Companies Considering Layoffs Face Tradeoff Between Diversity and Experience
Headlines announcing impending layoffs and furloughs abound as the economy declines due to the spread of the COVID-19 virus and a downturn in the oil and gas sector. Depending on the demographics of their employees, some firms may be particularly susceptible to risk of adverse impact in layoff and furlough decisions. Firms prioritizing retention of more experienced employees, whether due to the employees’ greater accumulation of firm-specific human capital or the firm’s organizational culture, may face risk of apparent adverse impact among the firm’s race-ethnic and gender diverse employees.
In this article, published in Law360, Edgeworth Partners Dr. Stephen G. Bronars, Dr. Deborah K. Foster, and Dr. Nathan D. Woods examine Current Population Survey (CPS) data for employees and compare the share of race-ethnic minorities or women employees between Recently Hired and Experienced groups to provide insights into which sectors of the economy may be more prone to risk.