Fragile gains on workplace diversity and inclusion could be threatened as a wave of layoffs gathers momentum in 2023, hitting multiple industries including technology, automotive and financial services. According to layoffs.fyi which tracks this data, the tech industry alone has cut more than 127,000 jobs since the start of the year.  Experts are saying this will disproportionately impact marginalized employees and could even wipe out IE&D functions in some companies. This follows a slackening in IE&D investment over 2022, which saw fewer senior diversity roles up for grabs. 

These reversals not only run counter to rising cultural and consumer trends, but also conflict with so much recent research, which suggests that brands prioritising inclusion will build long-term advantage.

Propelling progress

Investing in inclusion is propulsive, driving progress for businesses and for wider society. Internally, experts say, inclusion fights negative groupthink and can lead to more innovative products and services. And by partnering with diverse businesses, companies foster innovation.In a recent interview with CNBC, Shelley Stewart, a senior partner at McKinsey, called this “the biggest lever to impact society apart from wages.”  In a global study, 78% of people agreed that businesses can do a lot to support racial equity by investing in BIPOC people as employees or suppliers.

But more broadly, focusing on inclusive and accessible design has been shown time and time again to drive better design, as innovations created for people who need adjustments often make life easier for everyone. Recent research shows that young viewers aged 18-24 are four times as likely to use TV subtitles as older people (aged 56-75) for instance. As Kat Holmes writes in her book Mismatch, many everyday objects “are the descendants of a long history of innovations that were made to remedy exclusion.”

Inclusion is a journey

Backpedalling on IE&D pledges could seriously undermine trust and even damage brand reputation. Customers and employees alike are alive to the cognitive dissonance generated by inconsistencies between brand messaging and behavior. As Angie Kamath, dean at the NYU School of Professional Studies recently told Bloomberg, “Cutting DEI oriented staff now, unless you’ve made progress and can say ‘mission accomplished’ is not a good look.”   

Inclusion is not a project, or an activity that businesses can dip in and out of, it’s a commitment that should inform ways of working. The more it becomes rooted in the DNA of the business, the more it will differentiate and even drive loyalty: 66% of people say they are more inclined to buy from brands that speak out on issues of equality and inclusion.

Start on the inside

Companies that build inclusive cultures are more likely to attract talent. 61% of people say they will only work for a company that has made strong commitments to inclusion, rising to 69% amongst generation Z, and peaking at 77% among LGBTQ+ respondents. A McKinsey study from October 2022 found that one in five female leaders had left a position because of a lack of commitment to IE&D. Dismantling IE&D teams risks exacerbating these issues by stalling promising initiatives aimed at building more inclusive cultures in their infancy. How companies respond to this issue in the financial downturn will likely shape their ability to attract talent in the future, especially from underrepresented groups.

Delivering meaningful inclusion

Meaningful inclusion is now a brand imperative: 75% say companies and brands must play a role in solving big societal challenges such as equality and social justice. To properly identify and address product, service, and experience gaps where they are not meeting the needs of underrepresented groups, businesses must not just hire and collaborate with people with lived experience but ensure they have influence too. Companies like Unilever and Microsoft are making strides in implementing accessibility in physical and digital environments by doing this, enabling them to deliver innovative adaptive products and experiences. Innovations like these not only open up brands to underserved audiences and their families, but they will also win favour with their allies.

Driving better business

Environmental, social and governance credentials are increasingly important in investment analysis and the way companies treat their people is under scrutiny. Linking executive pay to IE&D performance, alongside other sustainability targets, is becoming more widespread. Businesses see inclusion as doing good, but marginalized communities and their allies control significant disposable income. Brands that make diverse groups feel seen, acknowledged, welcomed, and served will find audiences who are ready and willing to spend. Inclusion is good business.

Inclusion is not a project or initiative to be checked off. It’s a way of working, an operating model with an array of potential benefits. But it can only deliver these through ongoing commitment and action. By holding steady on investment despite difficult headwinds and working to embed inclusion as a business fundamental, brands can underscore their values, win trust and loyalty, and deliver meaningful change for underrepresented communities: a genuine win-win.