One of the most prominent topics in business news today is the backlash against Diversity, Equity, and Inclusion (DEI) programs, a significant shift from the demand for DEI just four years ago. According to best-selling author and DEI strategist Lily Zheng, job postings for DEI roles skyrocketed by 123% in mid-2020. In 2023, many companies faced mass layoffs, predominantly targeting DEI-focused roles with an attrition rate of over 30%. So why are we seeing such a drastic change? The challenging economy certainly plays a role in organizations struggling to prioritize their initiatives, but most of the tension stems from the polarized political climate. While there is rising negativity towards DEI, organizations must push forward and amplify their commitment in the face of adversity.

There has been significant research on DEI’s impact on business; the results speak for themselves. Companies that prioritize and commit to DEI outperform those that don’t, and prioritizing DEI can actually alleviate many of the challenges organizations are currently facing. Financial stress? Companies with equitable and diverse workforces see higher profits. Productivity and employee engagement low? Diverse and inclusive teams are more efficient, engaged, and productive. Struggling to hire and retain talent? DEI widens the talent pool substantially and is a non-negotiable for younger employees. Here are a few statistics that demonstrate the impact DEI has on business:

• Organizations with higher diversity saw 19% higher revenue than those with lower diversity, according to Boston Consulting Group
• Diverse teams made better decisions up to 87% of the time compared to less diverse teams and individual contributors
• Gartner reported that 75% of organizations with diverse teams making decisions were projected to exceed financial goals
• Companies with higher diversity compared to less diverse companies see almost a 50% difference in outperformance

 

Amid harsh pushback, the call for DEI action strengthens in response. Consumers and employees hold companies to different, higher standards than ever, so if your organization is not taking action, it will falter. Emerging generations hold organizations accountable and do not hesitate to sever support. In fact, 63% of consumers consider values when determining where to buy from and who to support, and a 2021 Edelman Trust Barometer survey found that 42% of consumers cited how a company responds to calls for racial justice determines how and if they engage with a brand.

It is also essential to recognize that the workforce is changing tremendously. A new generation is entering the workforce, and priorities differ vastly from former generations. Gen Z will make up 27% of the workforce by 2025, and as the most diverse generation, their expectation of employer commitment to DEI is non-negotiable. Next Pivot Point shares that “56% of Gen Z workers would not accept a role without diverse leadership,” and 69% of employees would not consider a job with an organization that does not have a societal impact. In this challenging market, hiring and retaining top talent is already a struggle. Weaving DEI into the framework of your organization will improve employee engagement, well-being, productivity, and retention.

Diversity, equity, and inclusion is not a trend. We’re talking about human beings and how we can ensure everyone has the opportunity to thrive in a safe and inclusive environment. By embracing diversity and inclusivity, promoting equity, and committing to positive change, we unlock the key to success. Whether you’re just getting started or have already taken the first steps, action is essential. Your employees, your consumers, and your business as a whole will benefit.

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