Articles // January 25,2023

Discrimination against women during layoffs can be a death knell for an organization in recession times

By Author - Meenakshi Girish, Editor - Chandrani Datta

Businesses often have a glass ceiling when it comes to how they treat their women, especially during times of duress. Suppose you are in the middle of a financial crisis or a recession, what would your criteria for laying off employees be? Will you encourage women in the workplace or remove them owing to their gender?

In times of economic hardship, companies may feel the pressure to cut costs and reduce their workforce. However, it is important to remember that layoffs should be based on job performance and skills, rather than gender diversity.

Unfortunately, research has shown that women are often disproportionately affected by layoffs and are more likely to be asked to leave than men. According to a study by the National Women’s Law Center, women are disproportionately affected by layoffs, with women being 1.8 times more likely to be laid off than men.

The impact of this bias

This type of discrimination not only harms the individual women who lose their jobs, but it also harms the company as a whole. It will hurt your stakeholder management process and result in a loss of customer trust.

By letting go of talented and hardworking employees based on their gender, the organization is losing valuable resources and skills that could help them recover and grow during the recession.

Furthermore, discrimination during layoffs sends a clear message to the remaining employees and the public that the company values some employees more than others based on their gender.

This can lead to a toxic work environment and a lack of trust and loyalty among employees. It can also damage the company’s reputation and make it harder to attract and retain top talent in the future.

Additionally, during a recession companies should focus on retaining their top talent and not discriminate against women during layoffs, as they are vital asset. According to a report by McKinsey, companies with more diverse leadership teams are more likely to financially outperform their peers.

The report also noted that companies with more gender diversity in their leadership teams had a 21% likelihood of outperforming on profitability. Companies need to take a close look at their processes and ensure that layoffs are being conducted fairly and without bias.

This means actively seeking out and addressing any unconscious bias that may be present in the process. It also means providing equal opportunities for all employees, regardless of gender, to develop their skills and advance their careers.

6 reasons why this is the wrong approach

We have already established that laying off women without any other reason isn’t justified. But here are some more reasons why this is not a good approach and how it can hurt your company.

1. It is morally wrong

Any kind of discrimination is morally and humanely wrong. Gender does not determine talent and employers should not make it a part of their key decisions during layoffs. Discriminating against women during layoffs is unjust and goes against basic human rights. All employees should be treated fairly and with respect, regardless of their gender.

Imagine a technology company, that specializes in providing cybersecurity solutions to other businesses, lays off a number of its female employees citing budget constraints during the recession. This not only violates the rights of these women but also undermines the company’s reputation as an equal opportunity employer.

2. It harms the company’s growth

By letting go of talented and hardworking employees based on their gender, the organization is losing valuable resources and skills that could help them recover and grow during the recession.

“I am part of a marketing agency that specializes in providing services to other businesses. I remember back during the recession in 2008, my company laid off a number of its female employees. I was one among them despite having worked with the company for eight years. This decision harms the agency’s growth as it loses the skills and experience of these women, which are crucial in a highly competitive market,” said a female employee from India.

3. It can lead to a lack of diversity in the leadership team

By disproportionately laying off female employees, companies risk having a leadership team that is not diverse. A lack of diversity in leadership can lead to a lack of representation and understanding of different perspectives and experiences. This can affect decision-making and the ability to gauge and serve a diverse customer base.

4. It undermines the company’s culture

Discriminating against women during layoffs sends a message to the remaining employees that diversity and inclusion are not valued by the company. This can lead to a toxic work environment and a lack of trust and loyalty among employees, making it difficult to foster a positive and productive corporate culture.

“I work at an agency that has four women and twelve men who work on coding. During financial situations, the manager always fires the women first. He believes that hacking, coding, gaming, and similar fields are more for men than women. It is not right to make work gendered and fire your best talent simply because of your bias,” said another female employee from India.

5. It can lead to legal issues

Discrimination in layoffs is illegal and can result in lawsuits and financial penalties for the company. For example, a company that lays off a higher proportion of female employees than male employees could be found to be in violation of anti-discrimination laws and face legal action.

6. It can impact the company’s ability to innovate

A diverse workforce brings different perspectives, experiences, and ideas to the table. By discriminating against women, companies lose out on the benefits of diversity. You need to rethink your stakeholder management process as your business’s approach to problem-solving, innovative ideas, and decision-making will change.

“It made us lose the trust of our customers. Women are more empathetic compared to men according to my judgment. Some of the women on our team had forged deep bonds with their clients who didn’t handle it well when the women left. They were very angry as they found it hard to connect with the male employees newly assigned to them,” said a female employee from India.

Way forward

Discrimination against women during layoffs is not only morally wrong, but it also harms the company and its ability to recover and grow during a recession. Companies should focus on retaining their top talent, including women, and ensure that layoffs are being conducted fairly and without bias.

This is the ideal way to ensure long-term success for the organization and all its employees. We mean both existing and future employees, as they will be affected by your treatment of women in the workplace.

It is a detrimental practice that can harm not only your company’s growth, reputation, and culture, but also its ability to innovate, customer trust, and diversity in leadership. By actively seeking out and addressing any unconscious biases, providing equal opportunities for all employees, and fostering a culture of fairness and inclusivity, employers can ensure that their company is well-positioned for long-term success.

Choosing the right path, will not only be fair but also beneficial for the company in the long run. Learn more about being an egalitarian leader and effectively recover from potential losses during recessions.

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