U.S. Companies Rethink DEI Rollbacks
NATIONAL REPORT — What began as a widespread corporate commitment after the 2020 protests has faced growing backlash in recent years, with diversity, equity and inclusion (DEI) initiatives becoming highly politicized.
Leading up to, and four months into, President Donald Trump's second term, some companies have scaled back or eliminated their DEI programs. However, walking back these initiatives has brought their own set of challenges to organizations, according to a recent survey from ResumeTemplates.
The survey, which polled 750 U.S. business leaders at companies that scaled back or eliminated DEI efforts in the past six months, reveals that some companies that rolled back DEI efforts are now reversing course.
Revelation: One in seven business leaders view scaling back DEI as a mistake.
Thirty percent of respondents say the consensus among business leaders at their company is that the decision to scale back DEI was a necessary response to external pressures. Additionally, 23% say they see it as a positive move that aligns with company values, while 18% say the company's leaders overall consider it a neutral decision with minimal impact.
However, 15% say it's believed to be a mistake that created new challenges. The remaining say the company's leaders are either divided in their perspectives (9%) or unsure (4%).
Revelation: Political pressure was the primary motivator for scaling back DEI.
The top reason companies reduced or eliminated DEI initiatives was political pressure (54%), followed by public scrutiny of DEI (42%), budgetary constraints (31%), leadership turnover (29%) and perceptions the programs had limited measurable impact (29%). Employee resistance was also mentioned by 27% of respondents.
Revelation: One in 10 say their company was boycotted after cutting DEI initiatives.
About one-third of respondents (33%) say their company experienced no noticeable consequences after reducing or removing DEI initiatives. However, the remaining two-thirds reported various negative outcomes, including a decline in employee morale (37%), increased internal conflict or division (33%) and difficulties attracting diverse talent (33%).
Additional consequences include:
- Damage to brand perception (27%)
- Loss of customers or partners (18%)
- Negative media coverage (16%)
- Boycotts (9%)
"Consumers, employees and job seekers are more aware than ever of corporate policies and decisions, and they vote with their dollars and career choices," said Julia Toothacre, ResumeTemplates' chief career strategist. "When organizations dismantle DEI efforts, it sends a message that they don't care about being fair and equitable. For many customers and workers, that doesn't sit well. Word spreads fast, especially on social media, and I'm not surprised to see companies now rethinking those decisions."
Revelation: One in five companies that rolled back DEI initiatives are quietly reinstating them.
About 21% of companies are quietly reintroducing or expanding DEI, while 12% are publicly doing so. Another 22% say discussions about ramping DEI efforts back up are underway, but no decisions have been made or actions taken. Most companies (40%) avoid new DEI-related initiatives, while 4% are unsure.
Revelation: Three in four admit it's just about the bottom line.
Three-quarters (75%) say that whether or not their company has a DEI program ultimately comes down to what’s best for the bottom line, rather than being rooted in values or social responsibility.
"Companies need to consider their employees when making these decisions. DEI initiatives promote inclusion and help people recognize and address bias. This creates a safer, more respectful workplace, which often leads to higher morale, better productivity and fewer HR complaints," added Toothacre.
ResumeTemplates' survey was conducted between April 25 and May 5. To ensure appropriate responses, participants were required to meet specific demographic criteria and successfully complete screening questions prior to taking the full survey.
