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Freshfields Sustainability

| 8 minutes read

Business as unusual: Will the pandemic lead to a lost generation of diverse talent?

At a recent news conference, Chicago Mayor Lori Lightfoot said, ‘The numbers take your breath away. This is a call to action.’

It is now widely known that the coronavirus has disproportionately struck black and ethnic communities at alarming rates.

As reported in the Associated Press, 33% of all Covid-19 related deaths in the US have been African American, while they make up just 14% of the population. The BBC reported similar statistics in the UK with 35% of Covid-19 intensive care cases being non-white, although they make up only 14% of the population of England and Wales. The lopsided impact is even more striking when you look at cities with large minority populations, such as Chicago, where black people comprise 70% of the deaths and less than 30% of the population.

We believe business has a critical role to play in Mayor Lightfoot’s call to action.

Companies have seen the potential to access new customers and innovative thinking by diversifying their workforces and investing in local communities. McKinsey found that in 2017, companies in the top quartile of racial and ethnic leadership had a 33% likelihood of outperforming their peers on EBIT margin. However, as the economic fallout widens, these slow but steady gains could be erased.

In this blog, we examine the structural impediments that led to the disparate impact of the coronavirus on black and ethnic minorities and how business should reimagine their approach to diversity and inclusion through novel approaches to remote working, supply chains and community investment.

We focus on the US and UK as case studies although note there are similar examples of disparate impacts on minority communities in other parts of the world. (See BBC Coronavirus: Why some racial groups are more vulnerable).

Race and Class

Perhaps the one conversation in the US that is even more taboo than race is ‘class’. There is a stubborn belief that Americans can move seamlessly through economic class structures and not be limited by their status at birth. Conversations in the UK tend to be more open as to whether economic prospects can be too pre-determined by circumstances such as parental occupation or income.

However, in both countries issues of race and class are inextricably linked. The Covid-19 crisis throws into sharp relief how race, ethnicity and lack of social mobility can affect one’s health and economic survival. We touch on broader social mobility issues but, given the early data on the disparate impact of the pandemic on minority communities, we primarily focus on the intersection of race, ethnicity and class. Understanding the factors and inequalities relevant in this group, including income inequality and health, occupational and housing differences, can help determine the broader socio-economic response.

The four class structure proposed by the economist Robert Reich for the pandemic offer a helpful lens to explore the intersection of race and class: the Remotes, the Essentials, the Unpaid and the Forgotten.

The Remotes: This group is comprised of the professional, managerial and technical workers who are “putting in long hours at their laptops, Zooming into conferences”. They are an estimated 35% of the work force and receive about the same pay as before the crisis. Black and ethnic minorities have long been underrepresented in this group – as a whole and particularly in leadership positions.

The Essentials: These are the “nurses, home care and childcare workers, farm workers, food processors, truck drivers, warehouse and transit workers, drugstore employees, sanitation workers, police officers, firefighters and the military.” They comprise about 30% of the workforce and a disproportionate percentage of black and ethnic minorities who are also more vulnerable to health and financial strains. For example, black and ethnic minorities suffer in greater numbers from hypertension and asthma, which are known to exacerbate the chances of contracting the coronavirus. Tragically, the first 10 doctors to have died from Covid-19 in the UK were black and ethnic minorities.

The Unpaid: This group includes the unemployed (possibly heading toward 25% in the United States and 10% in the UK) but also those workers who are furloughed and using up their paid leave. Similar to the Essentials, black and ethnic minorities are overrepresented in this category with black US householders being twice as likely to be food insecure. US black owned businesses will also be hit hard since 40% of their revenues is located in the five most vulnerable sectors, including leisure, hospitality and retail.

The Forgotten: This group includes all those people hidden from view during the pandemic in ‘prisons, jails for undocumented immigrants, camps for migrant workers, Native American reservations, homeless shelters and nursing homes.’ These places do not offer a social distancing option and, not surprisingly, have become hotspots for the virus. Four of the 10 largest known sources for infection in the US have been correctional facilities, which are well-known to be over-represented by ethnic minorities in both the US and the UK. Similarly, the homeless and rough-sleeping populations in the in the US and UK include a disproportionate percentage black and ethnic minorities.

What can business do?

To meet the challenges and disparities of the pandemic, businesses will need to re-imagine their approach to diversity with concrete actions. The most adept among them will reap the well-documented rewards that a diverse workforce provides in innovative thinking, access to new markets and expanded supply chains – all essential to successfully re-emerging from this crisis. 

Inclusive leadership. Leaders must ramp up, not lose, their commitment to diversity and inclusion, ensuring that diverse voices are around virtual key decision-making tables, carefully reviewing and monitoring employees earmarked for furlough and the alternative roles that safeguard employment. Given that many black and ethnic minority workers will not have the same financial cushion, or may be sharing households with Unpaids, access to employee hardship funds should also be monitored, with clear signposts to additional government support where appropriate. (See report by Business in the Community, ‘Business must not let race equality gap widen during Covid 19 crisis‘).

At times of crisis, anxiety or biases, instinctive mechanisms of self-preservation, can be amplified. This could further exacerbate inequities or the exclusion of minorities. During the crisis, business teams must fight even harder against these unconscious biases that could favour established networks and traditional solutions.

Leaders should see working remotely as an opportunity to be even more intentional in seeking out colleagues outside of ‘go-to circles’. Systems should be in place to ensure that all individuals, particularly those from vulnerable groups, feel comfortable and supported (e.g. extra 1:1 meetings, remote working groups, informal virtual meetings, etc), with close consideration given to those who may feel excluded, missed by the networks in place, or who would benefit from some additional support. Technology is great to stay connected but requires individuals to decide whether to share insights into their life, or, literally, to blur their backgrounds. Some Remotes will not have the ideal set-up, facing the challenge of home working in shared space with frequent interruptions.

These wider conversations may also lead to better business outcomes by proactively connecting with black and ethnic minority employee networks, the source of potentially valuable insights and creative solutions.

Reimagining recruitment and outreach. Challenges which already existed for disadvantaged groups prior to the pandemic are compounded by the ladder of education opportunity possibly being pulled away for their children.

In the UK, the Education Endowment Foundation fears that the social mobility progress/attainment gap at primary school age may be reversed by 10 years, based on the current trajectory of the impact of Covid-19. Those from the most underprivileged backgrounds and schools are not getting access to the opportunities of those from more affluent backgrounds, and there is a digital divide, with gaps in capacity of teachers and parents, and a lack of computers. Poverty, food insecurity and stress of financial worries impact attainment and lockdown has left some students without the campus-based strategies they had to counter technology challenges. Black parents may also be less able to provide support because of a higher proportion of single parent households and parents employed as Essentials, raising the real risk that their children will fall behind. (See New York TimesAs school moves online, many students stay logged out’)

It is therefore even more critical that businesses connect with those that are hard to reach, to attract and work with them in their internships or outreach programmes. A digital offering may help businesses do and reach more during lockdown, but may also be unachievable for students where financial, health and caring consequences are the only priority. Doors should remain open for this generation, when restrictions ease, to have the enriching experience of visiting workplaces.

Pre-corona virus, in their recruitment efforts some companies have ‘contextualised’ to identify students who have achieved well despite lack of educational advantage. Now, in the crisis, school closures have added to the disparity in access to learning, and key exam results in England and Wales are being finalised based on ‘predicted grades’ and teacher assessments. The Runnymede Trust expressed in an open letter concerns this may disadvantage those from lower socio-economic backgrounds. ‘Teachers expectations of black students and their working class peers tend to be systematically lower than warranted by their performance in class,’ according to Professor David Gillborn and others. ‘Double-contextualisation’ will be required, and for the long-term, as students in the school system now will only reach recruitment stages in years to come.

Targeted grants and recruitment initiatives by companies could be an important source of support in ensuring a pipeline for future talent from black and ethnic minority backgrounds, such as supporting Historically Black Universities (HBCUs) which are under even greater financial strain during the crisis.

Supply chains/business partners. As discussed, many black and minority businesses are in vulnerable business sectors. The immediate business priority may be to work with suppliers in a Covid-19 responsible way, but conversations that hold suppliers to quantifiable standards for diverse representation and social impact can also be opened up. Specific goals should be set to increase the number of minority-owned suppliers and business partners. In a world that is moving further toward virtual interactions, operations can be relocated to, and connections can now be built with minority businesses in, ‘cold-spot’ locations that had been isolated because they lay outside urban hubs or lacked financial resources for marketing and air travel. [See prior blog on mobile working]

Collaboration/Community Investment. The issues facing the Unpaids and Forgottens during this crisis are especially daunting. Businesses must continue to invest in their communities, whether it is through matched-giving, delivery of pro bono advice, food to the needy or the hiring of former offenders. Given the magnitude of the issues, collaborations will also be needed with governments, NGOs and think-tanks. As we have seen during the crisis, businesses can form novel partnerships at the local, state and national levels to expedite medical equipment, goods and services. These partnerships should continue after the crisis to address the underlying structural issues of access to housing, high quality health care and job training disproportionately affecting black, ethnic minority and other underserved communities.

By taking these types of actions, businesses have a real opportunity in the Covid moment to both accelerate their diversity ambitions and emergence from the crisis, as well as to contribute to the lasting changes needed to ensure a more equitable weathering of the next storm.

“Business should reimagine their approach to diversity and inclusion through novel approaches to remote working, supply chains and community investment.”


coronavirus, diversity, inclusion, inclusive leadership, supply chain, sustainability