With the US Supreme Court banning race-based admissions to colleges and universities, companies are starting to scramble, and diversity, equity, and inclusion (DEI) leaders are under threat. Though the court decision did not directly mention corporate DEI initiatives, many organizations are cutting budgets—and roles—committed to advancing belonging at work.
In truth, the shift away from DEI, ESG, and other acronyms of so-called stakeholder capitalism began long before the court issued its ruling. An old-fashioned focus on financials has been threatening to overshadow newer corporate priorities since the start of the pandemic. Meanwhile, mentions of climate and social-impact initiatives during earnings calls have fallen for five consecutive quarters.
Some blame investors who’ve been pushing executives to prepare for a recession. Unfortunately, when cuts are made, DEI is often at the top of their list. Companies are also under scrutiny when DEI commitments fail to deliver what they promised, with directors and officers of major corporations being taken to court and, in some cases, forced to settle for millions. More recently, anti-ESG investors introduced shareholder proposals against the likes of Apple, Meta, and Levi’s, further contributing to skepticism about the impact of DEI initiatives.
While it’s understandable that large company legal and finance teams are playing it safe, abandoning DEI is rash. That is unless their efforts were hollow all along.
Were companies performing or passionate about their DEI commitments?
The murder of George Floyd in 2020 spurred employee demands for action. Not every company responded, but those that did moved quickly. As of 2021, only half of Fortune 500 companies even had a DEI leader, with more than 60 hiring their first DEI lead after May 2020. Meanwhile, in 2021, 42 tech companies set aside almost $4 billion to support Black-owned businesses, racial justice organizations, and internal diversity initiatives. Yet, just a few short years later, some companies note increased employee resistance to diversity programming.
As a former head of people, I’ve often been tasked with overseeing diversity initiatives and have seen first-hand the pressures on those leading the way forward. We’re now seeing an exodus of DEI practitioners, and many companies are backtracking on their commitments to diversity.
The role of the chief diversity officer is often broad and tasks its holder with being a spokesperson both for external events—like police brutality and shootings—and internal programs and problems. They usually don’t stay long, with many getting poached or burning out and leaving the role altogether. And some DEI leads also have now been tasked with oversight of environmental, social, and corporate governance (ESG) initiatives, often requiring a different skill set and area of passion.
Here’s a look at just some of the higher-profile growing pains for leaders in DEI:
- Pinterest had three DEI leads in four years.
- Apple hired its first diversity leader in 2017 and has had three diversity leaders since then.
- Zoom hired a chief diversity officer in 2020, but by 2022 the role was vacant and remains open now.
- In one month, six DEI executives left their roles at entertainment companies like Disney and Netflix.
- Slack has made progress after investing in racial justice initiatives, improving gender diversity, and underrepresented minorities in technical roles. Yet, its most recent diversity report shows that attrition among underrepresented employees has increased.
LinkedIn may be an outlier, with DEI chief Rosanna Durruthy holding the role for six years and making progress internally and externally. LinkedIn has doubled the representation of Black employees since 2020 and created site-wide tools like the Values Match feature, which allows prospective employees to assess a company’s commitment to everything from career growth to DEI.
The broader data is less encouraging. Job postings for DEI positions fell 19% in 2022. And since 2018, the average tenure of DEI roles in the S&P 500 has been less than two years.
What’s next for affirmative action in the workplace?
After the high court ruling on affirmative action at universities, some of the companies most outspoken about their diversity goals, among them Salesforce and Microsoft, publicly committed to staying the course and keeping their commitments to DEI and belonging. But this doesn’t appear to be the norm.
Of course, corporate DEI efforts have been under threat before. When Trump issued an executive order in late 2020 banning federal agencies, contractors, and grant recipients from conducting training that promotes “divisive concepts,” many companies outside of those sectors rushed to cancel their diversity training, with some going further and halting all training programs.
Three years and one monumental Supreme Court decision later, it’s worth remembering that private employers are still protected by Title VII of the 1964 Civil Rights Act, which prohibits discrimination against employees and job applicants based on race, color, religion, sex, national origin, disability, or age. By law, however, workplace affirmative action plans must not require eliminating white workers and replacing them with workers of color, must not create a definitive bar to the advancement of white employees, and must be a temporary effort to eliminate a specific racial imbalance.
What other DEI practices may be under scrutiny now?
- Reserving hiring or promotion slots for underrepresented groups
- Asking managers to use race or sex as a “tiebreaker” when choosing between candidates
- Setting strict demographic targets tied to manager compensation
- Programming that expands opportunities for underrepresented groups without also negatively impacting hiring and advancement opportunities for those in the majority
Some DEI work will likely persevere, though. What type of DEI programming may have staying power?
- Removing stereotypical language from job postings
- Ensuring interviews are fair by asking consistent, legal questions
- Making promotions based on performance and ensuring the process is transparent
- Talent attraction strategies that include outreach to diverse schools
- Employee resource groups that focus on the inclusion and belonging of all employees
- Mentor and sponsor relationships
- Programming around allyship, psychological safety, and belonging
A recent statement from the chair of the EEOC tries to reassure employers: “It remains lawful for employers to implement diversity, equity, inclusion, and accessibility programs that seek to ensure workers of all backgrounds are afforded equal opportunity in the workplace.”