How diversity backlash is affecting DEI efforts in the workplace

Recently, we at i4cp hosted over 40 HR executives at the White House for a meeting with the administration on the state of diversity, equity, inclusion, and accessibility in corporations today. With some of America’s best-known organisations taking part, we had a productive and engaging dialogue on how companies are viewing their diversity-related initiatives in the wake of recent backlash. We did not publicize the gathering—or who attended—because we did not want anyone’s company to experience a Bud Light moment.

Which is, in my opinion, a sad statement on today’s environment. 

It is amazing how quickly things have changed. In the aftermath of George Floyd’s murder in 2020, many organisations issued statements lamenting his killing and pledged support. One estimate claimed that more than 1,100 organisations committed a total of US$200 billion to racial justice initiatives between June 2020 and May 2021. Forty-four of America’s 50 largest public companies made public statements about those investments. If organisations did not have a chief diversity officer, they quickly hired or promoted one. 

At the time, almost no organisation expressed fear of repercussions for embracing the benefits of diversity. 

Today, just a few short years later, it is a different story. Instead of unabashed support for DE&I, we are now in an era where Elon Musk, the CEO of one of the world’s most valuable companies (and one of the richest people on the planet), believes “DEI must DIE.” Musk claims that diversity, equity and inclusion are “propaganda words” and said, “the point was to end discrimination, not replace it with different discrimination.” After the Supreme Court ruling on affirmative action, another billionaire, Bill Ackman, claimed DEI is “inherently a racist and illegal movement in its implementation even if it purports to work on behalf of the so-called oppressed.”  

This sentiment is widespread and has negatively affected diversity professionals. Zoom recently laid off its entire diversity & inclusion team, and unsurprisingly, Twitter (now X) reduced its D&I team from 30 to two after Musk acquired the company. In the last couple of years, attrition rates for DE&I roles are about double those of non-DEI roles in an analysis of more than 600 U.S. companies. In the last six months, this has only accelerated.  

What the DEI data says

Given the rapid sentiment change, my organisation—the Institute for Corporate Productivity (i4cp)—in partnership with Human Resource Executive, set out to better understand how committed organisations are to their current DEI initiatives. Analysing data from over 850 respondents in organisations of all sizes, we arrived at a surprising finding: Most companies are nor slowing down their DEI initiatives, despite the backlash. 

Seventy-five percent of respondents from larger organisations said their company has made progress on stated DEI goals in the past 18 months, versus only 9% who confessed they have not (the rest did not have stated goals or did not know). Leadership buy-in (beyond the CEO) was cited as the No. 1 factor that enabled this progress to happen, followed by clear goals and objectives, and DE&I being “woven into” their day-to-day business processes. 

In addition to tracking progress against annual goals and benchmarks, most respondents evaluated DEI advancement through employee experience (82%) as measured through surveys, focus groups and sentiment analysis, followed by ERG involvement and culture impact. In the coming year, over a third of respondents expected to increase in-house communication on DEI commitments, while others planned to increase focus on underrepresented talent acquisition and development. 

Despite the progress, this commitment has not been without its challenges. But, where those challenges are coming from was also surprising. 

Even with the myriad external critics (cited as a challenge by 24% of respondents), the greater challenges are originating internally from managers and frontline workers (37% and 34%, respectively). These are not without consequences. Some companies (33%) are worried not only about the risk of lawsuits resulting from their DEI activities but also negative media and social media attention, damage to their culture and harm to their employer and corporate brand. 

READ MORE: Amid DEI backlash, employers are ‘doubling down’ on commitment

While the combination of critics and risks might seem daunting, organisations told us they generally feel prepared to handle the backlash. The department that respondents felt was most equipped was the DEI function itself, which 78% of respondents felt was very to somewhat ready to address these challenges. HR overall was a close second, while mid-level and frontline managers were believed to be the least prepared. 

Time to be prepared

Recently, i4cp has heard from chief diversity officers and chief people officers who offered some preparation advice that all organisations should consider implementing as soon as possible: 

• Partner with legal counsel to audit all current or proposed DEI activities, programmes or initiatives to identify any potential risks or concerns. 
• Ask the CEO to internally communicate the organisation’s commitment to DEI. 
• Building off the CEO’s message, co-create a communication plan with other senior leaders across the business, ensuring that there is clear messaging about DEI and business outcomes.
• Provide ongoing education on what inclusive leadership means and what it should look like for leaders at all levels.
• Organisations that conduct college recruiting should stay current on rapidly changing U.S. state laws. Since the start of 2023, at least 59 bills have been introduced in more than two dozen states and Congress that would roll back diversity efforts at colleges, such as hiring statements and mandatory trainings. Eight have already become law. 

Above all else, when addressing challengers remember one important fact: DEI is good for business. Many studies have shown that a more diverse workforce is generally correlated with better business performance. This primary fact is typically one that DEI critics have a hard time arguing against. 

Plus, I have never seen anyone present a business case on the merits of homogeneity.

About the author: Kevin Oakes is the CEO of the Institute for Corporate Productivity (i4cp) and is a frequent author and international keynote speaker on topics such as organisational culture, talent management, leadership, innovation, metrics and strategic learning in organisations.

This article was first published on Human Resource Executive.