Small and medium businesses have always had a strong reputation of treating their employees like people rather than numbers. But the explosion of DEI as a set of values, a profession, and an industry in recent years has changed the conversation. If you were to ask someone on the street which companies they know of that are progressive and forward-thinking, they might bring up Patagonia because of their environmental efforts or P&G’s commercials about trans inclusion. It would seem that workplace equity and inclusion are large-scale initiatives that only mega-employers can afford to dedicate time, budget, and resources to.

At Ellequate, we have first-hand evidence that just the opposite is true. Working closely with SMB leaders on targeted workplace policy changes has given us a unique vantage point on what they can really accomplish.

So here’s the big question we’d like to address:

Can small and medium businesses keep up with big corporations when it comes to DEI?

The simple answer is that SMBs have everything it takes to build inclusive, equitable environments that blow big businesses out of the water. But trying to compare corporate DEI initiatives with the ways SMBs do this work is like comparing apples and oranges and can significantly compromise an SMB’s ability to deliver effective and meaningful DEI outcomes. 

The conversation about corporate social responsibility in general put SMBs at a fundamental disadvantage. Larger employers have the resources to tell the stories they want and to control the narratives—to the point that it becomes a marketing tactic. For smaller businesses, doing right by their people is a strategy to keep the talent that they have. Instead of making things about perception, for SMBs, it’s about everyday experience—the real work required for actual systems change.

To answer this specific question, we’ll have to re-frame things a bit: when you strip away the jargon, what we’re really talking about is whether SMBs can create an environment where marginalized employees can thrive because they receive the support they need to perform at their best.

Bigger Doesn’t Mean Better

Larger employers have led the race when it comes to benefits, particularly things like caregiver leave, parental leave, and sabbaticals. Unfortunately, having a smaller team makes it a lot more expensive to provide these competitive benefits. But the narratives larger businesses create about “responsible” choices they’re making don’t always tell the full story and aren’t always aligned with the actions they take.

When big companies send “woke” messages in their advertising, that doesn’t mean their track record matches up. Pepsi’s ad with Kendall Jenner is a memorable example of hypocritical Black Lives Matter messaging, but there were others on the bandwagon: Target, Zoom, Nike, and Spotify among them. When Roe v. Wade was repealed, many of the companies that issued statements in support of women employees’ reproductive health gave significant amounts of money to Republican lawmakers who sponsored oppressive anti-abortion legislation: Eli Lilly, Comcast, Citigroup, AT&T, and Amazon to name just a few. The same thing happens with rainbow-washing companies that support anti-LGBTQ+ federal and state politicians.

As much as big companies may want to seem benevolent and responsible, serving their shareholders is always their number one priority. There’s still a huge lack of representation on executive boards and in the C-suite. Can you really say that big companies support all employees when they’re actively disenfranchising huge swaths of them behind their backs? Smaller businesses may not have dedicated DEI teams or access to expensive trainings and consultants, but they also don’t have the same pressures to please people in high places. 

A Crisis of Priorities

Because they literally have smaller teams, leaders in “Main Street” businesses and “Mom and Pop Shops” have more of a personal connection to the individuals that work with them. Every employee is important to the function of the team. But there's an interesting assumption that small and mid-sized businesses aren't doing the work because they don't have the budget. Yes, tackling bias and inequality within a national corporation will come with a big price tag. But the money isn’t what’s important: prioritizing equity is key, along with a big dedication of time and commitment to change. 

Again, comparing SMBs with Fortune 1000 companies doesn’t produce helpful insights. A small business owner could read any number of articles and think, okay, well that's the direction we should go. For instance, a SHRM study of Fortune 1000 companies suggests that positioning volunteer work on company time as an employee benefit “can help employees build new and strong relationships with co-workers.” But how do you know that's the right choice for a small team of less than 50 people? 

Limited time and resources are definitely challenges for small businesses prioritizing workplace equity, and being left out of these conversations makes it even more overwhelming for individual leaders. Now what could SMBs do if they had access to more accurate data on how their employees really feel and tailored, evidence-based recommendations on how to serve them better?

SMBs Do More With Data

The only way to know what approaches will work for individual employees is to get an understanding of their unique experiences. You need to get a comprehensive enough picture of what’s going on in your organization through a survey, policy assessment, listening session, or other mode of communication. Starting out with data-informed strategies can save untold amounts of money on trainings, programs, and feel-good DEI solutions that don’t deliver results.

We’ve seen it working in our community of SMBs pursuing workplace equity certification. They’re leading the way when it comes to caregiver leave, parental leave, flexible work arrangements, all the things that larger institutions tout. With an accurate gauge of employee sentiments and needs, SMBs can change a lot faster than big companies because they’re more nimble and flexible. Instead of treating DEI like a budget line item, small and medium businesses often maintain workplace equity as a long-term strategic priority. 

One of our Gold-certified employers, Greater Cincinnati Foundation, has fewer than 60 people on their staff. They were able to increase their paid family leave policy from 6 weeks for just moms to 16 weeks for all parents, including those who are adopting, fostering, or having children through surrogacy, as well as family leave for other situations. A thorough team survey told them that most departments don’t want to backfill for people on family leave anyway because it can be challenging and expensive to train their replacements. They also know that their small team only has 2 to 3 children per year on average. Spending $10k per year to retain talented, dedicated employees and spare themselves the headache of backfilling turned out to be pretty reasonable! 

What Else Can SMBs Do Now?

Our work with SMBs has uncovered a few places where they can make effective changes that are good for both the business and their employees. These two specific action items are basically free, and you can get started on them right now. Check out this post for more free ideas on creating justice and accountability.

Prioritize pay equity.
Pew Research Center survey found that low pay (63%) and lack of advancement opportunities (63%) were among the top reasons Americans quit their jobs last year. Pay transparency laws have also been introduced in several states. There are a lot of factors that go into pay equity and transparency, but all small and mid-size businesses can work on their compensation philosophy and pay equity. Watch this cohort alumni panel recording for the whole story of how GCF rewrote their compensation policy. They guarantee new hires compensation in the top 50% for their role!

Use inclusive language.
Another thing SMBs can prioritize is the use of inclusive language in their materials and written policies. The APA has published a free set of inclusive language guidelines that’s accessible to anyone.

It’s easy to underestimate how much of an impact language has on employee experience: we worked with a team that used an innocuous sports analogy in a performance review document developed by a paid HR consultant. It made a lot of assumptions about the employee reading it (that they watch sports, for one thing), and the overall sentiment came from a deficit approach, implying that there wasn’t much room for improvement. Once we began reviewing the document together through an equity lens, they realized the metaphor was problematic. Not only did they see the issue, they were quick to recognize its implications, make direct connections to quantitative and qualitative employee feedback, and adjust the language and performance review process accordingly.

The SMB Advantage: Targeted Action, Collective Impact

We’re happy to report that more and more small and mid-sized businesses are delivering on the promise of DEI—instead of using valuable resources to advertise their successes, they are investing in their people. Now here’s why we’re so optimistic about the future of workplace equity on Main Street. Our platform generates unique and targeted policy recommendations based on individual employee responses. But what we do with that information on the back end creates collective impact: we can start to see what’s really going to have the most meaningful impact for BIPOC employees or for LGBTQ+ employees across similar SMBs. As more SMBs pursue certification and upload survey and policy data, we’ll start to be able to see those bigger trends. We just haven't had the technology to be able to do it until now. 

At companies this small, every team’s needs are a little different, but we can work towards having better DEI best practices downmarket. 48 percent of U.S. employees work for small businesses: that’s a lot of people. Just imagine what the small business community will be able to do once they know what’s actually going to work. 

We’re thrilled to be able to provide SMBs with the same powerful data that corporations have access to with an annual Ellequate membership.

Want to get started now? Get in touch with us to learn more.

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