Is DEI about to DIE?

Diversity, equity and inclusion (DEI) has been high on the boardroom agenda in the past three years – and it’s one of the main issues HR and people leaders bring up when I ask them about their key challenges. But is this all about to change?

According to a report?by talent solutions company CPL’s Talent Evolution Group, DEI is under threat in 2024. Surveying 900 industry professionals, it found 42% of c-suite business leaders perceiving it as a minimal priority. With conflicts across the globe and the cost-of-living crisis not easing up, the company says DEI may be an additional victim as organisations focus on cost-cutting, with a quarter (25%) of employers citing limited resources and budget as the main reason DEI will have less focus next year.

Meanwhile diversity consultancy Paradigm’s The State of Data-Driven DEI: 2023 Trends and 2024 Opportunities, says it has heard from a number of HR leaders who are de-emphasising data and analytics as a part of their DEI efforts. It says that between 2022 and 2023 it found a decrease in budgets dedicated towards DEI (down 4 points year over year), as well as a decline in the percentage of organisations that have a DEI strategy (down 9 points).

These reports come as there are signs of a DEI backlash in the US and UK. Throughout 2023 several US states introduced legislative measures aimed at dismantling DEI initiatives. For example, Florida's House Bill 999 prohibits public colleges from funding projects that promote DEI. Similarly, after Texas governor Greg Abbott ordered state agencies to stop considering diversity in hiring, major university systems in Texas curtailed their DEI policies and programmes in hiring processes.

Additionally, the US Supreme Court's ruling banning race-based admissions in higher education has led to increased scrutiny and challenges to DEI programmes. And the same group that brought that case, American Alliance for Equal Rights, has sued two law firms, arguing that their minority fellowships open only to students of colour, those who identify as LGBTQ+ or those who have disabilities discriminated against white people, straight people or those who do not have disabilities.

In the UK we have seen national newspaper headlines such as This obstruction and wokery is designed to stop democracy working; Civil servant revolt at woke takeover of Whitehall?and even have a new Minister for Common Sense to deal with all this dangerous ‘wokery’ in government and business. I kid you not! In response former Home Secretary Suella Braverman had her office draw up plans to halt diversity courses that promoted policies contrary to government.

Meanwhile high profile companies have announced changes to their DEI strategies. Fashion retailer Asos?revealed in its latest annual report that bosses will no longer need to meet diversity, equity and inclusion (DEI) targets in order to receive annual bonuses. X, formerly Twitter, cut its diversity team from 30 to just two and other tech companies have scaled back their diversity efforts.?

So is this the beginning of the end of DEI? Or just a blip as organisations fight to survive in what is predicted to be a difficult year ahead? Well, if there’s one thing we know it’s that businesses will do what is best for their stakeholders. And in my mind that means DEI isn’t going anywhere. For some things haven’t changed.

As the global workforce becomes increasingly diverse, businesses must adapt to meet the needs and expectations of a multicultural employee base. Companies that embrace DEI are better positioned to attract and retain talent from a wide range of backgrounds, enhancing their competitiveness in a global market. There’s plenty of evidence that diverse teams bring a range of perspectives, experiences and problem-solving approaches, fuelling creativity and innovation. Consumers and clients increasingly value social responsibility and inclusive practices, giving those that demonstrate a commitment to DEI a more positive image. And inclusive workplaces where employees feel valued and respected tend to have higher levels of job satisfaction and engagement.

So, to answer my question, no, DEI is not going to die. But, and it’s a big but, for it to be meaningfully embedded in the organisation and not just a list of platitudes, leaders not only have to fight the media and populist agendas but also their own biases. And this is what I will look at next…

How to navigate difficult conversations in the workplace ?

Some politicians may be going big on their anti-DEI policies but for organisations the bigger issue is that these policies are not delivering the change they want. I’ve covered this plenty of times before but recently was lucky enough to hear two of the big names in this area discussing the issue at The People Space’s HR Leaders Club event, which was kindly sponsored by workforce management solutions company Matrix.?

Amy Gallo, acclaimed author and commentator on workplace dynamics, and Ruchika Tulshyan, a trailblazing thought leader in DEI, shared their lessons on how navigating difficult conversations effectively is key to unlocking the power of inclusive workplaces. This involves embracing the inherent discomfort that accompanies discussions around DEI as this discomfort signifies meaningful engagement.

Psychological safety is paramount, allowing individuals to voice diverse opinions without fear. Recognising the myth of meritocracy is also crucial, as it acknowledges the existence of privilege and systemic barriers that need dismantling.

Here are some key takeaways from the session:

• Establish a ground rule for discomfort: Articulate that discomfort is part of the DEI journey, and it's a sign of productive engagement
• Recognise and dismantle system barriers: Actively identify policies, practices and cultural norms that sustain inequality and commit to systematic change
• Cultivate listening as a skill: Develop and train teams to listen without judgment and to remain open to continued dialogue
• Challenge the false sense of harmony: Encourage authentic conversations and acknowledge the existence of unresolved issues and sentiments
• Promote the ideals of psychological safety: Foster an environment where candid discussions can happen without fear of negative repercussions
• Frame DEI discussions inclusively:? Emphasise systemic issues and incorporate all viewpoints in the discussion, avoiding exclusion or blame
• Equip people with tools to address bias: While advocacy for systemic change continues, provide practical techniques for individuals to navigate daily biases they encounter.

Fostering an inclusive and equitable workspace is not an easy task – nor is it supposed to be. As our speakers said, we are at an inflection point. We have a real opportunity to make change. Read the full story on The People Space Five ways to build equity and psychological safety – navigating difficult conversations in the workplace. And if you want to find out more about The HR Leaders Club click here.?

Would regulatory action on diversity and inclusion promote healthy working cultures and reduce groupthink?

It’s not just organisations that think DEI is crucial. The UK's Financial Conduct Authority (FCA) is considering taking regulatory action to promote diversity and inclusion (D&I) in the financial sector. It believes that by increasing diversity and improving inclusion, outcomes for consumers and markets will be improved, reducing groupthink and supporting healthy work cultures.

To achieve this, the FCA has proposed several measures but acknowledges that a one-size-fits-all approach would be inappropriate and intends to apply the proposals to firms on a proportionate basis. Louise Skinner, Thomas Twitchett and Cary Marshall of law firm Morgan Lewis examine the proposals in an article on The People Space. They look at some of the main requirements including:

• Clear standards and expectations for firms around D&I, including reporting on employee numbers
• Requirements for firms to develop D&I strategies, set targets to address underrepresentation and collect and report on D&I data
• Additional requirements for large firms, including clear objectives in D&I strategies, setting different targets at various levels and incorporating D&I into firm governance structures
• Mandatory reporting of certain demographic characteristics and voluntary reporting of other characteristics.

The financial services sector is hardly known for its ‘wokeness’ so these measures demonstrate that DEI is not just a matter of fairness and social responsibility but, as we have seen above, makes good business sense.

Although some firms may view the proposed regulations as burdensome, it is essential to recognise that there is a need for a more active approach to address the existing lack of diversity and inclusion in the financial sector. The proportionate application of these regulations ensures that smaller firms are not overwhelmed, while large firms, which often have more resources and influence, are held accountable for driving positive change.

The FCA is seeking feedback on the consultation paper until December 18, 2023 and plans to publish a policy statement in 2024, with rules and reporting requirements applying from 2025. I’m watching the outcome with interest. Read the full story here.