Companies’ diversity ditching’ may harm employee retention in the long run.
Companies' diversity ditching' may harm employee retention in the long run.
The Decline of Corporate Diversity Initiatives

In recent months, there has been a noticeable decline in the commitment to diversity, equity, and inclusion (DEI) among companies across industries. These companies, once vocal about their efforts to promote diversity, are now cutting costs and scaling back on their DEI initiatives. The repercussions of these rollbacks are not going unnoticed by diverse talent seeking employment opportunities.
A survey conducted by job search and career advice website The Muse sheds light on the experience of employees and job seekers who have witnessed their companies pulling back on their diversity commitments. Out of the 803 site users surveyed, 60% reported noticing a decrease in diversity commitments within their organizations. These changes include hiring or recruiting fewer diverse candidates, offering less internal discussion or DEI programming, and changes in leadership positions, such as diversity executives exiting the company.
The respondents of the survey primarily represent a diverse group, with 70% identifying as non-white, 65% as female, and 53% belonging to the millennial and Gen Z generations. Although the survey does not reflect the general U.S. population, it gives valuable insight into how diverse talent perceives the cuts in DEI initiatives. Research conducted by Pew Research supports this sentiment, revealing that approximately one-third of adults in the U.S. consider it important to work in an environment that is racially and ethnically diverse.
Kathryn Minshew, co-founder and CEO of The Muse, acknowledges that committing to diversity and inclusion is a more cost-effective strategy than taking action on these commitments. However, drastic cuts to DEI budgets can disillusion younger and diverse talent who have placed importance on working in diverse and inclusive environments. As the labor market becomes stronger, companies that neglect diversity and inclusion may struggle to retain talent.
Minshew’s question to employers is clear: Are they willing to be caught flat-footed or behind the curve when the labor market rebounds, and their lack of attention to diversity makes it challenging to retain top talent? The importance of diversity and inclusion will not diminish among job seekers, and companies that fail to prioritize these values may find themselves at a disadvantage.
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Concerns and Legal Challenges
The recent shift in corporate attitudes toward diversity comes at a time when legal challenges have intensified. In late June, the Supreme Court ruled against the use of race-based college admissions. This decision has raised concerns among DEI experts who fear that similar challenges may be leveled against corporate diversity programs. Thirteen Republican attorneys general wrote a letter to ANBLE 100 CEOs, warning them about potential legal consequences for considering race in hiring and employment practices.
These legal challenges, combined with the cost-cutting measures taken by companies, have created an uncertain environment for diversity initiatives. Despite this, it is important to recognize the impact that diversity has on both employee satisfaction and workplace dynamics.
Negotiating at “Social Impact” Companies
In a separate study published in Harvard Business Review, research shows that workers who interview at companies focused on social impact are often hesitant to negotiate for higher pay. They fear that such requests might be viewed as greedy or inappropriate by employers who prioritize making a difference over monetary rewards. This finding sheds light on the unique dynamics within organizations that aim to make a positive impact on society.
Managers at these “social impact” companies have also been found to hold a bias towards employees who place greater importance on material rewards. The perception that individuals interested in financial gains care less about the job can create a divided workplace culture.
Around the Table – HR Headlines
Here are some of the key HR headlines that have caught our attention:
- The pay divide between cities with the fastest-growing wages and those with the slowest is at its highest since 2016, with a 4% difference.
- Women are more likely than men to feel underpaid but less likely to ask for a raise because of it.
- Industrial and organizational psychology professors suggest that silly interview questions can turn off applicants.
- Leaked return-to-office guidelines at Amazon reveal that employees who choose not to return to the office, often due to relocation requirements, may be labeled as “voluntary resignations” without being offered severance.
Watercooler – Latest News from ANBLE
Here are some interesting stories to keep you in the know:
- Monitoring remote workers’ devices, a policy implemented by 96% of remote-first employers to oversee productivity, has been found to decrease worker efficiency according to a recent survey.
- Generative A.I. could lead to 12 million workers needing to switch jobs by 2030, although those who transition to new careers may experience higher salaries.
- Despite being happy with their jobs and personal lives, most Americans still believe they could make more money. Only 58% of surveyed individuals are highly satisfied with their salary, compared to 82% who feel highly satisfied with their jobs.
As we navigate these challenging times, it becomes increasingly important for companies to uphold their commitments to diversity, equity, and inclusion. The demand for a workplace that values and embraces diversity will continue to shape the job market of the future. Companies that prioritize DEI initiatives, even in times of economic strain, will find themselves better positioned to attract and retain top talent in the long run.