How to Maintain Diversity Hiring During Economic Downturns

4 Min. Read

When financial pressure mounts, organizations often question whether they can maintain their commitment to diversity, equity, inclusion, and belonging (DEIB). The assumption is that diversity hiring strategies are expensive or expendable. In reality, cutting back on these efforts can have long-term negative effects on innovation, talent retention, and overall performance. Research consistently shows that companies with diverse workforces outperform their competitors in terms of productivity, financial performance, and employee satisfaction. So how can companies maintain their DEIB goals during tough economic times? Here are several approaches that allow organizations to remain committed to diversity, even with limited financial resources.

How to Stay Committed to Diversity with Limited Finances

Focus on Internal Talent Development

In challenging financial climates, organizations often look for ways to maximize the talent they already have. One of the most effective ways to maintain diversity in hiring is to promote it internally. Rather than investing large sums into external recruitment, companies can focus on upskilling and developing the diverse talent already within their ranks. This has the dual benefit of cutting external hiring costs while also fostering a more inclusive culture that values the growth of underrepresented employees. For example, mentorship programs, leadership training, and targeted development tracks for employees from diverse backgrounds can ensure that these individuals have opportunities to advance.

A 2021 study from the Harvard Business Review found that companies with structured internal talent development programs had higher rates of retention and better leadership diversity. This approach also helps maintain the integrity of the organization's DEIB commitments, showing current and prospective employees that the organization prioritizes not just hiring diverse talent but also retaining and developing it.

Learn why embedded hiring is the future of talent acquisition in our blog.

Utilize Strategic Partnerships and Networks

Financial challenges often prompt companies to lean on their network for support, and the same approach can apply to diversity hiring. Strategic partnerships with organizations that specialize in promoting underrepresented talent can help companies access diverse candidates without the steep costs typically associated with recruitment firms. Partnering with historically Black colleges and universities (HBCUs), veterans’ organizations, or non-profits focused on gender or disability inclusion can open doors to talent pools that are often overlooked.

By fostering these relationships, companies can broaden their reach without requiring additional investment in costly recruitment campaigns. The National Association of Colleges and Employers (NACE) has long suggested that universities, nonprofits, and professional organizations are critical for companies seeking to diversify their applicant pools, especially when budgets are tight.

Leverage Technology for Bias Reduction and Efficiency

As technology evolves, the tools to promote equitable hiring are becoming more sophisticated and cost-effective. Artificial intelligence (AI) can streamline recruitment processes and significantly reduce the time and cost of sourcing candidates. Moreover, AI and machine learning tools can be programmed to identify and reduce bias in candidate screening, thus making the hiring process more inclusive without necessitating the expense of external consultants.
For example, platforms like HireVue or Pymetrics use AI to screen candidates in a way that minimizes human bias, ensuring that candidates are evaluated solely on their skills and qualifications. McKinsey & Company’s 2020 report on DEIB stresses that businesses leveraging AI tools for recruitment often see faster hiring cycles and more diverse candidate pools, making them a valuable resource in financially lean periods.

Tailor Job Descriptions and Broaden Recruitment Channels

Job descriptions can unintentionally deter diverse candidates from applying. During times of financial hardship, organizations should take extra care in crafting inclusive job descriptions that appeal to a wide range of candidates. By focusing on skills-based qualifications rather than overly prescriptive credentials, companies can attract diverse talent without needing to invest in wide-reaching or costly advertising campaigns.
Additionally, companies should explore alternative, lower-cost channels for recruitment. Social media platforms like LinkedIn, as well as industry-specific job boards and professional networks for underrepresented groups, can be effective in reaching a more diverse talent pool. Companies like Slack have community job boards, while organizations like Black Tech Pipeline or Women Who Code offer platforms dedicated to underrepresented groups in technology.

Maintaining a Long-Term Perspective on DEIB

While it may seem pragmatic to scale back diversity initiatives when budgets are tight, the long-term impact of doing so can be detrimental to an organization's competitiveness and culture. A study by McKinsey found that companies with more diverse executive teams were 25% more likely to have above-average profitability compared to their less diverse counterparts. Moreover, the same report highlighted that companies with strong DEIB strategies tend to be more innovative and agile, qualities that are crucial during periods of financial instability.

Companies that cut back on DEIB efforts risk losing the competitive edge that a diverse workforce provides, especially in global markets where innovation and the ability to adapt are key to survival.

Resilience Through Inclusion

In times of financial uncertainty, companies must resist the temptation to view diversity as a luxury. Instead, it should be seen as a driver of resilience and innovation. Organizations that continue to invest in DEIB during tough times are better positioned to emerge stronger when the financial climate improves. By focusing on internal talent development, leveraging strategic partnerships, utilizing technology, and maintaining an inclusive hiring process, companies can continue to uphold their commitment to diversity without breaking the bank.

Not sure where to start? We offer expert Embedded Recruiting Services, with targeted diversity hiring support to help you build and maintain a thriving diverse workforce. Get in touch to get started! 

You can learn more about leading through economic uncertainty in our expert blog post.