Bosses battle HR chiefs ‘blindly defending' corporate Britain's diversity drive

Yahoo

17-02-2025

At a recent dinner for the HR chiefs of Britain's biggest listed companies, anger was stirring. Donald Trump's crackdown on diversity, equity and inclusion (DEI) in America was riling up many guests.
According to one of those in attendance, the prevailing mood in the room was: 'We need to take a stand against this. We're not going to bow down to Trump and move in that direction.'
As US companies roll back diversity programmes they were once eager to promote, many British HR chiefs are determined not to follow corporate America's lead.
Divides are already emerging between the British and American arms of global businesses.
At Deloitte, staff in the US have been told to stop listing their pronouns at the end of email signatures as part of a broader retrenchment on DEI. Yet managers in the UK have reiterated their commitment to diversity targets, telling staff they will not copy the policy of Deloitte US.
Behind the scenes, many more similar battles are taking place. Splits are said to be emerging at major global banks, insurance companies and tech businesses.
'I have it on good authority that there are tensions between US and UK arms of insurance firms,' says one diversity adviser. 'In response to the US arms shutting down DEI, one HR in the City here has said she will simply rebrand the work from DEI to culture and inclusion if that's what it takes to keep going.'
For some British bosses, the pushback against DEI was overdue. Calls to offer gender-neutral bathrooms, include pronouns at the bottom of emails and spend more time and money on diversifying a company's ranks were taking up more and more executive energy.
'You hear about a lot of people in my role feeling trapped between the person they brought in to lead the [DEI] agenda and their executive colleagues,' says the HR chief of a FTSE 100 company.
'On the one hand, you have someone [in charge of DEI] saying we need to go harder, further. And on the other hand, you have a board saying this isn't a priority for us right now, this isn't something we want to spend as much boardroom time on.'
A crackdown in America gives British boards the 'cover of darkness' to make changes they had already been planning, the executive says. The need to cut costs post-Budget had already put so-called 'nice to have' initiatives such as DEI departments in the firing line for cuts.
'HR needs to be wise to the fact that boards are going to have a second look [at this] and where they can, reduce spend,' says Heeral Gudka, a consultant who advises companies on their diversity strategies. 'Now they have a gold-plated reason to do it.'
While most senior leaders agree that diversity is good for business, there are concerns that some of the policies advocated for by DEI departments have been expensive and ineffective.
'If some acronym bugs people, then that's OK – substantially things are not changing just because the word police are out there,' says one US-based shareholder activist.
Some suggest that the blame for why DEI has been ineffective lies with how it has been practised. Recent diversity and equality programmes were introduced to broaden the talent pool and improve retention, while inclusion policies were updated to tackle issues such as sexism and racism.
However, instead of fixing these problems, many teams simply focused on enforcing the policies rather than measuring how effective they were.
At times, almost cult-like tendencies have developed. Tanya de Grunwald, who advises companies on HR issues, says departments 'allowed a culture to develop where challenging the orthodoxy was taboo'.
In a recent LinkedIn post, Gudka wrote that associating support for DEI programmes 'with being a good and virtuous person is what has caused this mess'. She wrote: 'Good believers don't ask questions. They listen and nod along.'
De Grunwald says: 'In-house HR professionals need to decide, 'Do we blindly defend all our DEI work to date and double down on going even further? Or do we take this opportunity to assess it honestly, and make changes where necessary?'
'Those who have already started some of those conversations internally will be in a better position than those where this is still taboo.'
One thing HR has been effective at is increasing the size and power of its department. There are more than half a million people employed in the 'people profession' across the UK.
The number of HR workers grew by 42pc between 2011 and 2021, according to the Chartered Institute of Personnel and Development – four times the growth rate of the general workforce. Roughly one in 61 workers in the UK is in HR, covering everything from payroll and recruitment to overseeing employment law changes and managing staff training.
HR has transformed into one of the most powerful parts of a business since the pandemic, which empowered the personnel department to set mandates about who could and could not come into the office and what they could and could not do while there.
While the goals are worthy, some perceive the policies enacted under the banner of DEI as yet another power grab by HR departments.
For all this growth in HR, we do not seem much happier or more productive for it. Workers in Britain are worse off than they were in 2008 as the country lags behind the rest of the rich world, the International Labour Organisation warned last year.
Perhaps, then, HR departments should be in a reflective rather than defensive mode as DEI programmes come under pressure in the US and UK. In a newsletter Gudka sent to her clients this week, she said any fight to defend DEI should not just be about protecting jobs, which is a 'self-serving and easily corrupted incentive'.
While some of the UK's best-known bosses are preparing for a battle with their HR teams, others insist that they won't follow Trump's America. 'Diversity makes business better,' says one FTSE 100 chief executive.
Amanda Rajkumar, the former global head of HR for Adidas, says DEI has simply become 'timely scapegoat' in the US and is used as a 'general excuse for things going wrong'.
Ultimately, UK executives will want to make their own decisions on what to do – without either their US counterparts or their own, enormous HR departments forcing their hand.
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