DEI Disposal: Why Are Companies Getting Rid Of Diversity Initiatives?
There’s a decline in DEI initiatives, compared to previous years. Was it all just a trend?
Between September 2019 and September 2020, job postings for DEI positions on Indeed rose by 56.3%. On LinkedIn between 2019 and 2022, chief DEI positions nearly tripled. Companies were making historic decisions and moves to meet the contemporary moment and connect with consumers – but did it last? In the last year or so, DEI roles have diminished at a faster pace than non-DEI roles, beginning in 2021 and continuing to accelerate during layoffs in 2022 – particularly in tech industries, according to a Revelio Labs study. Over 300 DEI professionals left companies that have experienced layoffs, in some cases amounting to the exodus of entire diversity teams. But we know that companies with DEI teams tend to have higher employee satisfaction and a better productivity rate, so why is it no longer a priority?
Out of the Top 50 Fortune 500 CEOs, 37 are white men. Eventually, we want to get to a point where the number of diverse CEOs, both by gender and race, is no longer so greatly disproportionate. But in the meantime, a less diverse higher-level management team cannot be closed off to DEI practice. This pattern has continued for decades, and particularly for longer-standing chief operative staff, exploring a “new” and “modern” idea like DEI can be uncomfortable. However, people in power must use their power for a purpose, and in order to do that they need to remove the veil of authority and ego. To put it frankly, times are changing, and adequate future-proofing requires listening to staff and consumers who are looking to feel included and reflected.
Looking at the layoff rates in the last two years, compared to the rate of new jobs during the height of a particular social movement period, the patterns point to following a trend. When consumers demand a DEI focus and are loud about it, companies feel threatened, thinking that staying silent will lead to a decrease in attention and profits. But while companies may have scrambled to work DEI into their consumer-targeted advertising, internal change can make an even bigger difference. Diversity can have a transformative impact on the organisational structure, feeding the roots that will make strong branches. Not only will DEI help a company’s image – it can also radically improve its profits. A study from the World Economic Forum shows that companies with above-average diversity scores drive 45% of average revenue from innovation, while companies with below-average diversity scores drive only 26%. However, if a threat dependent on volume is the only thing driving companies towards change, change won’t be made. Changing outward-facing values solely based on optics doesn’t make you a leader, it continues a follower-based cycle that reduces social leadership.
The backlash has seeped into politics as well. In Texas and Florida, U.S.A, DEI initiatives are being targeted on a state level. Ron DeSantis, governor of Florida, signed a bill in June 2023 that prohibits state and federal spending on DEI programs at public state universities. DeSantis said that the acronym should rather be “discrimination, exclusion, and indoctrination” – a statement that is clearly driven by threat and discomfort with conversation around including racial minorities. Greg Abbott, the governor of Texas, has signed a ban on diversity offices in state-funded higher education institutions, claiming that programs “encourage discrimination in the workplace” despite its goal being to lessen the already wildly disproportionate numbers in the national and international workforce. These ideas have even reached the US Supreme Court, with an August ruling overturning affirmative action initiatives, which were designed to increase diverse access to university education. Now, the same conservative activists that brought that case to the Supreme Court have sued a venture capital firm that backs Black female entrepreneurs, alleging racial discrimination. A Harvard study analysed workforces in states which have banned workplace affirmative action and diverse hiring initiatives and found that there were significant declines in the number of racial minorities hired and retained following the ban. Meanwhile, the number of white men in workplaces increased.
“DEI isn’t just for minorities. It’s for everybody. ”
The big question is: Why? After years of progress and DEI encouragement, why the sudden backlash? Much of it can come down to a threat of power. DEI Thought Leader & Social Activist, Deborah L. Johnson, in a conversation with Kim Clark, says: “...people who have been in the position of being the oppressor are terribly afraid of the tables being turned. That's always the first thing in men's minds because they're afraid of being put in the position that women and other marginalized people are in.” This fear is of a process called reverse discrimination, a term describing discrimination against members of a majority group in favour of members of a minority group. The case for reverse discrimination, many feel, is backed by DEI initiatives: hiring quotas, initiatives, bias workshops, and so on. However, DEI exists because of unfair processes that create negative experiences for employees, which harms the organisation from the inside out. These initiatives aren’t creating imbalance – they’re balancing out one that has existed for decades. We have to “write them into the story”, as Clark says, and make them feel included in the DEI process. “They don’t see themselves in DEI… they’re thinking exclusion… and it’s real angst to feel like you’re not going to be valued like you’re not going to have a seat when the round of musical chairs ends.” After all, DEI isn’t just for minorities – it’s for everybody.
While profit and reputation are byproducts of a proper DEI initiative, they are the results of many other benefits that impact the core of a business. Here are five examples:
Fostering Innovation: A diverse team allows collaborators from different backgrounds and perspectives to create ideas that a monogamous team may not come up with. This is referred to as cognitive diversity.
Supporting Different Markets: To understand a diverse market, a workforce must be equipped with the right empathetic perspective. A team that mirrors its customer base or targeted audience has fewer barriers and more advantages in effective business strategy and communication.
Talent Retention: When employees feel included, both in decision-making and in representation, they feel safe, secure and comfortable sharing ideas, especially with senior management. Research shows that employees in a diverse and inclusive company are 5.4x as likely to stay long-term.
Access to Talent and Skill: A diverse team, or a team that invests in a diverse hiring process, opens itself up to various educational, intellectual, and geographic backgrounds. This contributes to cognitive diversity in the long run.
Improves Problem-Solving: A study from Harvard Business Review found that cognitively diverse teams find solutions faster by trading new ways of problem-solving, whether that stems from professional or personal experience.
Widespread bans and cases like those in the US may seem extreme, but they are a powerful manifestation of the beliefs and backlash that are driving individual companies away from DEI initiatives. Our workplaces often mirror the world around us – and if we’re being pulled away from DEI in the workplace, we are moving backwards as a society. Diversity and inclusion can’t be a one-off initiative as a response to contemporary social movements. It must be constantly nurtured and maintained through empathetic leadership. Though it’s an uphill battle, the progression of our society depends on it.
