Some companies are downgrading on DE&I – but at what cost?

Diversity, equity and inclusion (DE&I) has been high on organisations’ agendas for several years now, and it’s clear that candidates value employers who make the effort to develop welcoming workplaces. So why are some companies dialling back on DE&I?

Despite the laudable goal of driving DE&I across the workplace – and the associated attraction and retention benefits – a number of Fortune 100 companies have reportedly scaled back their DE&I programmes and budgets. What’s more, one major HR association has even dropped the ‘equity’ from the DE&I term – arguably the most important, albeit hardest to achieve, element.

We’ve considered the reason behind this shift in focus – and why organisations who continue to make DE&I a priority have much to gain.

Is the die cast on DE&I?

First an important caveat: while there have been some high-profile cases of organisations rowing back on their DE&I efforts, the reasons behind this move are multi-faceted, and don’t necessarily point to more exclusive outlooks. This includes the influence of a heavily politicised year – both in the UK, where we had a general election, and the wider world – as well as an attempt to cut back on costs in a tough economic environment, while still prioritising investment in new technologies.

And for some organisations, DE&I has become a disingenuous act; a buzzword used across corporate communications to ensure they’re meeting the expectations of candidates and stakeholders. Many leaders are simply coming to terms with the fact that their DE&I agenda is ineffective – not that they shouldn’t facilitate one to begin with.

Inclusive cultures are more important than ever

A complex business landscape, combined with mounting global and economic pressures, may tempt some companies to prioritise financial performance over DE&I initiatives. However, the two don’t operate in isolation, and there’s strong evidence to suggest a correlation between inclusive cultures and business success – even during times of uncertainty.

Here’s three reasons why DE&I deserves a place in your organisation’s future:

Superior team performance

The latest in a series of reports by McKinsey revealed that diverse executive teams are 39% more likely to outperform those less widely represented. Moreover, the report finds that the business case for gender diversity among executives has more than doubled in the past decade. There’s also compelling evidence to suggest that diverse teams are more innovative, pushing employees to question assumptions, and better understand diverse customer bases.

Improved talent attraction

Almost three-quarters of professionals (72%) will only consider applying to organisations that provide a public commitment to DE&I, according to our latest What Workers Want report. Securing the best talent in today’s world of work goes beyond remuneration, and inclusive workplaces remain firmly on a candidate’s radar.

Enhanced employee engagement

A key component of any DE&I strategy, fostering a sense of belonging in the workplace is an important way of engaging and retaining your best people. Moreover, research into the recent downsizing of DE&I functions has shown that companies with teams dedicated to DE&I are more widely represented, and foster higher employee satisfaction.

Create a DE&I strategy worth investing in

When you pull back the corporate veil shrouding DE&I and revisit its purpose – to challenge our own biases and address systemic barriers in workplace cultures – there’s a clear moral incentive to prioritise it, but an undeniable business case too. However, even some of the largest organisations – perhaps these entities especially – can struggle to implement effective DE&I strategies.

Given how unique each organisation’s own DE&I goals may be, there’s no silver-bullet – but there are some golden rules. The following actions will establish a strong foundation which companies can build on and tailor around their individual structures and demands:

1. Collect and analyse data: Use smart data to identify DE&I hot spots and cold spots within your organisation. Quantitative and qualitative data should cover recruitment, work allocation, employee engagement, and other key areas. Access our What Workers Want report for advice on gathering diversity data during the different recruitment stages.

2. Take an intersectional approach: Recognise that different groups experience bias differently; analyse data through an intersectional lens to address interwoven patterns.

3. Educate your workforce: Clarify DE&I terminology and raise awareness of bias, micro-aggressions, and psychological safety. Be sure to tailor education programmes to your organisation’s specific challenges.

4. Build a workplace community: Invest in employee resource groups and maintain an open dialogue with all colleagues.

5. Embed DE&I across your recruitment process: Work with proven talent partners who are committed to diverse recruitment, and ideally have expertise in the field.

6. Set DE&I targets: ‘What gets measured, gets done’, so establish achievable goals across the employee life cycle – including recruitment, engagement, and promotions – communicating these both internally and externally.

7. Establish accountability: Create long-term plans for progress measurement, led by action groups. Additionally, consider electing a ‘devil’s advocate’ representative – an independent voice – who can provide scrutiny and guidance.

Read on here to gain an even deeper understanding of what an effective DE&I strategy looks like.

Now’s the time to step up on DE&I

The current world of work may be a challenging one, with geo-political tensions, economic woes, and rapidly advancing technology making many leaders question their next move with even greater scrutiny. However, it’s these pressures that make DE&I values more important than ever; a constant that people can look to when the outside world is in flux.

Very few organisations, if any, have perfected their DE&I strategy. But the act of trying won’t be a wasted effort – nor will it be ignored by your people and all those you work with. And if it is the case that some organisations are easing off on their DE&I goals, it only presents the opportunity to prove your organisation’s ongoing commitment to a fairer world of work.

To ensure your recruitment strategy is welcoming, positive and inclusive for all, speak to a FAIRER Consulting expert today. For all your business’ wider workforce and talent needs, explore our website.