Businesses often look for areas to trim costs when the economy takes a hit. Unfortunately, diversity, equity, and inclusion (DEI) programs are frequently among the first on the chopping block. This shortsighted approach undermines DEI’s impactful progress and sets companies up for long-term failure. At a time when attracting and retaining top talent is a top priority, DEI is not just a “nice to have”—it’s a business imperative.
Why DEI Programs Get Defunded
Despite the clear benefits of DEI initiatives, some companies still choose to defund them first during tough times. The reasons behind this can vary, but two explanations frequently surface: a lack of genuine commitment from the start and the perception that DEI programs simply aren’t working. Often, these programs fail because they engage in a command-and-control approach and neglect to ensure leadership accountability. This lack of genuine inclusion leads to the belief that they are ineffective and expendable when budgets tighten.
All Show, No Go: When DEI Becomes Lip Service
For some organizations, DEI initiatives were never more than a box-ticking exercise. The tragic events of 2019, such as the deaths of George Floyd, Breonna Taylor, and Ahmaud Arbery, spurred many companies to make bold commitments to diversity. However, these commitments often floundered without real dedication or a clear strategy. This is where the difference between performative and authentic allyship comes into play.
Many companies weren’t equipped with the necessary resources or faced internal resistance that they couldn’t overcome. Announcement of a DEI initiative is one thing, but quite another, to provide the tools, training, and support needed to make it successful. When push came to shove, these companies lacked the backbone to see their promises through.
Diversity for Show
DEI efforts often falter because they focus too much on superficial diversity or tokenism—such as hiring candidates from underrepresented groups without addressing deeper systemic issues, like lack of inclusive culture. When companies engage in diversity for optics, they might, for example, post job openings on diversity-focused boards or hire high-profile individuals from marginalized communities, which is a superficial approach that does little to create a genuinely inclusive environment and can even backfire. Employees and candidates quickly see through these efforts, which can harm a company’s reputation and undermine trust.
Solution: Dig Deeper to Increase Diversity
Companies must dig deeper to move beyond superficial diversity and make a real impact. This means shifting focus from quick wins to strategies that foster lasting change. Here are five action steps that can help your organization truly increase diversity:
- Understand Workforce and Workplace Representation: Workforce representation is your available talent pool, and workplace representation is who works for your company. To make meaningful changes, you need to be specific about which underrepresented groups you’re targeting and set clear goals tied to workforce data.
- Invest Equally in Hiring, Promotion, and Retention: Don’t just focus on hiring candidates from historically underrepresented groups—look at your promotion and retention practices, too. Sometimes, the problem isn’t getting the most qualified talent in the door; it’s keeping or advancing them into leadership roles. By addressing all three areas, you create a pipeline that supports increasing diversity long-term.
- Audit for Impact: Review your current DEI practices and identify what’s working and what’s not. This means looking for both actions to start and behaviors to stop. Some well-intentioned efforts may be counterproductive, creating barriers instead of breaking them down.
- Examine Workplace Representation by Department and Level: Break down your data by business units, departments, and levels to see where underrepresentation is most pronounced. This detailed analysis helps you pinpoint specific areas where more work is needed.
- Isolate and Analyze the Data: Go beyond generalizations and closely examine the numbers. Sometimes, grouping all people of color together can mask disparities among different racial and ethnic groups. When you isolate and analyze the data, you’ll uncover hidden biases and can address them more effectively.
Diversity isn’t something you can pause when times are tough. It’s a long-term commitment that, once abandoned, sets you back entirely. Real change takes time, and cutting back on DEI efforts erodes trust and progress. Staying the course, even during challenging periods, is what builds resilient, adaptable organizations prepared for the future.
To do this, focus on the five action steps: understand where your workforce lacks representation, invest in hiring, promotion, and retention equally, and dig deep into the data to uncover real issues. Audit your current efforts, adjust what’s not working, and push for meaningful progress. While early increase-diversity and retention initiatives might deliver quick wins, true success comes from a long-term, ongoing investment.