(with commentary by Bridge Partners LLC)

Bosses must shore up diversity against downturn

By Andrew Hill

Published: October 20 2008 18:33 | Last updated: October 20 2008 23:29

Crisis and recession will put to the test many projects that were easy to pursue during the years of prosperity. Inevitably, one will be the commitment of companies to diversity in the workforce.

However deep the downturn, no executives will admit their devotion to employing and promoting staff of different background, gender and mindset has ebbed. But consider the pressures.

In a crisis of trust - at its starkest in the near-total breakdown of confidence between the world's biggest banks - people cling to what they understand. At enlightened companies, where diversity has deep roots, the difficult climate should simply reinforce a strong culture. But at other companies there is a risk of back-sliding.

The cost-cutting axe will fall first on those, of whatever background, who should have been quietly nudged out during the good times. However, the second wave of redundancies could easily sweep away those who "don;t fit" or who work part time (often women). Senior staff who never bought into diversity programmes will make the case that it is risky to "experiment" now. Better the devil you know?

Meanwhile, positive discrimination will be turned back on to executives that promoted it. Will companies that selected, say, the female candidate, all else being equal, be similarly disposed to save a woman over an equally qualified man when it comes to cutting jobs?

In private discussion this weekend during the Women's Forum in Deauville, France, top executives, male and female, agreed the development of a more balanced workforce was a one-way street. But they conceded that managers' protective instinct to revert to the comfortable and familiar could affect the speed of progress down that street.

Happily, countervailing pressures are strong. Some could even increase as a result of the crisis. Younger generations cannot conceive of a workplace that does not reflect the "real" world. The "war for talent", particularly in the upper echelons of multinational companies, will not abate for long. The campaign to find different faces for the executive committee could even accelerate, because of the failure of "pale, male and stale" leaders to foresee, let alone prevent, the current crisis.

One (female) executive made the point at Deauville that diversity programmes were like research and development budgets. It takes a determined chief executive to resist cuts to the R&D budget when times are tough. Yet in the long term those who temporarily scale down research will suffer competitively. Now is the time for corporate leaders to shore up such initiatives if they want their companies to emerge stronger from the crisis.

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EDITOR'S CHOICE

Comment on this column

Diversity Recruitment

by Tory Clarke 27 Oct 2008 02:22 PM

It's disturbing to think that "managers' protective instinct to revert to the comfortable and familiar" means qualified employees from diverse backgrounds might be impacted the most during an economic downturn.

As Mr Hill alludes, if companies weren't forward-thinking enough to recognize the value/competitive edge of diversity during prosperous times, it is unlikely that they will accept the need to change during uncertain times. However, this outmoded view should be seen as an opportunity for those enlightened companies that have woven diversity into the very fabric of their culture, as well as those companies that have recently embarked on business-driven diversity initiatives.

By not recruiting the best new talent, companies will fail no matter the economic environment. Those more enlightened companies should use the fact that a commitment to diversity is an intrinsic part of their economic imperative and their employer brand, to hire the very best. Meanwhile, companies that develop a reputation of being unsupportive of "unfamiliar" employees, will not be able to recruit the highest-caliber executives, and "younger generations" will soon look elsewhere for employment.

Bridge Partners LLC (www.bridgepartnersllc.com) is an executive search firm that is dedicated to helping companies move forward in an ever-changing, continually competitive business environment. We have a fundamental commitment to presenting our clients with high caliber diverse candidates, who have both the best skills-set for the job, as well as being the right "cultural fit." Change doesn't have to be so uncomfortable.

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Diversity

by Andrew Hill FT Journalist

21 Oct 2008 02:26 PM

I agree with you, John, on the principle of equal treatment - and that in the long term companies will suffer that don't recruit from the whole marketplace. As for advocating discrimination, it's a fact that some (usually male-dominated) companies take the view that to improve balance they should recruit the woman over an equally well-qualified man. Here's a piece I wrote a couple of years ago that examines that issue:

The contested question of quotas

I was simply posing the question of how such a policy might be applied when it comes to cutting jobs, not adding them.

Andrew.

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Diversity

by John 21 Oct 2008 12:00 AM

It is obvious that companies that discriminate for reasons other than choosing the best person to do the job or paying the market rate will suffer.

There are still some, and it is not just Schadenfreude to welcome their discomfiture as it will encourage les autres to be more sensible to the benefit of the whole community.

Sadly it looks as if you are arguing FOR discrimination.

Of course CEOs should not choose to keep staff solely on the grounds that those are ones with whom they feel comfortable, but to say that they ought to keep individuals just because they are female is even worse.

Last week the FT had an article complaining about the lack of senior female executive directors in Germany, which suggested that the only one was the Risk Director for Hypo Real Estate.

NOT a good example - in fact several degrees below 'Fred the Shed' who got sacked.

How about treating people as people? If you have to lay someone off then an intelligent Human Resources Department (if this is not an oxymoron) should dump those whose costs are less than their costs.

Bosses must shore up diversity against downturn

Keywords: diversity, downturn, executive, talent, recruiting, bottom-line, strategy, initiative