How Small Businesses and Startups Can Manage Risk in a Post-Roe WorldThought Leadership
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On June 24th, the Supreme Court overturned Roe v. Wade, the ruling precedent that established the constitutional right to medical privacy, which included the right to abortion. How will this impact small businesses and startups post-Roe v. Wade? Since then, businesses across the United States have begun to adjust to the new post-Roe world with policy changes and announcements with the intention of protecting their employees and declaring their position on the ruling.
The economic consequences of the Supreme Court’s ruling on abortion for women and other members of the workforce who may become pregnant are wide-ranging and profound. All businesses nationwide are under pressure to navigate this new reality while trying to meet the expectations of their employees, customers, and investors.
Not all businesses, however, are equally equipped to respond to the legal and economic changes resulting from the ruling. While large tech companies such as Google and Apple have responded swiftly, many small businesses and startups post-Roe have found themselves in a more difficult position.
This article will discuss the response of startups and smaller companies to the Supreme Court’s overturning of Roe v. Wade as compared to larger corporations. We will take an in-depth look at the risks and challenges that small businesses and startups post-Roe face and discuss how to navigate this new legal and economic reality.
The Supreme Court’s 6-3 ruling to overturn Roe v. Wade means that millions of Americans will face immediate legal challenges when trying to terminate a pregnancy. As of this publication, Abortion is illegal in 13 states and severely limited in 26 states in total.
The court’s ruling comes into effect at a time when a clear majority of Americans express support for keeping at least some form of abortion access legal. A Washington Post-ABC poll from last November found that three-quarters of Americans agreed that decisions regarding termination of pregnancy should be left to women and their doctors, while only 20% believed that such a decision should be regulated by law. A recent study from Morning Consult found that employed adults in the US prefer to live in a state with legalized and accessible abortion by a 2:1 margin.
In another recent study by Perry Undem, 68% of top talent stated that it’s important for their company to take a stand on social issues. These studies indicate that American workers not only care about accessible reproductive healthcare, but also expect their employers to care and take action regarding the same. For states that have banned abortion, this could have severe economic costs, but the issue should concern companies and workers nationwide.
The decision to overturn Roe v. Wade comes after two difficult years for American women in the workforce. The pandemic saw a drastic decrease in the number of employed women, since remote schooling and caregiving duties fell disproportionately on women during this time. According to the Institute for Women’s Policy Research, there are still 2 million fewer women in the workforce than before the pandemic started. The decision to overturn Roe promises to have a continuing detrimental effect on women re-entering the workforce.
These social and economic factors are important for understanding the context in which companies have to make decisions about their responses to the overturning of Roe v. Wade. In a tight and competitive labor market, what employers say and do will have an enormous impact on their ability to attract and retain talent, especially female employees and pregnant individuals whose reproductive health is of paramount importance. That’s especially significant given that healthcare in the US is employer-sponsored, so the degree to which individuals can access reproductive healthcare will depend on their employers’ decisions.
Big Tech’s Response to the Supreme Court’s Decision
Across the tech sector, the response from many of the country’s largest companies to the Supreme Court’s decision has been immediate and swift. Many companies, including Facebook and Microsoft, quickly changed their HR policies in light of the decision. Apple responded to the Roe v. Wade rollback by declaring that its company benefits would cover out-of-state travel for reproductive care.
In a company-wide memo, Google’s Chief People officer Fiona Cicconi announced that employees can “apply for relocation without justification, and those overseeing this process will be aware of the situation.” The memo echoes similar statements from several other US tech giants.
Many of these large companies have made it clear that they intend to assist their employees with out-of-state travel and medical expenses, and have even offered to relocate workers from affected states, in order to ensure they have access to safe, legal abortions.
There are, however, many concerns that remain unaddressed, especially when it comes to data privacy. It is unclear whether even such giants as Google or Facebook will be able to fight legal challenges demanding access to the data from users suspected of having or planning to have an abortion in states where it is now illegal.
Looking at the responses from big tech, it’s certain that these companies have decided that the benefits of supporting abortion and reproductive rights outweigh any potential risks. The offers from companies like Google and Apple to cover travel costs and extend benefits are clear indicators that these are corporations with vast resources that can afford to cover such expenses with minimal effect on their bottom line. It also matters that these are companies whose operations extend across the country and indeed globally.
The tech giants are not overly constrained by local politics or even individual state laws. Additionally, the products and services that they provide are considered essential by their vast customer base. Even if someone is pro-life and disagrees with Google’s or Amazon’s policies, it’s unlikely they will boycott YouTube or stop ordering from Amazon. In other words, the tech giants can afford to take the positions that they have taken with regard to their employees’ healthcare.
While it is in many ways admirable and necessary for these tech giants to declare their support for reproductive health access, it’s also true that they have the resources to put up with the potential risks. In fact, given the broad support for abortion rights, it can be argued that their stance on the issue so far has been beneficial to them and their public profile.
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Unique Challenges Faced by Small Businesses and Startups
When it comes to socially complex and politically fraught issues, smaller companies and startups are in a fundamentally different position compared to large corporations. They have neither the resources nor the political power to make similar decisions without taking on more significant risks and facing more challenges than their much larger counterparts.
This does not mean that small business owners and startup founders should not speak up on such issues. Rather, it’s important for employers, employees, and customers of smaller companies to be aware of the risks and choices unique to them so that they can make informed decisions.
Business owners and startup founders who are pregnant-capable, in fact, often have no option but to respond to the Supreme Court’s decision, since the ruling directly impacts their reproductive rights. The consequences of the ruling are so sweeping, however, that all business owners and their employees will be impacted in significant and life-changing ways.
Small business owners and startup founders should consider the following risks and challenges:
- For companies that are local, there can be serious geographic limitations. Such businesses cannot simply offer to relocate their employees or even provide them with the funding to travel potentially hundreds of miles out-of-state. While Salesforce, for example, has promised to cover travel and relocation costs for its employees in Indianapolis, small business owners in the city are grappling with how to take care of their employees while remaining part of the local community.
- Business owners and founders who may choose to remain silent should note that their employees and customers might read more into that silence than may be intended. There are many reasons why companies may choose to remain silent. But when it comes to politically charged issues such as abortion, there will be risks and challenges no matter what position you take.
- Small businesses don’t have the same professional resources that large corporations have to help them navigate the evolving legal challenges they and their employees face. That means your HR and legal teams might have to dedicate more time and resources to dealing with the effects of the Supreme Court’s decision on top of their day-to-day responsibilities. Business leaders need to implement strategies for helping their managers and employees respond to political and social issues effectively and efficiently.
- For many small business owners and startup founders, social issues and legal challenges require a skillset entirely different from what it takes to start and run a company. Learning how to communicate about and lead on those issues can be a difficult but necessary challenge that requires an effective strategy and input from your executive team.
Abortion and reproductive rights are deeply personal issues, and there will be risks and challenges regardless of the position that business owners and startup founders take. Small companies face the risk of lost revenue from lost customers, potential divisions within their organizations including employee losses, and funding and recruitment losses.
For companies such as Google and Apple, such losses are likely negligible: the risk is worth the potential reward. But for smaller organizations, they can have a devastating impact. While keeping all these risks and challenges in mind, it’s important to note that many Americans expect their employers to take a position on social issues.
According to Edelman’s 2022 Trust Barometer, employers are the one institution Americans trust more than any other regarding social issues. 60% of workers, according to the study, choose a place to work based on their beliefs and values, while 64% invest based on those same factors. Clearly, it matters what businesses and their leaders have to say about social issues.
Risk Management for Small Businesses and Startups Post-Roe v. Wade
Given the unique challenges small businesses and startups face, leaders and founders need to consider the risks and rewards when assessing their capacity to take on social issues.
Among the issues to consider are:
- Have a serious conversation with leadership, your board, and your investors. What will be the potential costs and benefits? Will you lose customers? Will any of your employees resign? Do you have the funds for any potential legal expenses? Many companies may not have sufficient financial resources to make up for such potential losses. Make sure you find out if you’re among them. Given the state of the market and possible recession, tough decisions will have to be made.
- Have one message and one voice, internally and externally: whatever your position is, and whether you decide to take one, make sure your position is clear, and is communicated to your leadership and staff. Lack of communication with your employees and customers on social issues can lead to more questions than answers and cause unnecessary misunderstanding.
- Keep track of the evolving news and legal changes. The overturning of Roe v. Wade is just one step in what will be a long series of legal battles, and that is true of many other legal challenges. Understanding the current legislative situation will help you be more adaptable.
- Review your hiring practices. Remote work was a must before this, but staff may feel obligated to move states based on legislation. Allowing for that flexibility is crucial. However, you may also want to consider changing your hiring strategy. Maybe blue states or other countries seem like safer bets, and it can expand the horizons of your talent.
- Get insurance. As open and aware as you can be as a leader, you can’t control everything. Unforeseen risks will inevitably arise. Employee liability and directors and officers insurance are just two potential policies that will protect you, your organization, and your staff from catastrophic financial consequences.
- Ask your insurance company about services like Enquiron. Many providers offer services which help companies manage their HR duties with tools, resources, and hotlines without the need for fully fleshed out departments. Especially for early-stage companies, this can make all the difference.
Creating a More Inclusive Work Environment
In discussing the risks and challenges businesses face due to the Supreme Court’s decision to reverse Roe v. Wade, it’s important to acknowledge that the decision impacts women and pregnant people first and foremost.
The issue of reproductive rights is a reminder that companies should consider the roles of women and LGBTQ+ people in their organization, and how business leaders can create an inclusive work environment. A more inclusive workplace allows for honest, open discussions about controversial issues that can enable small businesses and startups to operate effectively in challenging conditions.
For business leaders committed to protecting reproductive rights, providing access to reproductive healthcare should be part of a larger strategy of creating a work environment more inclusive of pregnant employees and caregivers.
Despite the many risks and challenges, such an approach has the benefit of demonstrating to employees, clients, and customers that companies and their leaders are committed to upholding values that many Americans share and support.
Ultimately, the lesson for small businesses and startups is that the risks and challenges they face are unique and different from those faced by larger corporations who have more resources to mitigate against any potential risks. For startup founders and business leaders, acknowledging and assessing the risks their companies face is the first important step in navigating today’s complex legal and social landscape.
By being proactive and assessing those risks, leaders and founders can dedicate the necessary time and resources to create an effective strategy that will allow them to stay true to their values while protecting their businesses and employees.