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Over the past five years, diversity, equity and inclusion (DEI) has gone from being talked about as an urgent issue companies need to address, to a nice-to-have, to a dirty word that some are afraid to publicly endorse.
Corporate diversity initiatives have existed for decades, first introduced following the civil rights movement and the rise of feminism. The #MeToo movement in the 2010s sparked a significant debate about workplace culture, prompting some companies to install diversity officers and diversity-focused training programmes. The term ‘DEI’ as we know it developed after the death of George Floyd in 2020, when many companies felt pressured to make commitments, sign pledges, or donate funds, as the proportion of diversity officers spiked.
Since then, good practice in DEI has developed to involve investing in diversity or unconscious bias training, developing employee resource groups, conducting employee engagement surveys and looking at diverse slates when hiring. Despite that, experts say that in many cases companies weren’t able to pinpoint what the aims of their DEI initiatives were, and many elements felt like a tick-box exercise. Now, budgets have been slashed, DEI teams have been cut, renamed or absorbed into other parts of the business, and the topic of DEI itself has become highly polemic.
DEI has been losing momentum since 2023 but seems to have hit rock bottom after President Donald Trump’s inauguration in January, which was swiftly followed by a slew of executive orders attacking DEI programmes in the US. “There is a chilling effect from these executive orders across the private sector, even though they are primarily intended for federal contractors and agencies. There is no question that companies feel compelled to re-evaluate their practices and current initiatives,” says Nicole Marra, founder and CEO of US consulting firm Fixer Advisory Group. It’s not the first time Trump has targeted DEI initiatives: towards the end of his first term, he made attempts to ban diversity training programmes via an executive order.
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Response has been mixed. Companies including Google, Amazon and Walmart have since rolled back several of their DEI initiatives, igniting consumer boycotts in the US, while Elf Cosmetics, the NFL and Apple released statements confirming their commitments to DEI. In February, women’s networking event Trybe’s (created by the founders of retail conference Shoptalk) first event scheduled for May was cancelled as the organisers said they struggled to maintain support from sponsors, speakers and other participants, given the political climate around DEI.
Some companies are rethinking their approaches: last week, Victoria’s Secret renamed its DEI efforts to “inclusion and belonging” as part of a wider rethink. The company received backlash in the press, but a representative says the company remains committed to the core principles, it’s simply a reconsideration of how to best approach them. A memo from CEO Hillary Super shared with Vogue Business said: “We are also looking at our values to ensure the language we use makes clear that belonging is foundational to our business and our success.” A representative added to Vogue Business over email: “We will continue to have the best talent with diverse perspectives driving our business to its fullest potential while being fully compliant with the law.”
Vogue Business reached out to 16 of the largest fashion, retail and beauty companies in the US, and all either declined to comment on their plans or did not respond to the request. Consultants close to the matter say some are staying quiet because they’re focusing on mitigating legal risk, particularly as the definition of “illegal DEI”, referenced in Trump’s executive orders, remains unclear.
Is now the time to re-evaluate how we’ve been approaching DEI? “Rather than this being a moment where we go to another extreme and see organisations running from diversity initiatives because DEI is a dirty word, this could be an opportunity for leaders to take stock of what they’re doing and be thoughtful about how they’re creating a corporate culture based on their values, as opposed to being reactive and making decisions based on fear,” says Marra. As the saying goes, never waste a good crisis.
What went wrong?
The business case for diversity is clear: a diverse workforce improves decision-making up to 87 per cent of the time, while the top quartile of companies in terms of female and ethnically diverse representation are 39 per cent more likely to financially outperform, according to management consultancy McKinsey. So what’s with the backlash?
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The rhetoric used in Trump’s executive orders points to part of the reason: DEI is positioned as in diametric opposition to “merit-based opportunity”. The administration says that DEI has been used “as an excuse for biased and unlawful employment practices” that “amplifies prejudicial hostility and exacerbates interpersonal conflict”. There’s a perception that DEI hiring decisions are made because of identity, not skills. This perception has sparked concerns around reverse discrimination, particularly amid an ongoing lawsuit from a straight woman claiming the Ohio Department of Youth Services promoted a gay employee over her (the outcome is expected to have significant consequences for the future of DEI).
It’s a misconception that DEI is reverse discrimination or affirmative action, experts say. “DEI is not affirmative action, it’s about removing barriers, addressing obstacles and addressing the unique needs of people in organisations so they are able to fully utilise their talent,” says Anuradha Hebbar, president of the CEO Action for Inclusion and Diversity initiative, a coalition of US companies that have pledged to advance DEI, which is led by Society for Human Resource Management (SHMR).
DEI has become polarised because it challenges existing power structures, says Felita Harris, co-founder of non-profit Raisefashion, which supports BIPOC designers. “When people argue that DEI undermines merit-based decisions, they are misrepresenting the purpose of equity and ignoring the structural barriers that have historically dictated who even gets the opportunity to compete on merit in the first place,” she says. “It’s not about compensating for a deficiency, these programmes and resources exist because a system was built to exclude certain groups from access while others have advanced without facing those same structural barriers.” Harris adds that systemic barriers have been in place for so long and that we haven’t given DEI enough time to “course correct hundreds of years of inequity”.
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Widespread ineffective approaches to DEI have also played a role in the eventual backlash against the cause. “DEI was always piecemealed together, there wasn’t clarity or technical rigour,” says Jamie Gill, founder of talent incubator The Outsiders Perspective. At worst, some companies have taken shortcuts to DEI: instead of doing the work to develop a talent pipeline, they have made tokenistic “diversity hires”, which improve the appearance of diversity but have harmed not just the people involved, but the cause itself, experts say.
Many people from historically dominant or privileged groups have felt alienated by DEI. “Some conversations about DEI have been centred in a way that’s made particular groups feel like they are the problem and that we don’t all have an opportunity to be part of the solution,” says Daniel Peters, founder of consultancy Fashion Minority Report.
“The problem with [the typical approach to DEI] is that we’ve put people in siloes and pitted groups against each other in a zero-sum mentality, and that’s why you’re seeing reverse discrimination claims,” adds Hebbar.
Now, there’s an opportunity to “invite more people to the table to reflect on what they’d like to see from their workplace culture and to be part of the conversation”, Peters says. “Every single one of us at some point in our lives will find ourselves in a vulnerable or underrepresented category, whether it’s disability, a loved one facing discrimination, healthcare access, ageism, economic instability,” Harris says.
If everyone feels included within DEI, there’s a greater chance that it will stay on the agenda. “DEI sits so closely with pay, benefits, employee well-being and company values. If inclusion is for everyone, then it should benefit you and enhance culture for the greater workforce,” says Gill.
Where do we go from here?
In the short term, one of the easiest ways companies are changing their approaches to DEI is simply by renaming the function, like Victoria’s Secret did, to something along the lines of people and culture, belonging, employee engagement or workplace community. “Renaming DEI helps diffuse the tension surrounding it, allowing leaders to focus on the actual people and work involved, rather than getting bogged down by highly politicised and high-stakes wording,” says Marra. On the other hand, experts agree that simply changing the name of the programme won’t fix any fundamental issues that underlie the approach.
The way companies recruit diverse talent may also change, particularly for internship programmes that aim to recruit specific racial groups, for instance. This may also impact supplier diversity programmes and grants. “I think you’ll see organisations shifting away from relying solely on candidates from particular racial pools as the primary means of qualification for certain opportunities,” says Yaseen Eldik, executive advisor of corporate culture at Fixer Advisory Group. “There needs to be a broader, mission-oriented approach that emphasises supporting diverse communities and incorporates a more nuanced strategic perspective with clearly defined criteria.”
The concern around merit-based decisions presents an opportunity to develop strategies that are less tokenistic. “Ideally, we would like to see decisions being made on the understanding that different lived experiences and points of view are inherently good for business,” says Marra. “If leaders can keep this concept in mind when deciding how and where to create diverse teams, then these decisions won’t be about ticking a diversity box, they will be about doing what is truly best for the business.” Intention matters, and moving forward, businesses should think more holistically, going beyond race-based quotas or the perception that diverse hiring is an act of charity, experts say.
The backlash Victoria’s Secret has received for changing its approach points to a further issue for those rethinking their strategies; they risk being seen as fully rolling back DEI, rather than just renaming it or rethinking the role of quotas.
This black-and-white thinking points to the biggest issue: that DEI has become about politics, when really it is about people. “It’s not about politics; it’s about your values as a business leader and as an organisation,” says Eldik. According to a survey of US workers and HR professionals conducted by SHRM in January, less than half (43 per cent) of workers feel comfortable discussing DEI at work — but those who are comfortable doing so, report higher job satisfaction, likely benefitting from a more open workplace culture.
“We need to think smarter and harder about how we use DEI to engage the broader subset of employees to feel more connected to their fellow co-workers, instead of it being a tick-box exercise,” says Peters.
How can companies foster connection? It’s about more than sending an employee survey. Mentorship, reverse mentorship and regular team check-ins are all effective ways of helping co-workers understand each other’s lived experiences. “We need to create psychological safety; not just for those who we’re trying to support, but also for those we’re encouraging to be an ally. If not, we end up with constant division,” Peters says. “Now, it’s about how we back away from division and create more of a sense of unity.”
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