Since President Donald Trump was reelected last fall, 20% of companies have scrapped their diversity, equity and inclusion programs, according to a July 23 Resume.org report. Another 16% said they’re likely to do so by the end of the year, and 7% predict cutting the program within the next four years.
Among those that have kept DEI programs, 10% said their company’s investment has gone down.
Why companies are stepping away
Business leaders who cut or scaled back DEI cited a shift in the political climate as the reason, the report found.
“Eliminating DEI programs, particularly due to political pressure, is short-sighted and creates long-term risks,” Kara Dennison, head of career advising at Resume.org, said in a statement. “DEI initiatives shouldn’t be political; they should be strategic.”
DEI programs can help attract qualified talent, boost retention for younger employees and “foster inclusive leadership,” Dennison said. “Companies that abandon DEI risk reputational harm, disengagement, and an inability to adapt to an increasingly global, values-driven marketplace,” Dennison said.
The dangers of decommitting
Hiring fewer underrepresented employees can lead to lower innovation and performance, harm talent pipelines and hurt culture and employees’ sense of psychological safety, Dennison observed.
Of the 965 U.S. business leaders surveyed who cut DEI programs, more than a third reported lower retention and attraction of diverse talent, and 1 in 4 companies said their company has experienced reputational damage as a result.
Half of the companies that have eliminated DEI say morale is down, and 1 in 5 say they’ve seen an increase in reports of discrimination and bias. Without DEI programs, 57% of companies also noted a decline in the hiring of at least one underrepresented group.
The effects of these changes already are showing, April data from digital platform WorkL found. LGBTQ+ workers reported lower levels of workplace happiness, while heterosexual workers’ happiness increased slightly. At the same time, LGBTQ+ employees had a drop in feelings of empowerment, pride in their work and job satisfaction year over year, per WorkL.
