Dozens of companies have retreated from DEI in recent months, while others, including Apple, and JPMorgan have doubled down. As companies continue to deliberate over how to approach DEI amid the quickly shifting reality, new research suggests that abandoning DEI programs could be risky, and most executives plan on sticking with them.
Weighing the risks. Abandoning DEI programming could have employee retention, legal, and financial risks, according to a new survey from the Meltzer Center for Diversity, Inclusion and Belonging at the NYU School of Law, and workplace gender equity firm, Catalyst.
Some 62% of C-suite executives believe their organizations are holding steady or increasing their DEI efforts compared to 24% of employees, who think DEI is integrated less. Most C-suite executives also believe that DEI initiatives result in better business performance and will continue to have a positive business impact long-term.
In addition, most (84%) executives see inclusion efforts as a key recruitment tactic. The report found that abandoning DEI could turn off emerging talent, as 76% of all workers and 86% of Gen Z said they’re more likely to stay at a company committed to DEI.
“That is critical for organizations that are looking to win the war for talent and sustain their business impact,” Alix Pollack, head of knowledge transformation and solution development at Catalyst, told HR Brew. “Clear and consistent, transparent communication is critical to bring employees along in the process of implementing the strategies that are going to enable them to feel that sense of respect and belonging and inclusion, which we know is so critical to those talent decisions that they are making.”
As the Trump administration and some conservative activists continue to campaign against DEI, some companies are shifting to softer language, but aren’t abandoning their core initiatives that may be popular among workers. Roughly 90% of respondents said they were in favor of DEI practices like inclusive hiring, employee resource groups, and bias training (which was the lowest, at 88%).
“Leaders are caught between seeing the value of building diverse, fair, and inclusive workplaces and the very real and profound pressures of todays legal and social landscape,” Christina Joseph, project director of the advancing DEI initiative at the Meltzer Center, told HR Brew. “The result is that many organizations have made decisions to become less public about their commitments and the work behind it.”
Potential legal risks. Some companies, including major law firms have shifted their DEI policies to avoid perceived reputational risks or scrutiny from the Equal Employment Opportunity Commission (EEOC), but more than 80% of legal and C-suite leaders believe that DEI programs could reduce legal risks, the survey found.
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Pollack noted that business leaders realize DEI programs could help shield companies from discrimination claims. While the pendulum might have swung away from DEI since the Supreme Court’s 2023 decision curtailing affirmative action in college admissions, the industry could experience a shift back.
“What we’re seeing and what’s indicated in the report, is that we are starting to shift in the other direction, where organizations are now recognizing that without robust DEI programs, you also run the risk of discrimination claims from traditional plaintiffs,” Pollack said.
Employers and organizations should involve legal counsel to weigh the benefits and risks of DEI programming, according to Joseph. “[It] is definitely important to have your legal counsel as part of the conversation, to be able to do a robust risk assessment,” she said, and cautioned that DEI leaders should be at the table as well. “DEI leaders are best positioned to speak to the impact that these programs have been having.”
Zoom out. Joseph said that organizations need to take a “holistic view” when doing any risk assessments. “This moment definitely has shown that the importance of defining clearly what DEI means to your organization is incredibly important,” Joseph said, pointing out that DEI has been around for a long time.
“This moment calls on supporters of DEI to really be intentional and clear about what they mean when they say DEI: diversity, equity, inclusion. What does that mean for the values of the organization? What does that mean for how they’ll approach various decision making in the organization?”
Companies should consider how to approach DEI in a new way, instead of scaling it back, according to Joseph and Pollack. Leaders should ask themselves, “how do we do this [in a way] to best weather the storms and sustain impact for the long term,” Pollack said, adding that communication teams should also be part of the planning process.
Finally, Pollack and Joseph said employers might not extend a seat at the table for employees, but they "should have a symbolic one.”
“Their values and needs should be front and center in the conversation,” Pollack said. And that doesn’t end when executives leave the table. “It in fact just began, and there are a lot more tables that they need to go and pull up a seat at if they’re going to effectively walk the talk to match their intent with their impact. And that’s where that employee engagement becomes so critical.”