On Martin Luther King Day this week, Donald J. Trump was sworn in as the nation’s 47th President. He vowed to curtail Diversity, Equity, and Inclusion (DE&I) programs in government, have government policy recognize only two genders, male and female, crack down on illegal immigration, and deport illegals.
I wish the Trump administration and the US economy well, but what should be done with diversity programs? Are they necessary in today’s economy and culture or do they lead to too much animosity at work, discrimination against whites and males, and lower company performance?
The DE&I backlash has been intense. Conservative activist and former music video director Robert Starbuck has been extraordinarily successful at leading consumer campaigns to stop buying products from companies with visible DE&I efforts. According to The Wall Street Journal, roughly 15 companies already have felt the heat of his public attacks, including Tractor Supply, Lowe’s, Ford Motor, Walmart, and Deere. Bud Light lost its spot as the top-selling beer in the U.S. to Grupo Modelo in 2023 after controversy over a social-media promotion with a transgender influencer prompted some shoppers to boycott the brand.
Other brands such as Costco have kept their DEI policies, saying shoppers like to see their diversity reflected in Costco’s workforce.
Will your company curtail or significantly change its DE&I programs? I will provide my answer and why below.
First, here is a brief history of DE&I programs and where they went wrong. I will also offer a better way that I have seen improve the representation of qualified protected classes without alienating whites and men.
The Kennedy administration put in place Affirmative Action Programs (AAP) for government, academia, and business. These programs have led to success, especially in government hiring, academia minority and female student admissions (until the Supreme Court ruling in 2023) and to a lesser degree in business hiring.
These programs require businesses to ensure their recruiting practices give people of color, women, veterans, and the disabled proportional representation in job interviews. The plans require companies to take corrective action where practices appear to be discriminatory by job family and location. Additionally, AAPs required monitoring the promotion rates and compensation of protected classes, and implementing corrective actions when necessary.
In my years of administering these plans, I found them to be smartly designed and useful. They allowed me to have informed conversations with leaders about how to address discriminatory outcomes. But AAP programs were unpopular with executives, managers and even Human Resources leaders, required tedious administration, and were viewed by males and white workers with suspicion. The good news is that as a result of AAP programs conscious unabashed racial prejudice has nearly evaporated, according to research.
Diversity advocates transitioned from advocating Affirmative Action Programs to DE&I programs in the mid-1980s, after President Ronald Reagan threated to end AAP. (Government contractors with a contract of $50,000 or more and with 50 or more employees required to complete annual Affirmative Action Programs.) However, DE&I progress also stalled making progress over the last 20 years, except for Asians and white women. The highly proclaimed results and financial benefits of DE&I programs are now viewed with suspicion when academics could not verify McKinsey’s findings. A new academic paper raises questions about McKinsey’s methodology and suggests that its advertised findings may have gotten the causation backward: financial success may lead corporations to embrace diversity efforts, rather than the other way around.
However, other academic studies did find that DE&I programs can work when they are implemented with careful planning and data analysis. Please see Diversity and Inclusion Efforts That Really Work by David Pedulla.
MIT and George Washington Economists found that diversity programs do work. They looked at eight years of revenue data and employee surveys that measured satisfaction, cooperation, morale and attitudes toward diversity. That included data from teams and offices that were entirely male or female as well as gender mixed teams. Revenue figures showed that employees on more diverse teams were more productive and better performing, although individual employees reported higher levels of job satisfaction on teams that were mainly staffed by employees from their own gender.[ii
Returning to DE&I training programs, they required training employees about their unconscious bias at work when making decisions about hiring, promotions, and pay.. But these training programs did more harm than good, according to the research, because they made the attendees feel guilty, angry, and scared.
As reported by The Wall Street Journal, most DE&I training programs fall short on two fronts.
“First, they use implicit-bias education to shame trainees for holding stereotypes. Trainers play gotcha, sending trainees to take an online test for education and research. Instead of training people about research that finds that bias is pervasive, trainers use the test to prove to trainees that they are morally flawed. People leave feeling guilty for holding biases that conflict with American values.
“Gotcha” isn’t going to win people over, according to The Wall Street Journal article. “The approach is disrespectful, and misses the main takeaway from implicit bias research: Everyone holds biases they don’t control as a consequence of a lifetime of exposure to societal inequality, the media, and the arts.
The second problem is that it seeks to solve the problem of bias by invoking the law to scare people about the risk of letting bias go unchecked. Trainers recount stories of big companies brought to their heels by discrimination suits. They detail rigid do’s and don’ts for hiring, disciplining and firing people. They require trainees to pass tests on what the law forbids. All of this makes it clear that the CEO approved the training solely to avoid litigation. Trainees leave scared that they will be punished for a simple mistake that may land their company in court.
Trainings with this one-two punch—you are biased and the law will get you—backfire. The research shows that this kind of training leads to reductions in women and people of color in management.”
“At the end of the day, DE&I training can’t change implicit bias,” The Wall Street Journal article concludes.. We can’t turn the clock back on people’s life experiences. It is not wise to require training that backfires and angers the participants to the level that they no longer support DE&I or work quietly against it. However, companies can make people more aware of their biases and more committed to inclusion and equity, and motivate them to act upon these commitments.
Perhaps the biggest criticism I have of DE&I efforts is they seldom articulated how their success would improve the profitable growth of the company. Many argued that DE&I was a moral imperative or a legal requirement rather than a driver of sourcing more great talent and driving profitable growth.
Why do we care?
Companies should care because they want to hire, motivate, and retain the best talent they can find in an era of labor shortage. Readers of this blog know I am always harping on America’s long-term labor shortage due to declining birth rates, a broken immigration system that does not allow enough skilled and unskilled immigrant labor for American business needs., and Baby Boomer and Gen X retirements. This is a politically charged topic, but if you want to learn more about a path forward, read “Spark economic growth by modernizing the US workplace immigration system”.
There is a better way.
The better way is to develop a mission-focused, transparent, inclusive, and performance-driven culture for every employee. In these cultures:
- Every employee receives new hire orientation and coaching, not just those who qualify as a protected class.
- Team leaders look to see that every employee feels valued and listened to and that no one dominates the discussion. Why? Because we know from research then when there is this level of team transparency and trust, teams are more successful in achieving their goals and being innovative.
- Every employee, with their team leader, builds a career development plan that is actively pursued.
- CEOS and executives frequently articulate the vision for growth, innovation, and serving clients and the needs of humanity and ask employees to get involved by offering suggestions and joining improvement projects.
- Management seeks to hire and promote employees of different backgrounds, education, and lived experiences because people with this type of diversity drive problem solving and innovation and not same old, same old thinking. They use smart recruiting practices that minimize hiring-by-gut-feel and instead, hire the most skilled, collaborative and agile employees.
To learn more about building a mission-focused, transparent, inclusive, and performance-driven culture for every employee, I recommend the following posts:
- Seven traits of highly innovative organizations that drive improved financial performance.
- Importance of psychological safety and intellectual honesty for high performing teams
- Innovative teams need cognitive diversity
- Intelligent recruiting doesn’t depend on an MEI system
To answer my own question above, I believe companies should continue with a commitment to DE&I to hire, motivate, and retain the best employees and drive profitable growth. The best way to do this is with smart recruiting practices and creating a great culture that everyone wants to work in. Let’s move away from the culture wars and profitably grow our businesses.
About Victor
Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting and Managing Partner of InnovationOne, LLC. He works with organizations to transform HR and recruiting, implement remote work, and develop extraordinary leaders, teams, and innovation cultures. He is the author of the highly acclaimed book, Hack Recruiting: The Best of Empirical Research, Method and Process, and Digitization. He is quoted in business journals such as The Wall Street Journal, Workforce Management, and CEO Magazine. Victor has partnered with The Conference Board on innovation research. Subscribe to his weekly blogs at http://www.VictorHRConsultant.com