5 Business Trends That Will Impact The Way Organizations Tackle Racism and Discrimination
The unfolding business landscape in 2024 will feel at times like a bun fight between political ideologies, with everyone vying for power and influence, often at the expense of those who are most marginalised in society.
For those of us committed to the cause of dismantling systemic racism, either publicly or privately, we are entering another era where we can no longer rely on moral outrage or appeal to empathy as fuel to sustain the momentum to adequately address the consequences of systemic racism and discrimination. Those who would deliberately seek to halt progress are wielding power, resources, and influence in strategic ways to undermine, discredit, and ultimately dismiss.
This year, we will see these issues deliberately wielded as tools to prop up political campaigns and persuade corporations to ruthlessly pursue profit without any concern over how their operations negatively impact people and the planet.
However, it doesn’t mean that we should give up the fight.
There are certainties that will continue to emerge within this complex landscape. Whilst the media, and bad faith actors will amplify stories that feed our despondency, organizations must navigate an intricate web of stakeholders with varied perspectives on systemic racism and discrimination. Some stakeholders will be more interested than others, some organizations will prefer to elevate the voices of some stakeholders over others, however it is not so easy to ignore or sideline tacking preventative measures to address the ways employees are marginalised and discriminated against due to their race and ethnicity.
Therefore, within in this context, we’ve taken a moment to reflect on the trends we foresee shaping the next 12 months. Some of these trends offer green shoots of opportunity, ripe for exploration (and, dare we say, exploitation) that negates emotion, by focusing on practical realities.
One can debate about the extent of influence these trends may have, however the crucial takeaway is that playing passive witness to these trends will come at a cost.
Regardless of your political stance, ideology, or personal beliefs, these trends warrant attention, especially for those committed to the longevity and relevance of their businesses.
Trend 1 - Politicisation of DEI
DEI has become a “dirty word”.
In recent times, Diversity, Equity, and Inclusion (DEI) efforts have become highly politicised. Recent developments have seen an increasing number of US states, influenced by a coalition of conservative activists and academics since 2022, imposing bans on DEI programs in public universities and therefore attempting to extend that to corporations.
Any activity deemed to promote racial diversity, is now seen as a threat against white people and is said to undermine the principles of what it means to live and work within a meritocratic society.
Companies have stoked this perception by over-indexing on tokenistic and performative gestures, preferring to prioritise visible symbols of change, rather than address the root causes of why there is still a lack of parity for racialised employees in comparison to their white counterparts.
Irrespective of whether one agrees or disagrees with this, right-wing attacks have made it increasingly difficult to rely solely on visible DEI initiatives that overtly target certain groups. These attacks are often masking deep anti-Black racism, with conservative individuals and groups trying desperately to halt any form of Black advancement.
The impact?
Companies, therefore, find themselves in a precarious position. They may choose to provide limited information about their efforts to combat systemic racism (and we’re being kind in assuming that their DEI efforts specifically tackle this), hoping to avoid controversy.
Or they can remain steadfast in commitments and pledges made post the murder of George Floyd in 2020 and opt for doubling down on continuing activity that is focused on prevention rather than cure and do a better job of tying objectives to business outcomes rather than diversity quotas and targets.
Companies who chose the option to “lie low” are not completely off the hook - we'll come to that later.
Trend 2 - Ongoing challenges in retaining and engaging Black talent
Despite corporate commitments after the murder of George Floyd, challenges persist in, meaningfully, retaining Black talent. Whilst many corporations were patting themselves on the back at being able to parade their latest senior hire on the front of their LinkedIn posts and marketing collateral, the experiences of many Black colleagues remain sub-optimal, at best.
Examining the typical metrics relating to engagement for example, still show that even though employees may not be as vocal as they once were in the immediate aftermath of May 2020, there are still deep-seated issues that are being glossed over, primarily because the issues do not directly impact the majority. The socio-political climate has further exacerbated these issues, turning race and identity into contentious subjects – with people’s lives being treated as political footballs.
The impact?
The spotlight is now firmly on companies to take preventative measures, rather than merely reacting to issues as they arise. Employees are becoming increasingly sceptical of generic claims of inclusivity in job ads and career websites therefore companies must demonstrate their commitment through tangible actions and results. They must show receipts to substantiate their claims.
Trend 3 - DEI roles reintegrating into core HR
Budget cuts and economic challenges, particularly in some industries, have prompted companies to reconsider their commitments to DEI. This reassessment, coupled with concerns over the politicisation of the role, may result in DEI roles being retracted or absorbed back into core HR functions.
The impact?
The potential loss of specialised focus on employee groups most impacted by racism, bias, and discrimination will be a cause for concern for those practitioners who have been granted the license to focus on this. The HR industry has not done a great job in leading conversations and good practice in tackling the systemic issues affecting racialised employees.
While streamlining DEI efforts within HR may offer short-term operational efficiencies, it also raises concerns about maintaining a dedicated focus on combating systemic issues. Organizations must find ways to balance these priorities, ensuring that HR departments, and Chief HR Officers, are equipped and capable to strategically lead and operationally execute initiatives that make a difference.
They will now be responsible for quantifying the return on investment.
Trend 4 - Stricter sustainability reporting requirements
Stricter sustainability disclosures and reporting are emerging to combat greenwashing (and social washing). Companies will now be held accountable, based on their past and present actions, rather than relying solely on future intentions. This trend addresses the concern that organizations have been allowed to engage in insincere and/or deceptive practices. Many recognise that consumers care about a brands sustainability practices, and therefore there is a financial incentive to over-exaggerate or make claims that are difficult to substantiate.
The impact?
Regulatory bodies are tightening their grip on companies, demanding substantive evidence that they are accounting for and mitigating the environmental, social, and economic impact of their operations.
Regulations like the Corporate Sustainability Reporting Directive (CSRD) under EU law are setting the stage for more comprehensive reporting. This will impact over 50,000 companies who satisfy two of three requirements:
net turnovers of over €40 million;
balance sheets greater than €20 million; or
more than 250 employees.
It will impact SMEs later down the line, but regardless, companies must be prepared to provide concrete evidence of their commitment to addressing sustainability issues.
Trend 5: Increased use of legal routes to address racism and discrimination
The persistent problem of racism and discrimination in workplaces is not going away just because organizations would rather pay people off or force them to leave.
Dissatisfied employees and even advocacy groups are increasingly turning to legal routes to address and highlight instances of racism and discrimination reflecting a dissatisfaction and mistrust with internal resolution mechanisms. More importantly, with the ability of social media to quickly amplify issues, what was an internal issue behind closed doors can quickly become a public relations nightmare and undermine the ability to tap into diversified talent pools.
The impact?
The rise in legal actions underscores that, you can’t get away with addressing systemic racism and discrimination is a one-off intervention or policy amendment. Failure to take meaningful action, risks legal and reputational consequences.
Those of us at the inner workings of large organizations, understand that, for some executive leaders can exceptionalise the cost of settlement agreements; deliberately wielding power, but protracting the legal process in the hope that the victim is tired, burnt out and worn down to accept an agreement. And for those organizations, this trend is going to be nothing more than a financial nuisance and something for their legal and HR teams to deal with.
For others however, it’s a reminder that the burden of proof is increasingly on the employer to ‘prove’ beyond the balance of probability that not only was the employee not discriminated against, but as a business, they can point to some of the preventative measures they take to ensure there is equality in treatment.
This connects nicely to trend number 4 – in that as there is an increased need to disclose more substantive action – those disclosures could potentially be used as ‘evidence’ in employee litigation cases.
2024 could be a year of “covering all bases” or more burying heads in the ground.
By navigating these trends with foresight and action, organizations can make meaningful progress towards a more inclusive and equitable future. However, as always, choice reigns supreme. We should be under no illusion that these trends will force substantive action, but I believe they will continue to make the topic of racism and discrimination a difficult one to ignore.
“Forewarned is forearmed”...and all that.
