Three AHRI members explain how they would manage a redundancy situation that jeopardised their diversity, equity and inclusion efforts.
In part nine of HRM’s ethical dilemma series, where we ask AHRI members to respond to made-up ethical dilemmas, we explore how HR practitioners would respond if a company restructure was set to disproportionately impact marginalised employees.
The dilemma
You are the HR leader at a large company with regional offices across the country. The company is planning a restructure. However, data shows you that this would disproportionately affect diverse employee groups in smaller offices, potentially undoing progress towards your company’s diversity, equity and inclusion (DEI) targets.
Senior leadership is pushing for swift implementation to cut costs, but there are concerns that layoffs might disproportionately impact historically marginalised employees. Some internal diversity champions are urging for a different approach to minimise the damage to DEI efforts.
How do you balance the pressure to meet financial targets with your commitment to DEI while also ensuring that diversity remains a priority in the company’s strategic plans?
Tobi Aluko CPHR, HR Business Partner Emerging Brands, Cotton On Group
Balancing financial targets with DEI commitments during a restructuring exercise is indeed challenging. Prioritising cost savings at the expense of DEI can undermine efforts to build an inclusive environment and negatively impact the organisation’s EVP.
To address this, I would begin by leveraging data to make informed decisions. This involves understanding the impact on marginalised employees and exploring potential solutions. Along with the data analysis, I would review the selection criteria to ensure they are unbiased, fair and aligned with current and future organisational strategies. Consulting diversity champions is essential, as their insights can support the exploration of potential solutions and ensure that the process is inclusive.
Additionally, I would explore alternative cost-saving measures such as offering voluntary redundancies, implementing a recruitment or promotion freeze, and freezing salary increments to minimise the impact on marginalised groups.
My goal would be to provide a report to senior leaders that focuses on reducing the percentage of impacted marginalised employees, highlights a fair and transparent process and the alternatives, and emphasises the organisation’s DEI achievements.
This report would also outline the risks of reversing progress, thereby supporting leaders in making informed decisions.
Zeke Farrell CPHR, People Advisory Leader and LGBTQA+ Committee Co-chair, EnergyAustralia
Addressing concerns during restructuring about the regression of DEI metrics can be a delicate conversation, especially when the driver is financial. You must ensure that everyone understands the ‘why’ for the change, and approach this with transparency, especially when people could be impacted within regional locations.
The organisational and HR strategy will be a pivotal artefact when making decisions on what capability is required for the future structure – DEI should be a priority for the organisation and should be explicitly called out here. This will also support any process that you undertake and could form part of the criteria required when identifying impacted individuals.
Sometimes regional locations can mean there is a higher proportion of people from diverse backgrounds, and this can result in greater innovation and creativity throughout the organisation. While this doesn’t mean you can’t change the way a company is structured or organised, you should take this into consideration on how this will impact the future profits and competitiveness more broadly.
To ensure DEI remains central, conduct an impact assessment before any layoffs to identify and mitigate potential diversity setbacks. Consider forming a cross-functional advisory group, including DEI champions, to provide insights on proposed changes and to suggest alternatives.
Finally, regularly communicate progress with senior leaders to reinforce the long-term value of maintaining diverse perspectives.
AHRI members can access a free on-demand webinar outlining expert tips for managing a redundancy process by logging into their member portals.
Sanela Harris CPHR, Manager, HR Standards & Capability Delivery, AHRI
Balancing this pressure can be challenging, especially when financial objectives and DEI priorities appear to conflict.
To ensure that the restructure doesn’t disproportionately affect DEI progress, I would revisit the organisational design requirements – the ‘what’. What we need to do to achieve our strategy, what financial targets we must meet, what skills are required to do this work, and the skills necessary to support our DEI strategy.
Once this analysis is complete, I would re-examine job design, focusing on skills required rather than geographical restructures.
Following this, we can get closer to figuring out the ‘who’, in a way to minimise bias. To do this, I would seek external viewpoints on de-identified workforce designs incorporating diverse perspectives, ensuring rationale is clear and objective for any redundancy decisions.
To further minimise bias, I’d implement a structured decision-making framework for redundancies, focusing on skills alignment. Involving a third-party auditor in this process could also reinforce objectivity, making criteria transparent and equitable for all employees.
Additionally, I would propose alternative cost-saving structure models such as job sharing, varied employment types and flexible working arrangements to reduce the number of redundancies.
This article was first featured in the December/January 2025 edition of HRM Magazine. Click here to view the rest of the articles in this series.