Since Donald Trump’s election, the backlash against policies on diversity, equity, and inclusion has increased. However, talent and inclusion companies in the UK have not been fazed by this development. They explained to Adam McCulloch that policies are now more complex and less simplistic than the simple approach which had angered some politicians.
Donald Trump’s closing address at the World Economic Forum’s annual meeting in Davos was jarring after a day of sophisticated, polite and carefully curated discussion about world issues. It was as if a rude boy in the back of class who had not been paying attention to the previous discussion decided to suddenly blurt out random thoughts.
Nobody would have expected anything less from the disruptive-in-chief. And nobody knows what to take seriously, and what to ignore.
On one issue, DEI Trump’s message, was difficult to ignore. He declared that he would “cancel any discriminatory diversity, equity and inclusion nonsense”, and added that the United States’ policy was that there are only two genders: male and female. There’s not much nuance in that.
The delegates were prepared for what was to come. Executive orders had been released earlier in the week and, in the US, the backlash towards DEI began in parallel to businesses introducing new anti-discrimination policies and equality policies following the unprovoked murder of a Black man, George Floyd by a White police officer.
In recent months, a number of US companies have scaled back or ended their plans to adapt to the new political climate.
Something went wrong?
What is going on in reality? In the diversity session, Davos asked how companies can rollback initiatives despite evidence that they are working. Jochen Wegner, the session chair, quoted a McKinsey study: “Diversity programs in many companies are highly successful and play a major role in their performance. But for some strange reason, this evidence-based statement this year seems odd – there must have not been much progress. The session’s distinguished speakers agreed that there was no evidence of anything going wrong.
Smart companies realise they can avoid this weaponisation using different language, such as avoiding the word ‘woke.'” – Duncan Crabtree Ireland
Katy Talikowska (CEO of The Valuable 500 disability at work collaboration) told the meeting the backlash is partly due to fear: “There’s lots of fear around language.” We need spaces where people feel safe to express themselves. “People are afraid of being cancelled.”
Luana Genot of Brazil, executive director at Identities Institute said, “Why should everyone follow the US lead?” “We should look past the US. In Japan, for example, there are new initiatives to reduce the gender gap. This is a topic that has local nuances.”
Duncan Crabtree Ireland, executive director of the Screen Actors Guild/American Federation of Television and Radio Artists in the US, was the one to make the statement: “What went awry is the politicisation of DEI.” We all need to be more inclusive in the workplace. There’s no reason for it to have become a football of politics. The concept is not wrong. Smart companies have realised that they can avoid this weaponisation through using different language, such as by avoiding the word “woke”.
Does the economic case for DEI have a strong foundation?
The latest McKinsey Diversity Matters Report (Diversity Matters More, December 2023) seems to confirm the Davos speakers. The report found that firms committed to diversity had a 39% higher likelihood of outperforming those in the bottom quartile in terms of ethnicity.
The case has been proven, isn’t that right?
Alex Edmans is a professor at London Business School who believes that studies with confirmation bias are not worth the time. He told Social Science Space that he would love to believe in diversity’s ability to produce better financial results. As an ethnic minority, I have personal reasons for wanting that to be the case.
People who enjoy targets usually benefit from them. “Some people think ‘what about me’?” – Prof Kandola
There are a lot of studies by prestigious organisations like McKinsey or BlackRock and even regulators such as the Financial Reporting Council that claim there is a link between board diversity, and financial performance. When you read those papers, it’s clear that the data is not very solid.
DEI is a complex issue that requires a more analytical approach from companies
Edmans, the professor who runs the inclusion consultancy Pearn Kandola and Binna Kandola could have been of great help to Davos. He is not depressed by the DEI backlash. It’s an opportunity. Not that he supports Trump’s words or actions, such as the sacking of federal DEI employees. He told Personnel Today that “this general rollback of DEI is needed, even though Zuckerberg’s comments are disgraceful.” Mark Zuckerberg was the head of Meta and had stated that corporations were “neutered” because they had too much feminine energy.
Many companies did not do DEI correctly. Kandola says that people always have targets in mind. Why do we spend so much time researching if targets are the answer? The targets are controversial. Those who are in favor of them usually benefit from them. Some people are left feeling ‘what about you?’ by diversity and inclusiveness.
Will the language Trump and his “tech bro” colleagues use lead to increased discrimination at work? “There is still legislation and people care about DEI, so there shouldn’t have been any bad consequences. Zuckerberg’s remarks could lead to an increase in sexual harassment, and even prejudicial decisions. This will only lead to problems for his organization” – and not a retraction by other companies.
“Diversity, equity, inclusion and well-being aren’t only moral imperatives, they’re also business drivers.” – Raj Tulsiani Green Park
Diverse talent pools
Raj Tulsiani is the founder and CEO at Green Park of talent management. He agrees with Kandola in most respects. DEI is no longer just about ticking boxes, performing policies, or superficial identity. It’s now all about culture and talent. He told Personnel Today, “Who amongst our clients ever said ‘We have a lot of women on our board.’ or We don’t wish to expand our options for leadership’?” None. Not one. No client ever said that they were so confident about their retention strategy, employee value proposition, or pay equity that they didn’t need to innovate in talent management. Why? They understand the competitive realities of the coming years. They understand that the ability to leverage diversity and secure a large share of talent will define their success in leadership.
Luana Genit, a Davos participant, agreed with him that the US position is not a global policy. “The world’s top organisations respect the US influence but remain steadfast with their commitment to productivity and growth. Diversity, equity and inclusion are not just moral imperatives, but also business drivers that foster trust and advocacy among colleagues and customers.
Tulsiani believes that firms who turn their backs to inclusion in the modern world will become less competitive. Leaders who understand business know that their brands are at risk of falling behind without the use of modern management techniques like driving productivity by promoting inclusion and engagement.
He says that inclusion is a part of culture and engagement. “The cheapest method to deal with productivity is increasing engagement. And you cannot do this without increasing inclusiveness.” It’s a binary. It’s binary.
What is diversity?
Rob Briner, professor of organisational psychology at the Corporate Research Forum and director of Corporate Research Forum, says that doubts that have already been raised about DEI were due to “people just throwing a lot of stuff at it because they were worried about appearance.” Just giving money will not work. It was similar to Live Aid. It’s a problem that is misunderstood.” He explains that the word “diversity”, itself, cannot be defined. There are many different types of diversity. Diversity can be good for certain roles and bad for others. The data is mixed.
It is a similar point to that made by Kandola who said diversity was impossible to define. He said: “Older persons face discrimination. They are told that they do not have potential. He says that older people are undervalued, disrespected, and treated as if they were just hanging around. Why not older people then? Why is it that targets are often only applied to women of color? Prof Kandola explains, “There are also discriminations based on obesity, wages, and good-looking faces.” The list is endless.
The UK Dimension
Many organisations in the UK are watching developments in the US closely. McDonald’s, for example, may be reversing in its DEI initiatives. However, a closer look reveals that core objectives are likely to remain the same. Only the language and branding have changed. This is the approach Duncan Crabtree Ireland alluded at Davos. As Apple discovered not all shareholders agree with the backlash.
Matthew Newnham reminds us, as an employment partner at Birketts: While in the US, the Supreme Court effectively ended the affirmative action with its June 2023 ruling, Students for Fair Admissions V Harvard, encouraging the DEI Backlash, in the UK there is no appetite for rolling back court decisions and legislation.
“Non-compliance not only carries a legal risk, but also a risk of damaging publicity and reputation” – Matthew Newnham Birketts
Newnham states: “The UK’s Equality Act 2010 places obligations on employers in order to take positive steps for employees or prospective employees with ‘protected features’. Employers may increase their risk of future litigation by changing their approach. Non-compliance not only carries a risk in terms of legal liability, but also the risk of damaging publicity and reputation.
UK law
The recent introduction of a new statutory duty for employers to take “reasonable measures” to prevent sexual harassing, which will be in effect from 24 October 2024 has made it more important for employers, who face significant financial penalties if they fail to comply, to consider proactive what can be done. This duty is likely to be strengthened further in the future under the Employment Rights Bill recently passed by the government.
He claims that reversing DEI could expose UK employers to further tribunal claims, and put their talent pipelines at risk.
In any case, the UK government is doing more to protect policies around discrimination towards minorities. Equality Bill will introduce measures to combat discrimination against minorities, including extending the reporting of pay gaps to ethnicity and disabilities for employers employing more than 250 people, and protecting workers from being treated unfairly on the basis race or disability.
Lucy Fullwood is the operations director of Insight Global. An international recruiting and professional service company. She agrees with Newnham that UK companies must remain committed to DEI while focusing their attention on its tangible benefits. “We predict UK businesses will remain steadfast to promote diverse and equitable initiatives in the workplace. This commitment will not only be a moral imperative but also a competitive advantage. A diverse workforce brings unique perspectives and approaches to the workplace. This diversity in thought is what fuels success. We are a global talent solution provider. We recognise that organisations need to be able recruit and retain diverse talent and create a culture of belonging in order to retain their employees.
The headline-grabbing US announcements may be just more red meat for Trump’s “war on woken” foot soldiers and an opportunity for tech-bro oligarchs who want to gain Trump’s favor. Businesses can then focus on hiring the best talent they can.
No one should be surprised if Trump’s allies find themselves in a mess when reality clashes with his forceful words. Sarah Palin, a Trump fan and former Alaska Governor, welcomed the anti-DEI campaign without irony, saying: “Well, President Trump is following science, there are only two genders.” God created both men and women.”
