Chicago United Survey Shows Impact of Recent Recession on Diversity and Inclusion
2010 Corporate Diversity Profile includes Historical Analysis by Federal Reserve Bank
Unrelenting Disparities in Unemployment Result in Call for Diversity Efforts Tied to Business Objectives
CHICAGO, Nov. 16, 2010 /PRNewswire/ -- The recent recession has dealt a blow to efforts to diversify Chicago's corporate ranks as the pipeline of executives of color has been thinned by layoffs, according to Chicago United's latest Corporate Diversity Profile.
The Profile is a bi-annual survey that measures racial diversity specifically in the leadership ranks of Chicago-area corporations, on corporate boards and in executive level management.
According to the Profile's survey data of Chicago corporations, comparing 2007 to 2009, there was no change in representation of people of color at the corporate director level, a slight increase at the CEO level, and a slight decrease at the senior vice president level. Consistent with EEOC data, there has been some improvement in representation at the vice president, director and senior manager levels for Hispanics and Asians. Additionally, there was a downward trend in the ranks of senior management, reducing total numbers in the most senior positions and increasing the workforce numbers in more managerial positions. This trend is consistent with what Americans across the country are doing--accepting lower wages and reduced title recognition to keep their jobs or secure employment.
For its 2010 Profile, Chicago United partnered with the Federal Reserve Bank of Chicago to examine the differential impact of the economic recession on racial groups. By juxtaposing past recessions against the 2007/2009 recession, Chicago United and the Federal Reserve Bank validated that there is a disproportionately negative impact of recessions on the minority workforce. Prior to the economic downturn, there appeared to have been some progress in employment opportunity and the hiring of diverse candidates. However, many of the economic gains minorities made in the previous economic expansion were erased during the current downturn.
"The Corporate Diversity Profile allows us to ask hard questions and adjust our advocacy," said Gloria Castillo, Chicago United's president. "The outcome of the recession analysis indicates that historical trends repeat themselves despite corporate diversity and inclusion efforts. This makes it clear that it is imperative for many corporations to make better investments in all of their human capital by moving from mere programmatic diversity and inclusion strategies to those tied to business objectives with long-term sustainability."
The Profile also notes that the commitment to diversity and inclusion is a core strength of Chicago's leading corporations and it has been exhibited through these difficult economic times. Although there has been a slight gain in the Chairman/CEO office, Chicago's most progressive corporations have named diverse professionals to key roles in both national and global operations.
Other key findings of the Profile include:
- The employment gap remains consistent, recession or no recession. African-Americans are twice as likely to be unemployed as whites, irrespective of education levels. This shows evidence of the need for greater focus on more inclusive, culturally competent organizations to take full advantage of all human capital.
- Despite a renewed focus on governance and increasing evidence that the highest performing corporations are those with diverse boards, virtually no progress is reported in board diversity. The strengthened regulatory environment, requiring transparency of diversity policies related to board nominees has not yet taken effect.
- The recession analysis highlighted the ebbs and flow of minority hiring and retention. Increased employment opportunities for minorities during economic expansion are followed by steep job losses during contractions as indicated by the foregone employment statistics. This is an opportunity for corporations to better evaluate and retain talent across demographics.
The sixth edition of the Profile is based on responses from 19 of the largest public corporations in Chicago, as determined by Crain's Chicago Business 2009. Like the 2008 Profile, the latest survey provides a measure of companies' intent to advance diversity and inclusion strategies and the impact of diversity and inclusion as it relates to retention policies.
The Profile's unprecedented examination of the impact of recession on minority communities indicates that the 2007/2009 recession has spanned every sector of the economy. Therefore, it provides the best analysis of the current standing of diversity and inclusion in the nation across all sectors, said Maude Toussaint-Comeau, Senior Business Economist at the Federal Reserve Bank of Chicago.
"Job development and training programs must address the unrelenting disparities in unemployment that economic downturns have on communities of color," Castillo said. "Chicago United's Chief Diversity Officer Roundtables offer participating companies the opportunity to be at the forefront of strategy development to help increase competitiveness and deal with the socio-economic issues that thwart it."
"From the Roundtables, we know that when diversity and inclusion are part of the corporation's DNA, we don't see the same gaps as we see in national numbers," she added. "Chicago has a number of best-in-class companies for diversity an inclusion, and I thank them for their participation in the Profile."
About Chicago United
Chicago United is an advocacy organization made up of racially diverse CEOs and executive level management who increase economic opportunity for all races by promoting multiracial leadership development in corporate governance, the leadership pipeline and business partnerships. Through a fierce brand of constructive conversation, Chicago United fosters inclusion and provides an opportunity for senior executives from all racial and ethnic groups to learn from one another, confront and break down racial barriers and achieve shared objectives. For more information please visit www.chicago-united.org.
SOURCE Chicago United