Report
Companies are scaling back on DEI despite high value among workers
5 DEI strategies to help attract and retain top employees
Expanding diversity, equity, and inclusion (DEI) initiatives has been a key trend in U.S. businesses for the past few years, and for good reason. A growing body of research finds that companies that prioritize DEI not only contribute to a more equitable society, they also reap significant benefits in terms of innovation, profitability, and employee satisfaction.
DEI roles surge, then retract
Back in 2020, DEI positions in corporate America soared amid a multitude of tragedies and protests. The Society for Human Resource Management reported in 2020 that DEI roles increased by 55%.
But today, many of these roles face an uncertain future. Workforce analytics firm, Revelio, found that attrition rates for DEI positions have surged among companies that have conducted layoffs, outpacing non-DEI attrition last year by a rate of 33% to 21%. And a recent analysis from Live Data Technologies revealed that chief diversity officers have been more vulnerable to layoffs than other human resources counterparts, experiencing 40% higher turnover.
But could these DEI cuts backfire?
Employees and job seekers prioritize DEI, but many employers aren’t delivering
Aside from the many business benefits of DEI programs, Eagle Hill Consulting’s research finds that workers and job seekers place a high value on their company’s commitment to DEI in the workplace. Our nationwide survey finds that more than half of U.S. employees say DEI is a key factor when considering a company for employment. That share grows among younger workers, with 77% of Gen Z and 63% of Millennials marking an organization’s diversity efforts as a top consideration.
Despite this support, less than a third (29%) of employees say their company has taken more action to demonstrate its commitment to DEI in the past six months. This aligns with recent DEI job cuts.
Our research did reveal some good news. Certain segments of the workforce are more likely to report that their employers have taken more DEI action. Among them are workers who identify as having a physical impairment (46%), LGBTQ (40%), military veterans (40%), and neurodiverse (39%). Nonwhite employees are also more likely to report their employers have taken additional DEI action in recent months, including 39% of Asian/Pacific Islander employees, 35% of Hispanic/Latino workers, and 33% of African American/Black employees.
Yet, the overall trend remains. The majority of employees report that their organization’s DEI initiatives have either stagnated or decreased over the last six months.
DEI initiatives impact your employees well before their first day
Our research makes it clear that all workers place a high value on bringing their authentic self to the job, feeling a sense of belonging and connection at work, and identifying with their colleagues and leaders. Moreover, when considering a new job, prospective employees want to see that a future employer is committed to DEI in the workplace and stress the significance of hearing about their inclusion practices during the recruitment process. Overwhelmingly, it is important that they hear employee perspectives are valued (85%), employees feel safe bringing their authentic selves to work (80%), leadership is transparent in decision making (80%), and the company has a collaborative culture (75%).
Seeing oneself reflected throughout the organization is another key factor for employees when weighing the decision to take a new job. Nearly two-thirds (63%) say it’s important the company has employees they identify with, and 59% say it’s important there are leaders with whom they identify.
The bottom line: Now is the time to continue DEI progress, not plateau or cut back
While corporate America may be cutting back on DEI roles, employees aren’t cooling on their desire for inclusion. Smart employers are tapping into this employee sentiment and ensuring their organization creates a welcoming, inclusive, and supportive environment for all segments of their workforce. A culture where employees feel valued and connected is a competitive differentiator when it comes to attracting and keeping top workers. But continued progress to strengthen an organization’s DEI programs and practices is challenging when there are staff and budget cuts.
There are ways to continue progressing DEI strategies that will make an impact and are visible to employees:
Shift DEI accountability from HR to company leaders. Creating a culture that values DEI means it can’t just sit in HR. Make leaders across the company accountable for creating an inclusive culture and safe environment that welcomes and celebrates all perspectives. Organizations can challenge leaders to step up to the plate as DEI change agents and demonstrate their dedication to creating a culture of inclusion through their actions, behaviors, and words. This means clarifying what role leaders have in owning DEI initiatives, providing them with tools and examples of how to model the right behaviors, and embedding DEI-related metrics into their performance reviews.
Build cultural awareness. Recognizing cultural observances, celebrations, and holidays is a way to build cultural awareness in the workplace, and it shows the organization values and respects the heritage and diversity of its employees. Hosting educational events, spotlighting cultural traditions, and creating space to experience and understand different cultures in the workplace can help break barriers and strengthen cross-cultural communication. Feeling a sense of inclusivity can also mean improved job satisfaction and productivity for employees. One approach is to include the holidays of different cultures in the company’s calendar of events or announcements. Another is holding shared events like a multi-cultural potluck lunch where employees are encouraged to bring a traditional dish from their culture to foster the sharing of food, stories, and experiences.
Review inclusivity language and images. Revisit your organization’s key internal and external materials with a DEI lens, including handbooks, calendars, websites, and social media profiles and posts to ensure the language and imagery is both neutral and inclusive. It’s not uncommon to see company content that re-enforces biases or is exclusionary. For example, gender-biased terms and images that favor male involvement and symbolize male dominance remain common in the workplace. Or, for example, nonbinary employees may struggle to feel accepted in workplaces that haven’t adopted pronouns and other vocabulary that affirms their identities. Another approach is to create and disseminate net-new content like an employee guidebook on inclusive language so that it becomes part of the workplace lexicon and culture.
Survey employees on how they can thrive. What makes employees feel connected to and included in their workplace? What makes them feel vulnerable? What can the company do to improve DEI in the workplace so employees can thrive? The best way to find out is to directly ask employees. This can be accomplished in a variety of ways: one-on-one sessions, focus groups, or regular surveys. Maybe employees want mentoring programs, or to see more inclusive language, or they are concerned about a lack of diversity in leadership. The bottom line is you won’t know until you ask. And you can’t take meaningful action absent good information.
Prioritize DEI learning. While DEI should be the responsibility of all employees, not everyone is in the same place on their DEI journey. Education is one of the keys to strengthening DEI awareness, employee interactions, and a culture that truly values DEI. For example, a company could hold learning sessions about unconscious bias, host an annual DEI refresher webinar, or conduct inclusive leadership learning.
Methodology
The Eagle Hill Consulting Diversity, Equity and Inclusion Survey 2023 was conducted by Ipsos from July 7-12, 2023. The survey included 1,395 respondents from a random sample of employees across the U.S. Respondents were polled about their views about DEI in the workplace and in employee searches.
