We just celebrated Juneteenth last month. It became a federal holiday in 2021 following decades of activism. The call for legislation began in 1968 and ended after a powerful protest walk by “Grandmother of Juneteenth” Opal Lee from Dallas, Texas to Washington D.C. Despite this landmark decision, pandemic and workplace changes along with anti-woke backlash has spurred new challenges for leaders seeking to build more inclusive organizations—including equity for racial and ethnic groups, women, immigrants or the inclusion of neuro-diverse, gender minority or any other out-group. Adding to the trend, during the week of June 2023, the Supreme Court erased race-conscious admissions programs at colleges and universities.
The pattern is showing up in the workplace, too, according to a DDI 2023 Diversity, Equity, and Inclusion Report which found that companies are failing to deliver on DEI promises. It reveals an 18% decrease in leaders’ endorsement of their company’s overall DEI efforts in the last two years. Plus, the data show that the number of companies that didn’t offer DEI programs increased from 15% in 2020 to 20%. The number of companies with DEI programs is shrinking with more than 40% of senior female and minorities planning to quit.
I sat down with Chantalle Cuba, a partner at Korn Ferry, who told me, “These statistics are an indication of a lack of understanding about the needs of those groups of people to feel safety and belonging and express their highest good in their jobs. It’s hard to change jobs. That many people are not changing jobs over pay. There is a lack of the organization’s alignment with these employees who have needs that are unmet.”
A new report from the Edelman Trust Barometer supports Cuba’s point. It found six in 10 employees won’t work for organizations that fail to speak out against racial injustice. A full 62% say companies are “doing mediocre or worse” in living up to their promises to address racism. The findings suggest that most employees favor DEI initiatives. Those saying that companies aren’t doing enough to address racism rose eight percentage points from last year. Among the employees who said their company isn’t making meaningful progress in addressing racism, the top reason is unfunded DEI initiatives.
With the stress of economic uncertainty and labor challenges, companies have turned their attention away from DEI toward these urgent issues, but that has left many leaders, especially those who are women and from minority racial and ethnic backgrounds, questioning their company and role,” says Stephanie Neal, Director of DDI’s Center for Analytics and Behavioral Research. “If companies don’t act now to rekindle and reinvest in their DEI programs, the loss of talent will have a profound impact on future business success.”
Cuba insists companies are turning away from DEI because they’re just getting to the tough part. “‘We’re in a difficult time. CEOs are backing down from DEI, scared of being criticized by employees, customers and investors. Politicians call out companies on a daily basis. When you get to the middle of DEI work—which is where we are—that’s when it gets hard. The excitement, support and emotions have waned. When it starts to get hard, you’re in to the real part of the work—culture design and culture change—the place of being honest about what your true culture is and deciding whether you’re going to change. And that’s the heavy lifting part.”
Dr. Randal Pinkett agrees. The co-founder and CEO of BCT Partners and author of Data-Driven DEI suggests why this is happening despite the best intentions of many leaders. “Any effort to mitigate bias and grow inclusivity within an organization must begin with its people,” he told me by email. “At the end of the day, organizations do not change; people change.”
“A key question posed by these findings is how companies can create an inclusive remote work culture and embrace diversity in all aspects,” said DDI CEO Tacy Byham. “Gender, racial, and ethnic diversity in leadership is a clear business advantage, and you could be pushing away these highly talented leaders by taking away flexible work options. Options like remote work empower them to do their best work for the organization while meeting personal goals and family obligations.”
Research shows that an inclusive environment, fostering a sense of belonging, improves mental well-being, particularly for women and marginalized groups. The DDI report cited four reasons that diversity, equity and inclusion are good for business:
- Letting DEI slip impacts business performance. Organizations with greater leadership diversity are 2.4 times more likely to outperform their competitors. Companies that rank in the top 10% among their peers in financial performance have at least five percent more leaders who are women and from minority racial/ethnic backgrounds than below-average performers, showing that even a modest increase can have significant results.
- Generational divides influence DEI perception. While leaders under age 35 are the most optimistic about their organization’s commitment to DEI, their Gen X counterparts (ages 46-55) are the most disappointed. This could be an indicator of experienced leaders’ frustration with slow progress or a feeling of being overlooked as many programs target younger workers.
- Inclusion doesn’t require an office. DDI’s data show that 34% of workers who work remotely report a strong sense of inclusion in their organizations, compared to only 29% of their peers who work in person. Among women leaders, only 21% who work in-person report a strong sense of inclusion.
- Preparing the next generation of diverse leaders remains a top concern. Burnout is soaring across all ages and demographics with over 75% of minority leaders and 72% of women leaders under age 35 feeling “used up” at the end of each day. The combination of childcare responsibilities coupled with pressure for younger leaders to portray perfection is likely driving this trend. To overcome this heightened risk of burnout, leaders should prioritize showing empathy, acknowledging their own vulnerability and shortcomings and inquiring about employees’ well-being.
Unfortunately, not every workplace shares these priorities. According to Deloitte, a lack of empathy and psychological safety topped the list as one of the most detrimental leadership behaviors to well-being in the workplace. Rather than shifting away from DEI investment due to a lack of immediate benefit, Chantalle Cuba recommends a three-step strategy for companies that want to be on the leading edge:
- “Encourage an audit of DEI plans and use this information to figure out what has been effective, what hasn’t worked and what can be more effective moving forward. Pausing and getting real feedback enables companies to realign to their core business strategies.”
- “Address the elephant in the workplace. Rather than being angry about it, acknowledge that it’s human nature for people to be cautious of others unlike themselves and that we’re in a different macro socio-political environment. It’s uncomfortable for anyone in a majority group to say, ‘I don’t think this is working’ or ‘I don’t think it’s worth the time or resources.’ That’s what good learning and organizational systems and leadership development are for—to help people who have a desire to grow or lead to acknowledge their biases, dialogue about them and move past them.”
- “Refocus on the strategies and budgets that are most important to your organization, team and clients. Create strategies that work in harmony with your business needs. Everybody can breathe a sigh of relief and feel comfortable that they’ve addressed the needs of stakeholders relative to what DEI means to the company, employees and customers.”
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