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Will Covid-19 layoffs buckle advertising's diversity and inclusion efforts?

Coronavirus is exacerbating societal inequalities, says the UN.

As agencies scramble to save on costs, furloughs, paycuts and layoffs have the potential to disrupt a decade's worth of progress with regards to diversity. Inclusivity advocates are now calling on leaders to keep diversity of thought top of mind when it comes to choosing who leaves a business.

There are a few indisputable truths about coronavirus: it rips apart families, it sticks pins in global economies, it spreads at alarming speeds. Then there are the disputable ones, such as the idea that it does not discriminate, an assertion that, despite the infections of a future king and Hollywood’s most beloved actor, has proven to be untrue.

The worst off in society are also the worst off during a pandemic. The UN has warned that coronavirus will exacerbate inequalities for women. Data from the US Department of Labor showed unemployment is rising fastest for women and people of color. The Pew Research Center found American Latinos have been the hardest hit by pay cuts so far.

Anti-Asian racism has followed the virus around the world. It is debilitating African Americans at a disproportionate rate. And in the US, it is these communities – as well as the Hispanic population – that are most likely to stand on the front lines as delivery drivers, caregivers, warehouse packers and grocery store workers.

These are the facts that Gilbert Dávila lays on the table when we speak. The co-founder of the ANA’s Alliance for Inclusive and Multicultural Marketing and co-president of Dávila Multicultural Insights purposefully paints a sweeping macro picture of diversity and inclusion before filling in the details of advertising business

It’s a sector that’s currently holding its breath. Q1 2020 may not have been atrocious but it wasn’t pretty either; besides, the holding companies’ financials were overshadowed by internal announcements and external leaks regarding layoffs, furloughs and more. Almost every single business in advertising has promised to halt extraneous spending, and freeze hires and pay rises.

Does this mean an end to the raft of inclusivity initiatives? And with execs from minority backgrounds for the most part occupying mid-level and junior positions, is the industry at risk of unconsciously gutting the most diverse part of its workforce as tenure protects the old guard from the worst?

Potentially. Ali Hanan, the founder of Creative Equals in the UK, points to the swathe of working mothers currently on furlough. In some cases, this has been a personal choice for these execs – particularly for single parents faced with the impossible task of homeschooling while carrying out a full-time job.

“However, there is the sense that teams will become accustomed to running 'lean' with fewer staff, which means – when furlough ends at the end of June and the true cost of an impending recession starts to hit – we believe these women will be first in line for the next wave of redundancies,” she says. Hanan has also heard tales of apprentice-level programs designed to bring in junior black, Asian and minority ethnic (BAME) and multicultural talent being dismantled.

'Unlike other recessions'

In the US, those who work to promote D&I are, on the whole, realistically hopeful that advertising will not go backwards with regards to its makeup. Firstly, diversity programs such as MAIP seem to be doing a good job at shifting temporarily online, while in-house D&I guardians such as TBWA’s Doug Melville are figuring out ways to bring their work to life through Zoom et al. Dávila hasn’t “heard of one head of diversity losing their job – they're all in play”.

Meanwhile, the sheer absurdity of the situation and the speed at which it hit consumer spend has meant all stakeholders have been affected in the same way at the same time. Day-to-day performance is not to blame, and furloughs are being used as a cost-saving measure more frequently than layoffs.

“Unlike other sort of downturns or recessions, the industry is very much thinking about how it protects employees first,” says Simon Fenwick, executive vice-president of talent, equity and inclusion at the 4A’s. “Because agencies went into this financially secure, they're expecting to come out of it and know that spending is going to bounce back really quickly. The unknowingness around how long it’s going to take is driving the desire to keep people employed and furlough people or reduce wages rather than just lay people off.”

Fenwick believes layoffs have not been a case of “taking a knife” to junior staff in the way companies may have done in the past; the departure of BBDO New York’s Greg Hahn was warning that senior award-winners are not safe. In this situation, there is no cut-and-paste policy regarding who stays and who goes.

“I've talked to agency executives that have been able to protect their creative headcount but have had to cut almost all their media because media dollars have walked out the door and there's no way to justify that staff,” says Belinda Smith, global diversity ambassador at the World Federation of Advertisers.

"I heard yesterday from a small agency in New York that did cut all their junior people, just because they thought they needed the tenure of their more senior. I've heard it going account by account. I’ve heard of accounts getting chopped up. So, at least from what I've heard, it's been pretty different, agency to agency.”

Guidance for protection

But with no systematic response, there is no systematic protection for minorities and women. Discussion of anything that amounts to affirmative action is off the table (“People run for the hills when you mention quotas,” says Dávila) so what’s left is guidance. Fenwick’s advice, for instance, is to look at your layoffs through the lens of your staff base.

“If 10% of your employee base is [made up of] people of color, then your layoffs should only make up 10% people of color,” he says, adding that the makeup of furloughs should be considered too, given that those not working will lose a share of voice for the immediate future.

Indeed, the UK’s furlough system is a real point of concern for Hanan: the government will only cover the costs of those earning less than £38,000 ($47,300) a year “so any BAME/multicultural redundancies at this mid-level will mean the pipeline to leadership could be set back for years to come".

The WFA, meanwhile, has released a guide – ‘A Marketer's Approach to Diversity and Inclusion’. It was written by before the pandemic began, but Smith believes the practical advice featured is needed now more than ever. As a client-side marketer, her message to the industry is clear: “If you keep your most tenured people who have no new ideas ... you're going to kill yourself”. But she’s also considered the less obvious repercussions of firing those who think differently to the old guard.

The trouble with culture fit

Unlike the last recession, creative talent doesn’t need an agency to build a portfolio anymore: it has TikTok, Twitter, the web and – of course – the creative labs of tech companies willing to pay better salaries. Those who choose to turn their backs on the agency model are the most direct threats to a creative business.

“What happens in a recession is people cut their employees and use contractors instead,” says Smith. “So, let's say you cut all of your diverse talent – all of those people are free agents whose rates are going to be cheaper than your shop anyway, and they know the client because maybe they were on the account at some point.

"You're creating a side market of contractors who can outperform your own business.”

The irony is the people who think differently – a group invisible to quotas and HR forms – are most likely to be laid off at this time. This is not strictly matter of ethnicity, gender or sexual preference, although all those things are tied up in it. It’s about who doesn’t want to drink at the bar on a Friday night, who doesn’t laugh at the boss’s jokes and who isn’t seen as a team player because they can’t make it to the holiday party.

“The mid-level has been historically overworked, underpaid and unfortunately seen as the most expendable,” explains Shameka Brown, the chief executive and executive coach at The Only One There, who notes the pandemic has had a “tremendously negative impact” on her clients of color, women and members of the LGBTQ+ community.

“Whose names are more likely to land on that shortlist? Often, it’s those who haven’t developed interpersonal relationships in the office or lack meaningful professional connections. And in majority environments, the non-majority is typically on the fringe. It’s a very sad reality, but it isn’t a surprising one.”

Choosing who to lay off or furlough when no-one is at fault is an impossible and unenviable task. But alongside protecting and improving the ratio of minority and female execs in the industry, leaders should be encouraged to maintain diversity of thought, too. Protecting a business in this way happily leads to the protection of invisible minorities, such as those with hidden disabilities, care responsibilities at home or neurodiversity.

“It's tough,” says Smith, “and there's not a one-size-fits-all answer on how to combat that tendency towards ‘culture fit’. But if you revert to your old playbook, your old talent bench or your old leaders like you might as well just close up shop.”

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