Feature
Following the murder of George Floyd in 2020, access to corporate diversity, equity and inclusion programs rose from 29% in 2019 to 43% in 2021, according to an analysis by job site Glassdoor.
However, a 2023 study by global consulting firm DDI offers a much bleaker picture: the number of companies with DEI programs has dropped 33% since 2020, and across the board, leaders are less optimistic about their organization’s progress in key DEI practices. According to the study, there’s been an 18% decrease in the number of leaders who endorse their company’s DEI efforts over the past two years.
“Some of the chief DEI appointments in 2020 were performative,” DDI’s CEO Tacy Byham told Reworked. In the rush to respond to the nationwide protests against systemic racism that followed George Floyd’s murder, corporations pledged to fight economic and racial injustice by establishing DEI programs, but many left their DEI departments unfunded or hired directors but gave them no staff, Byham said.
Let's look into some of the factors that led to this decline in DEI efforts.
The Burnout Effect
Roughly 60% of diversity officers at S&P 500 companies left their positions between 2018 and 2021, according to a study by executive search and consulting firm Russell Reynolds.
However, not all DEI departures were caused by attrition. Cecilia Stanton Adams, CEO of The Diversity Institute in Minneapolis, said she stepped away from her role as chief DEI officer at a global financial services company in 2021 because of burnout. “I felt like I had the support and the company wanted to continue the work and it has continued the work, but the reality is that it is a big role to see through during pivotal times in our history,” Adams said.
Adams was hired at the end of 2019 but, after the murder of George Floyd, she was bombarded with requests and expectations. “It wasn’t just work, it was friends, family and the people you just meet,” said Adams. They wanted to know how to talk about race with their children, what books to read and what actions to take, she said.
“The role of a DEI officer is often far bigger than people expect,” Adams said. Often, the people being tapped for these roles don’t have the necessary background. For instance, when someone is hired for a newly created DEI role, they need to be able to make their business case for staff and budget, and lead without authority, she said.
“It can feel like they’re pushing a boulder uphill,” Adams said.
Related Article: Is DEI Sustainable in the Workspace?
DEI Integration to Business Goals
As companies started to worry about a recession at the end of 2022, many began laying off staff. Organizations that weren’t fully committed to DEI began to see these programs as expendable.
In 2020, most companies focused on making the moral case for DEI programs, saying it’s the right thing to do, but a large number failed to make the business case for these programs in the process, Janet Stovall, global head of diversity, equity and inclusion for the NeuroLeadership Institute, a consulting firm focused on culture and leadership, said. “Corporations need to tie DEI goals to business goals such as making money, saving money or achieving a vision,” she said.
Companies that still have active DEI programs are feeling immense pressure to demonstrate their program’s success, said Jennifer Tardy, founder and CEO of Jennifer Tardy Consulting LLC. “There is a lot of pressure among the people who lead these efforts to show and to prove,” she said.
While it may be discouraging to see a drop in the number of corporate diversity programs, Stovall sees it as an opportunity for companies to reboot their programs instead. Some companies hired the wrong person for the job or didn’t fully think through the scope of their program, said Stovall. “This is a correction, not a catastrophe.”
It’s also important, when making the case for DEI programs, to consider the legal and regulatory environment. Corporate DEI programs have been under scrutiny following the June 29 US Supreme Court decision ending affirmative action in college admissions. In response to that decision, the Attorneys General of 13 states wrote an open letter to the Fortune 100 CEOs, cautioning them against implementing race-based hiring and promotion practices.
But Tardy said the letter wrongly assumes that diversity recruiting is about hiring based on race. Diversity recruiting is about establishing a standard that guarantees a company's candidate pool reflects the diversity of the workforce and ensuring the company eliminates barriers in the hiring process that prevent these candidates from getting hired, she said.
And having a DEI officer inside the corporation helps ensure these recruiting practices are upheld. For instance, hiring managers often don’t even realize their biases during the interview process, Tardy said. A hiring manager who participated in Tardy’s inclusive leader training program never realized that during every interview, he would look for someone who reminded him of what he was like when he graduated from college. Now, instead of looking for a candidate who is like his younger self, the hiring manager asks himself, can they do the job, do they have the skills? Asking different questions can change the way the hiring manager views candidates, Tardy said.
Related Article: DEI Beyond HR: How to Weave Inclusion Into Operations
Cultural and Political Backlash
The word diversity has become highly politicized. As a result, even organizations that want to continue their DEI efforts are talking about rebranding their programs, said Kendra Mack, vice president of diversity, equity, inclusion and belonging at Kanarys Inc., a diversity, equity and inclusion technology company. “We’ve seen a lot of organizations shift from DEI to focusing on an inclusive workforce or a culture of belonging,” she said.
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Kanarys has been assisting organizations in re-educating staff about what diversity means for companies, Mack said. “So many people have different interpretations of that word,” she said.
It’s not unusual to see rebranding of social issues but the essence of the work should remain. Terminology changes all the time, said Adams, noting the evolution of the term gay to LGBTQ+. “Whatever I call it, I’m still doing the same work, creating access and opportunity for everyone,” she said.
Companies that feel pressure to cut their DEI programs, rather than reposition it, risk harming their reputation when it comes to recruiting and retaining talent. If DEI-related programs are the first to be cut when times get tough, employees and candidates will take notice, Tardy said. “When companies start hiring again, they will be competing against organizations that talk about inclusion and equity, and companies without DEI programs will be left behind,” she said.
