity pay gap reporting in the UK. However, given the welcome renewed focus on addressing race discrimination, we expect that ethnicity pay gap reporting will be pushed up the agenda. 

Can we afford to focus on diversity in a recession? Perhaps the better question would be, can we afford not to?

Alison Woods is an employment partner at CMS

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