What has DEI actually done for U.S. workers and employers?

Yahoo

28-01-2025

President Trump's executive order banning diversity, equity and inclusion programs across the U.S. government is renewing debate over what DEI is and whether it has benefited workers and companies.
DEI has its roots in the Civil Rights Act of 1964, which barred employment discrimination based on race, color, sex, religion and other criteria. In the following decades, a range of policies have sought to root out bias in hiring, promote fairness in the workplace and open career pathways for people of color and for women, while also expanding to include sexual orientation and gender identity.
This push gained momentum after the 2020 murder of George Floyd, as politicians and social activists pressed companies to do their part in confronting systemic racism. But Mr. Trump's Jan. 20 order, issued on his first day back in office, criticized DEI as "illegal and immoral," while the following day a memo from the U.S. Office of Personnel Management called for all federal DEI employees to be placed on leave.
What is DEI in the workplace?
DEI is often misperceived as focusing only on race, according to DEI experts. But such initiatives comprise many practices that aim to uplift different marginalized groups in the workplace. For example, a policy that accommodates working parents, such as flexible work hours, could qualify as DEI. So could establishing affinity groups based on shared identities, like sexual orientation.
May critics of DEI say employer hiring and promotion decisions should be based on merit alone without regard to race, color, gender and other categories. Other opponents of the policies go further, arguing that DEI itself promotes racism.
But DEI defenders say that policies that seek to foster diversity and inclusion within organizations aren't in conflict with those that seek to reward the most talented or hardest-working employees.
"DEI enhances merit by saying, 'How do we find the best people for the job or make sure we are promoting the best people?'" David Glasglow, executive director of the Meltzer Center for Diversity, Inclusion and Belonging at NYU School of Law, told CBS MoneyWatch. "And that means thinking about barriers and biases that might be getting in the way of considering the full talent pool."
In defining DEI, Glasglow described "diversity" as a commitment to diversifying personnel within an institution so that U.S. workplaces better represent the population at large. "It's about engaging in effective outreach to places that might be overlooked and making sure hiring and promotion systems aren't screening out women or people of color from being considered," he said.
Meanwhile, when designed and implemented effectively, DEI programs are not discriminatory, according to Jessica Fulton, vice president of Policy at the Joint Center for Political and Economic Studies, a nonprofit that aims to improve African-Americans' socioeconomic status.
"These policies don't actually dictate who gets hired. They are ways to open doors to people who might not have access or aren't as well-connected in an industry or occupation," she explained.
The equity piece of DEI seeks to level the playing field for groups of workers who have historically been underrepresented in a given field or who, compared with their white or male peers, are underpaid for doing the same work.
"It could mean making sure women are able to enter traditionally male-dominated occupations, like construction or technology," Fulton said. "It's about addressing issues around equal pay for equal work, making sure people feel safe in the workplace so they don't feel discrimination when they come to work, because workers who don't feel safe are not the most productive."
Corporations also commonly aim to develop inclusion policies that help people from diverse backgrounds feel safe within a given workplace and its culture, she explained. They are intended to be, and often are, inclusive of everyone and not just members of marginalized communities, according to Fulton.
"It is also making sure they can put certain policies in place to make sure their workers stick around and keep working. It is about building a great team and being able to treat that team well and retain the folks they hire," Fulton said.
Given the recent backlash against DEI, though, a number of corporations are moving away from such inclusion policies, noting that they could pose a legal risk. That's after many major U.S. employers already ditched their DEI programs in response to pressure from anti-diversity activists. Among them are Ford, Harley Davidson, McDonald's, Meta and more.
How is success measured?
Many corporate executives have soured on DEI in recent years because of the perception that such policies don't enhance a company's performance, said Daniel Snell, co-founder of Arrival, a UK-based consulting firm focused on corporate leadership and culture. Other leaders, while recognizing the value of promoting diversity and inclusion, argue that DEI is inadequate for redressing what are at bottom much broader socioeconomic issues.
Glasglow of NYU Law concedes that it can be hard to determine if DEI programs are succeeding or otherwise clearly assess their outcomes. "It's difficult to measure certain DEI interventions, like the effectiveness of implicit bias training in the workplace," he said. "It also depends on what you are trying to achieve."
One tool employers use to try to gauge the efficacy of DEI policies are internal surveys that ask workers whether they feel like they can be themselves in the office, believe they are respected by their peers, and feel that their opinions matter. When it comes to a company's mentorship and promotion policies, employers will also monitor if members of a particular group of workers, such as veterans and Black employees, are quitting shortly after being hired — patterns that can yield insights into a workplace's equity and inclusiveness.
By contrast, if over time more women or people of color ascend to leadership positions, that could be viewed as a company achieving its goal of building a workplace that's more representative of its job applicant pool.
Corporate DEI programs aren't altruistic, experts emphasize, pointing to at least some empirical evidence showing that such efforts can help companies adapt to change, support innovation and even boost the bottom line.
"The point of diversity and inclusion is that companies, the government, universities, all do better when there are diverse participants in management and throughout the enterprise," said Michael Posner, director of the NYU Stern Center for Business and Human Rights. "The objective of this is not to set quotas or say we are going to take unqualified people because they fit a certain characteristic, like gender or race, but to create opportunity and try to overcome historic barriers to entry."
In one noted study, McKinsey found that companies in the top quartile for the gender diversity of their boards of director are 27% more likely to outperform financially than those in the bottom quartile. In separate research, the consulting firm in 2024 found that women's representation at work over the past decade has increased at every level of corporate management — women today make up 29% of C-suite level positions, up from 17% in 2015.
"[A] lot of the language and framing right now of DEI as illegal and discriminatory obscures who it's really for, which is all of us, and to the benefit of companies," Fulton told CBS MoneyWatch.
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