DEI is Not Dead: 7 Trends That Indicate DEI Is Very Much Alive

The U.S. Supreme Court ruling on affirmative action and eliminating DEI efforts in public educational institutions in states like Florida and Texas has put many companies on alert. Despite this, DEI efforts in for-profit companies have significantly improved the metrics that ultimately matter to investors, employees, and community stakeholders.

Given the constant barrage of news concerning funding cuts for DEI initiatives and social pushback on DEI topics, it is understandable why some might think that DEI is falling fast. However, DEI is far from dead, and those who are committed to it continue on.

The Business Case for DEI

The 2023 McKinsey and Company annual report titled “Diversity Matters Even More” shows that the case for diversity and inclusion has continued to improve. The current report contains the largest dataset yet—over 1,200 companies in 23 countries across seven industries. The data revealed that firms in the top quartile for gender equity on executive teams are likely to outperform their competitors in the bottom quartile of all financial metrics by 39%, up from 15% in 2015.

Regarding ethnic and racial diversity, the likelihood of outperformance for those companies in the top quartile for ethnic diversity vs. the bottom quartile is also 39%. It has been hard to find any initiative that has the chance to increase the likelihood of financial outperformance of your peers by nearly 40% in less than a decade. Even if this number is cut in half, it is impressive. This growth is a testament to the enduring power of DEI, and it’s a reason to be optimistic and encouraged about its future.

For example, according to Fortune Magazine, JPMorgan—which recorded its most profitable year ever in 2023 and is approaching a market value of $500 billion—isn’t retreating from its diversity efforts. In his 2023 annual letter to shareholders, JPMorgan’s CEO Jamie Dimon emphasized that DEI initiatives “make us a more inclusive company and lead to more innovation, smarter decisions, and better financial results for us and for the economy overall.”

Furthermore, in the six months following the 2023 US Supreme Court ruling against Harvard and the University of North Carolina, The Washington Post reports that “91% of the 320 executives surveyed said the ruling had not lessened their prioritization ofDEI. In fact, 57% said they had expanded their DEI programming in the past year.”

Are these companies changing the way they talk about certain initiatives? Maybe. Are they evaluating the impact of their programs? Of course, as they should. But are they backing down? No. Why? Because it is the right thing to do for all key stakeholders, investors, employees, and community members.

7 Trends That Prove DEI Is Here to Stay

#1: Incorporating DEI Company-Wide

In many cases, DEI initiatives in companies have been siloed. DEI teams and human resources are often held responsible for not just defining and implementing strategies but also motivating people to participate. We know that for inclusion to take root and the benefits to actualize, everyone in an organization must participate in DEI initiatives.

In January 2024, Emily Rose McRae, Peter Aykens, Kaelyn Lowmaster, and Jonah Shepp reported in the Harvard Business Review that “Companies will begin to pivot to embedding DEI throughout the organization. This approach will change how business leaders interact with DEI, positioning it not as ‘what’ they do, but ‘how’ they achieve high performance in their key objectives. Ultimately, this new model will see DEI shift to a shared way of working as organizations fully integrate DEI values into business objectives, daily operations, and culture.”

Some companies are combining the DEI function with the broader ESG responsibility. Others who recognize the inherent need to embed DEI in all employee processes are combining the Chief Diversity and Head of Talent or Head of HR Business Partner roles, making them responsible for talent acquisition and the subsequent progression of talent through the organization.

#2: Focusing on Data Collection and Transparency

Historically, companies have been challenged to collect employee data beyond gender and ethnicity. However, any long-term corporate initiative must ultimately be run by numbers, or it will not survive.

Companies are beginning to find ways to measure inclusion and belonging as lead indicators that improve diversity metrics. Companies like PepsiCo, for example, are committed to creating programs to address all employee audiences and, to do so, are getting creative about data collection.

Pepsi leveraged members of their LGBTQIA+ ERG to assist them in creating tech tools and training that served to incentivize employees to share personal data about their sexual and gender identities, which resulted in the participation of over 12,000 employees worldwide. This new data allows Pepsi to track the hiring, retention, and promotion data for their LGBTQIA+ employee community and to create programs that cater specifically to this community’s needs at work.

In February 2024, Kate Birch reported on Sustainability Magazine, “Recently recognized as a DEI initiative that has successfully scaled, PepsiCo’s LGBTQI+ global self-ID campaign was chosen by the World Economic Forum as one of just seven DEI Lighthouses for 2024, an initiative the WEF says was successful in meeting predetermined impact benchmarks. Collecting and analyzing employee data—and then using it to improve employee wellness, engagement, and satisfaction—will be a deciding factor in the long-term success of any corporate DEI program.”

#3: Continuing the Development of DEI Target Audiences and Work Accommodations

 

While companies have targeted their DEI efforts at women and historically underrepresented groups to date, many organizations are expanding their efforts to intentionally support people of all genders and gender expressions, people of different generations, and those with disabilities and health concerns. Companies are responding to the importance of more openness around gender fluidity and expression by providing gender-neutral bathroom access and education on inclusive language. And to respond to the challenges related to multi-generational workforces, many organizations are exploring ways to maximize collaboration and productivity among generational groups despite differing work styles, expectations, and communication norms.

Furthermore, organizations are beginning to recognize and provide accommodations for individuals with health concerns that make traditional work arrangements challenging. Michelle Travis—a law professor covering the future of work—explains in an article for Forbes that alternative work accommodations are becoming the norm, especially for employees with health concerns. Remote work is also becoming a standard work accommodation, with judges now ruling more in favor of remote work arrangements in court cases.

On top of the groundbreaking progress happening on the accommodation front, remote work is also increasingly being recognized as a profit booster. A 2023 Accenture report that collected data from 346 companies revealed even stronger support for the DEI business case for expanding remote work. The study found that companies that embrace disability inclusion efforts realize 1.6 times more revenue, 2.6 times more net income, and 2 times more economic profit than other companies. Why? The answer is the same for almost all inclusion-related initiatives: what benefits those with disabilities in the workplace ultimately benefits all.

#4: Increasing Mental Health and Wellness Benefits

Many leading organizations now recognize and aim to address the mental health and wellness challenges inherent in being a minority or a member of an “outgroup” at work. When individuals from marginalized groups experience microaggressions, they are highly prone to depression and anxiety.

Even when individuals do not experience direct microaggressions but have to cover their true selves during the day to fit into the dominant culture, a psychological toll occurs that can manifest itself through exhaustion, anxiety, depression, and imposter phenomenon. Imagine being the only minority in a room, an organization, or on a team. In these situations, the role of allies and sponsors is critical to that individual having a voice and being respected.

Companies are responding to this with innovative initiatives. Virgin Pulse, for example, is offering “Gathering Rooms” specific to employees that belong to traditionally marginalized groups that offer confidential conversations around challenges at work, such as identity covering and microaggressions facilitated by a trained psychologist and DEI expert.

If individuals from diverse backgrounds do experience microaggressions, they may need mental health services to assist them in recovering from those incidents. Companies today are also preparing to have these services readily available and are creating an environment where employees feel comfortable reaching out for support.

#5: Expanding Supplier Diversity Efforts

Even with pressure on employee-centered DEI efforts, supplier diversity efforts continue to expand with some companies. This goes as far as asking suppliers to report back on their vendors to make sure that the diverse or underrepresented suppliers are also using companies that employ underrepresented people.

According to Supplier.io, around 75% of companies had increased spending with diverse suppliers by the end of 2022, a substantial leap from 49% in 2020.

Focusing on supplier diversity has multiple impacts. For the company that is hiring diverse suppliers, it gives them a chance to potentially try more agile, flexible, and innovative approaches, as many of the diverse suppliers are smaller and have more ability to flex when needed. In addition, underrepresented suppliers tend to hire more individuals from underrepresented groups and pay them more. They are also more likely to have a physical presence in underrepresented communities.

Supplier diversity efforts make massive economic impacts in underrepresented communities, as well. Allstate reports that “$1 spent with Allstate’s diverse suppliers drives $1.80 in total economic production. This means the economic impact of Allstate’s purchases with diverse-owned suppliers in 2022 is estimated at over $694 million, which supports jobs, [wages, and benefits] within that supply chain and the communities where those businesses operate.”

#6: Preparing for DEI-Related Legal Challenges

Companies are not blind to the increase in legal actions intended to disrupt DEI efforts, and it’s possible that anti-DEI efforts could increase even more. According to Forbes magazine, organizations like The Kellogg Company, Meta, American Airlines, and BBDO Worldwide have increased their legal investment to protect their inclusion initiatives.

In Harvard Business Review, NYU professors Kenji Yoshino and David Glasgow argue that “DEI efforts are most at risk” when they favor some individuals more than others, when that favor is given to a legally protected group as defined under Title VII of the Civil Rights Act of 1964, and when those favored individuals receive economic, work-related, or development-related opportunities that others do not receive.

To minimize those risks, Yoshino and Glasgow suggest that companies move away from the language of and an emphasis on preferences offered to people from protected groups and begin talking about leveling the playing field for everyone. This can be done by examining critical processes in the employee lifecycle to eliminate bias, create the circumstances that allow for truly fair treatment, and begin to approximate the “meritocracy” that many organizations already claim they have.

#7: Integrating the Use of Artificial Intelligence

Much has been made of the fact that AI solutions reflect the biases of the human beings that created them. For example, if a company chooses to leverage AI to sort through resumes and the selection criteria is developed by talent professionals in the company, the AI solution will inevitably include the biases of those individuals who came up with the criteria. This element of the AI discussion has made many organizations justifiably afraid of incorporating AI into their processes and any efforts impacted by DEI-related issues. 

The hard truth, however, is that AI is here to stay, and companies that want to lead in their industry are using it to advance the organization’s objectives while respecting their values. Even if an HR team uses AI to automate currently manual and not necessarily DEI-related tasks, AI frees them up to think creatively about creating true inclusion as a positive outcome.

Real wins will be achieved when AI is leveraged to identify and prevent bias from impacting the hiring and progression of people in an organization. DEI and HR teams play a critical role in testing the AI solutions for bias, leveraging not just their knowledge but also their relationships and roles. For example, a solution designed to sift through resumes can be tested for bias by leveraging members of the ERG groups in the organization. This may seem like a lot of work upfront, and it might be. The payoff, however, will be large and long-lasting. The critical element here reflects what we at GP Strategies mean when we talk about Human+AI. A critical human eye must always evaluate and adapt AI solutions to serve the greater good of the organization and, frankly, the world.

DEI: Resilient, Enduring, and Still Relevant

The companies that never believed in the business case—and maybe even the moral imperative—of the DEI movement to begin with have divested. But those who have seen the impact in financial metrics, innovation, employee satisfaction, and community impact are not backing off and continue to find new and innovative ways to incorporate DEI into their organizations.

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