There were more DE&I leaders, but less spending in 2023, new report finds

DE&I programs have come under fire from politicians and right-wing activists over the past year, thanks in part to the Supreme Court’s June ruling that race-based affirmative action is illegal.

Now, a report from DE&I consultancy Paradigm has found that while some organizations increased their diversity tracking and efforts in 2023, others decreased their DE&I spending and strategy. The report comes amid concerns that the affirmative action ruling could influence workplace DE&I initiatives.

By the numbers. The report, called “The State of Data-Driven DEI,” examined DE&I data from 143 organizations in September 2023. It found that while there was a six-point YOY increase in the number of organizations with a designated DE&I leader, there was a four-point decrease in the number with a DE&I budget. There was also a nine-point decrease in the number of organizations with a DE&I strategy.

Furthermore, while 12% fewer companies gathered employee feedback on inclusion efforts compared to last year, 8% more had gender representation goals, for a new total of 34%. And 4% more established goals for race and ethnicity in leadership, for a total of 20%.

Zoom out. The report pointed out that Paradigm has heard that its HR leader clients are focusing less on DE&I data out of fears of diversity-related lawsuits. Their fears may not be completely unwarranted, as the American Alliance for Equal Rights—the conservative-backed organization behind the affirmative action case—now has its sights set on some corporate DE&I programs, the Washington Post reported.

“External forces are no longer pushing companies to invest in DEl; instead, in some cases, external forces are pushing back on companies’ investment in DEI,” the report said.

However, DE&I remains a factor that most Gen Z and millennial workers care about, according to a September report from EY.

“Amidst today’s political and economic backdrop, DE&I remains a key workplace expectation across all generations and a competitive advantage, and at the same time, DE&I remains imperative for companies like ours to consistently build into their long-term growth strategy,” Karyn Twaronite, global vice chair of DE&I at EY, said.