Nearly one in four Australian companies have said they might look to lay off employees in coming months, as rising costs and low consumer spending take hold of the economy.
That’s according to a recent survey from Business NSW, that included responses from big business all the way through to sole traders. Together, the respondents employ nearly 80,000 workers.
This lowering of business confidence is occurring Australia-wide, and points to uncertain, and perhaps tougher economic conditions ahead. The latest figures from the Australian Bureau of Statistics show slowing economic growth and weak household consumption as the highest interest rates in a decade have stalled demand.
With concerns of a recession now on the horizon, businesses and employers will look for ways to cut their costs. It also makes it all the more important that employers are getting bang for their buck when it comes to the diversity, equity, and inclusion (DEI) policies they may have in place.
Below, we’ve outlined five non-negotiable DEI policies for employers that will help their business flourish in a slowing economy.
Paid parental leave
When it comes to DEI policies, delivering paid parental leave to employees is a key action that has a proven, positive flow on effect for organisations.
Employer-funded parental leave ensures new parents are supported as they embark upon one of the most challenging times in their lives and careers. It can lead to reduced staff turnover, which in turn leads to fewer recruitment and training costs for businesses.
In uncertain economic times, retaining your best talent can help ensure businesses keep their productivity high and employees satisfied. A top-tier paid parental leave policy can also be a key way for organisations to show they are leading with a “people-first” attitude.
Best practice paid parental leave policies from employers in Australia have removed ‘‘primary’ and ‘secondary’ carer labels to encourage both mothers and fathers to take up the leave. In the OECD, the average length of leave offered is 53 weeks, while countries like Iceland, Norway and Finland offer paid parental leave at around 80 per cent of a parent’s normal wage.
Meanwhile, supporting new parents with paid parental leave has considerable advantages – not just for businesses, but for the entire economy. As noted by KPMG in a major report on paid parental leave in 2021, equal parenting models in families can give rise to a higher standard of living, and benefits for businesses, with increased productivity and workforce participation. It can also help reduce gender pay and superannuation gaps, and help mothers stay connected to the workforce.
Sponsorship
Another DEI policy that has innumerable positive benefits for businesses and provides a significant return on investment, are sponsorship programs that link senior leaders with emerging leaders within an organisation.
As we’ve noted on Women’s Agenda previously, sponsorship can be a key way to dismantle systemic and behavioural barriers that hold women back in workplaces. This has never been more important as Australia’s economic growth slows.
Katriina Tähkä, Managing Director at Cultivate Sponsorship, knows the benefits of sponsorship first-hand and says now is not the time to back off on career development, even amid tougher economic conditions.
“Uncertain economic times can lead employees to also feel uncertain about job security and career progression at their current employer unless there are signs to the contrary,” Tähkä told Women’s Agenda.
“If people do not believe that their company and leaders genuinely care about their continued development or they feel overlooked and isolated it can lead to people changing jobs. Now is not the time to back off on career development; but to ensure that your most valuable resource, your people, know that they are valued.”
Tähkä says that sponsorship programs ensure that leaders have the skills they need to be effective sponsors, and that investing in emerging leaders is necessary if they are to be part of an organisation’s financial success.
“Having a sponsor in your corner gives you a senior person in your company who understands your aspirations and is looking out for ways to keep you on the radar for opportunities,’ she said.
“That connection will keep employees engaged even through the most challenging economic conditions. Engaged employees are more productive and will be key to helping any organisation to weather uncertainty. Leading with a people-first culture will always pay off in the long term.”
Flexible work practices
On top of paid parental leave and sponsorship programs, continuing to offer employees flexible work options is critical in this uncertain economic period. According to the Workplace Gender Equality Agency (WGEA), flexible work options are one of the key ways employers can ensure they are being responsive to their employees’ needs. As WGEA highlights, attracting and retaining diverse talent is critical to future-proofing businesses – all the more important if employers are looking at strategies to thrive in a shrinking economy.
Whether it’s offering remote or hybrid work practices, flexible hours for working parents, or allowing some roles to shift to job-sharing arrangements – there are many ways that flexible work arrangements can fit into a business.
With flexible work policies comes diverse talent, as well as more diverse leadership teams. And, as a growing body of evidence has made clear, there is a clear business case for more diverse leadership teams. They perform better, deliver greater profits, and achieve higher ESG outcomes.
Data collection
Collecting data on your company’s DEI policies is also critical to ensuring you are getting the most out of the strategies that are in place. In an adverse economic climate, getting the most out of DEI practices can be a real benefit to any business. Moreover, tracking the outcomes and success of policies with clear metrics is critical to ensure there is accountability at the leadership level.
Also, having transparency around the goals of a company’s DEI strategy will mean employees are more confident in their workplace’s commitment to better outcomes. It can also help to educate and inspire employees, a key part of talent retention.
Cultivate Sponsorship provides its clients with an Impact Report at the end of each program, which provides a workplace with a comprehensive overview of employees’ sentiments on their career progression and DEI policies. It’s another transparency measure that can help an organisation decide if they need to make incremental changes to better its DEI outcomes.
A commitment to preventing harassment, discrimination, and bullying
One in three workers in Australia have experienced sexual harassment in their workplace over the last five years, according to a national survey undertaken in late 2022. Meanwhile, just half of employees say their employers have provided information on how to report an incident.
With a slate of changes following former Sex Discrimination Commissioner Kate Jenkins’ Respect@Work report in 2020, there a number of new requirements for employers to take note of. Importantly, it is now incumbent upon businesses to prevent sexual harassment from occuring in their workplace, after legislation passed through federal parliament last year creating a “positive duty” for employers. The [email protected] website provides information and resources for employers to help create respectful workplaces, free from harassment.
Preventing your employees from suffering from discrimination and bullying is just as vital to ensure workplaces are safe for everyone. As the economy slows, ensuring workplaces are safe is key to enabling employee productivity and wellbeing – both are essential for the financial success and resilience of a business.
Ensuring your policies on harassment, discrimination, and bullying are up to date and implemented fully is non-negotiable in this economic climate. But most importantly leaders need to ‘walk the talk’. They need to be visible role models of the behaviours expected in the organisation even through the most challenging of times. Adversity can’t be an excuse for loosening the standards of respect expected of everyone.
Leaders who are active sponsors of others will understand firsthand the barriers and challenges that others face and commit to overcoming them. Seeing your own company through another person’s eyes and lived experience is a powerful way to teach empathy and understanding, crucial for the decision makers to understand the potential multigenerational impact of the decisions they make now. If you take flexible work and paid parental leave off the table now and overlook inappropriate behaviour how will this impact the people in your organisation?
Although DEI is often first on the hit list of cost cutting; chances are that you will be cutting more than just the budget.
Learn more about Cultivate Sponsorship here.