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Why Businesses That Embrace Diversity Will Have An Edge In Tough Economic Times

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Why Businesses That Embrace Diversity Will Have An Edge In Tough Economic Times

As economists fret about a looming recession, business leaders who vowed to make diversity, equity and inclusion (DEI) a priority this year may be tempted to put those efforts on hold while they focus on business fundamentals.

But that would be a mistake because DEI isn’t just a feel-good initiative; it’s a significant contributor to business success, says Dr. Nika White, president and CEO of Nika White Consulting (www.nikawhite.com) and the author of Inclusion Uncomplicated: A Transformative Guide to Simplify DEI.

“A solid body of research spanning many years and industries shows that everything from bottom-line growth to talent retention has been a direct result of diversity and inclusion initiatives,” White says.

As one example, a 2020 study by McKinsey & Company concluded that diverse companies were more likely to outperform non-diverse companies on profitability. McKinsey found that to be true for both gender diversity and ethnic and cultural diversity.

Tough times don’t change that competitive edge for diverse businesses, White says. In fact, in a recession, companies that have embraced diversity might even widen their lead over competitors. The McKinsey study, which came out early in the COVID-19 pandemic, suggested that diverse and inclusive businesses are better poised for success during a crisis because they are “likely to make better, bolder decisions.”

“For example,” McKinsey’s report continued, “diverse teams have been shown to be more likely to radically innovate and anticipate shifts in consumer needs and consumption patterns – helping their companies to gain a competitive edge.”

Companies that embrace diversity also are better able to snag the best employees, White says.

“We’ve been hearing about the great resignation, but it’s really the great reevaluation,” she says. “The upper hand goes to the job seeker right now. They can pretty much pick their ticket and be even more demanding about their requirements.”

So how does that relate to businesses and their records on the diversity, equity and inclusion front?

“Young people are showing up to job interviews with a list of questions and high ranking on that list is, ‘What are you doing to help manifest a strong culture of inclusion, equity and belonging?’ ” White says. “For organizations that don’t have a satisfactory answer, talent is moving in a different direction.”

What’s more, customers, clients and other constituent groups expect organizations to deal equitably with diverse groups, she says.

“The younger generations that are growing up and making decisions about which organizations they want to support are increasingly prioritizing diversity,” White says. “Generation Z, for instance, is not only the most diverse age group in America, but also the most inclusive. They are less likely to label others and are more accepting of fluid identities, and they expect the same from others.”

Whether the economy is thriving or struggling, organizations need to be thinking of ways to position themselves to attract and retain underrepresented talent when compensation can’t be the only solution, White says.

“If they are not intentionally engaged in DEI, they’re going to be challenged more than ever,” she says. “That lack of intentionality will fail to create a culture and environment where there’s a strong sense of belonging, psychological safety, and belief that full success is in reach for all. That not only makes for an unattractive workplace, it’s also bad for business.”

About Dr. Nika White

Dr. Nika White, the author of Inclusion Uncomplicated: A Transformative Guide to Simplify DEI, is president and CEO of Nika White Consulting (www.nikawhite.com). Dr. White is an award-winning management and leadership consultant, keynote speaker, published author, and executive practitioner for DEI efforts in the areas of business, government, non-profit and education. Her work helping organizations break barriers and integrate DEI into their business frameworks led to her being recognized by Forbes as a Top 10 Diversity and Inclusion Trailblazer. The focus of Dr. White’s consulting work is to create professional spaces where people can collaborate through a lens of compassion, empathy, and understanding.

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5 Steps Business Owners Can Take to Manage Surging Inflation

The U.S. economy has been hit by one thing after another the past couple of years – COVID-19 and the resulting supply chain issues, a labor shortage, Russia’s invasion of Ukraine, and high inflation.

Small business owners are feeling the brunt of it, and many aren’t confident that economic conditions will improve any time soon. The Small Business Optimism Index was down 2.4 points in March, with inflation considered the owners’ biggest problem. But while many factors are out of their control, there are measures owners can take to combat negative economic factors affecting their business, including inflation, says Marc Scudillo, Managing Officer of EisnerAmper Wealth Management and Corporate Benefits (www.eisneramperwmcb.com).

“The responsibility and commitment to operating and growing a successful and fiscally sound business can be daunting – especially in these challenging times,” Scudillo says. “Inflation can have an impact on everything from materials, production, wages, and profitability to customer satisfaction.

“For many business owners today, inflation is a new experience. They need to be creative in their approach. Combating the effects of inflation can be difficult, but the good news is you have options you can take to protect your business and improve your bottom line.”

Scudillo offers these tips to help business owners manage inflation:

  • Cut some regular expenses. Scudillo says that with inflation surging, business owners aren’t being responsible unless they do a comprehensive review of every expense. “Consider the value each expense brings to your business,” he says. “Don’t cut costs essential to employee well-being or customer satisfaction. Eliminate things with minimal ROI, cancel subscriptions you barely use, and downsize your office space if necessary.”
  • Revisit your finances. This might be a good time to refinance debt on a business loan. Refinancing a variable interest rate to a fixed rate can limit the danger posed by adjustable rates rising in the future, Scudillo says. While credit cards should be used judiciously, cash-back credit cards and airline cards can be worthwhile for a business owner.  “If you’re going to use a credit card, use one that gives value back,” Scudillo says.
  • Review your business operations. High inflation has motivated many business owners to re-evaluate their business operations and think of ways to be more efficient, productive and cost-effective. Investing in business technology might make sense. “Review workflows and look to simplify processes,” Scudillo says. “Research software that can streamline customer relationship management, inventory and project management.”
  • Consider supply chain alternatives. Given the unpredictability and continued issues of supply chains, owners need to be proactive. “Research alternative suppliers, preferably in different locations,” Scudillo says. “You need the assurance of maintaining your stock even if a certain supplier can’t fulfill your needs. Buy as much as you can in one shipment so you won’t have to order as frequently and keep getting hit with price increases. And be transparent with your customers. Stay informed about possible disruptions and keep your customers informed.”
  • Raise prices judiciously. According to a survey by the National Federation of Independent Business, most business owners raised prices over the past year. While that approach isn’t ideal in terms of retaining and adding customers, Scudillo says you can avoid turning customers off by raising prices slowly and strategically. “Offer extra services, rewards, discounts, and strengthen customer service,” Scudillo says. “Focus on the differentiators in your marketing messages. Communicate with your customers honestly to strengthen the relationship. In your postings, tell them inflation is affecting all businesses and you’ve tried to keep the same prices as long as you could, but you’re adding value wherever possible and appreciate their business.”

“Inflation can be tough on small businesses,” Scudillo says, “but the right strategies and resources can help owners get through it and emerge even better and stronger.”

About Marc Scudillo

Marc Scudillo is the Managing Officer of EisnerAmper Wealth Management and Corporate Benefits LLC (www.eisneramperwmcb.com), which provides financial planning, investment and wealth preservation protection services to both individuals and corporations. Scudillo is a Certified Public Accountant and a Certified Financial Planner™ and Certified Business Exit Consultant®. He holds a Master’s of Business Administration in Finance and Accounting from NYU’s Stern School of Business; a Master of Science in Accounting from NYU’s Stern School of Business; and a Bachelor of Arts Degree in Economics from Colgate University.