Dwindling commitment to DEI policies predicted for 2024

As we approach 2024, diversity, equity, and inclusion (DEI) policies within US companies are expected to come under intense scrutiny, warns Johnny Taylor Jr, president and chief executive of the Society of Human Resource Management.

This prediction comes amidst a national shift in attitudes towards DEI policies, which Taylor suggests is already fading.

The DEI movement gained significant momentum following the murder of George Floyd in 2020, with companies across the US pledging to make their workforces more diverse and tackle racism.

However, Taylor warns that the national shift towards inclusivity is already fading, with companies moving away from these commitments.

This shift is not isolated to the US. Data from Glassdoor’s economic research team suggests a decrease in DEI program access globally. The rate of Glassdoor users reporting DEI access dropped from 43.5% to 43.1% in 2023, marking a trend of waning DEI interest.

Backlash building

The backlash against DEI policies is becoming increasingly evident.

Several major US companies, including JPMorgan Chase, have modified their DEI policies in response to legal threats from conservative groups. These groups argue that certain DEI policies may expose companies to legal risks, challenging policies that aim to boost racial and ethnic representation.

Some companies have also altered their executive compensation plans and other policies to remove specific references to racial groups or numerical diversity targets in response to these threats. This trend is evident in actions taken by companies like Yum! Brands and American Airlines, which have recently adjusted their DEI-related policies and goals.

High-profile figures such as Elon Musk have publicly criticized DEI initiatives, arguing that they replace one form of discrimination with another.

This sentiment is echoed in the legal sphere, with the US supreme court striking down affirmative action in higher education in 2023. The legal challenges are part of a broader attack on DEI programs, which is expected to continue, especially as the 2024 U.S. presidential election approaches​​.

In the broader context of shareholder activism, there has been a noticeable decline in the support for DEI proposals during the 2023 proxy season. The number of DEI proposals has decreased compared to the previous year, and the average support for these proposals has also diminished.

This decline in support for DEI initiatives is seen across various proposals, including those related to the effectiveness of DEI programs, racial equity audits, and gender and racial pay gap disparity. Interestingly, while anti-ESG (Environmental, Social, and Governance) DEI proposals have increased, they have received very low levels of shareholder support.

This trend reflects a general decline in support for social shareholder proposals, which have become more prescriptive in nature since their initial success in 2021. Many companies have addressed or promised to address social and environmental concerns, leading to reduced support for subsequent, more aggressive proposals.

Despite these challenges, many organizations continue to prioritize DEI training.

According to a report by the Association for Talent Development, 73% of organizations offer DEI education to their employees. However, this represents a slight decline from the number of DEI programs offered in 2021.

A renewed focus is needed

As we move into 2024, HR leaders are urged to carefully consider their diversity goals and initiatives. Employee resource groups (ERGs) and policies that tie leadership compensation to diversity goals have become points of contention within companies.

The challenge lies in how companies can aspire to be more diverse without being prescriptive, as comments about specific diversity percentages could be interpreted as a type of quota, which could conflict with the supreme court decision.

Taylor suggests that 2024 will be a reset moment for DEI policies. “We’re three years after what happened in 2020, and we think it’s time to say, ‘Did that work?’ and make certain adjustments to our approach to diversity,” he says.

As the landscape continues to evolve, HR professionals are encouraged to stay informed and adapt their strategies accordingly.

The coming year will undoubtedly bring new challenges and opportunities in the realm of DEI, and it is up to HR leaders to navigate this complex terrain.

HRD Connect Curators of the New Business Landscape. HRD Connect produces industry-recognized content for senior HR leaders. Through articles, case studies, Q&As, podcasts, events, and more, we offer truly progressive and cutting-edge insights designed to help people leaders address core HR challenges and add greater value to their business.

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