Can workplace DEI initiatives survive economic volatility?
In 2020, diversity, equity, and inclusion (DEI) gained significant momentum as the world faced both a pandemic and a racial justice movement. These events highlighted and exacerbated workplace inequities, while simultaneously drawing attention to a broader understanding of what diversity means and requires.
As a result, many companies committed to tackling critical DEI work to ensure greater support for employees with diverse backgrounds, genders, caregiving responsibilities, perspectives, and more. But, as with most movements for change, DEI initiatives have weathered ongoing political backlash and criticism — to the point where even DEI professionals now feel some level of fatigue and cynicism about the future resiliency and lasting impact of workplace DEI programs. And that was all prior to economic uncertainty taking hold in late 2022.
With inflation and budget anxiety forcing companies to limit spending, DEI initiatives are at risk of deprioritization. Paring back DEI resources in favor of preserving funding for more traditional business objectives may feel like a reasonable trade-off on paper. But what impact does it have on employees’ headspaces in a tight labor market — and in the era of quiet quitting?
Against this backdrop, we sought to understand the current state of DEI in the workplace from an employee perspective. To this end, we surveyed 1,000 full-time U.S. employees about their attitudes toward their employers’ DEI initiatives and how current economic conditions are shaping their viewpoints and hopes.
Our data revealed unwavering support for DEI among employees in 2023 — and a strong desire to see employers double down on DEI efforts despite the challenging economic climate.
INSIGHT 1
DEI remains a priority for employees, despite an uncertain economic outlook
Employees have bought into the idea that workplaces are environments for social change. Across the board, DEI is a focal point for employees in 2023, regardless of geographic region, gender, race, or ethnicity — and 90% of respondents say they have personally benefited from DEI initiatives at work.
Given the widespread benefits of DEI, employees are eager for corporate leaders to continue prioritizing DEI work, with two-thirds (66%) of respondents believing their company should commit more time and resources to DEI initiatives than they currently do. In comparison, only 5% of respondents believe employers should commit fewer resources to DEI.
And this is true even in the face of economic uncertainty.
Despite ongoing budget cuts and shaky revenue projections, employees are adamant that DEI initiatives remain at the top of company leaders’ priority lists. So much so that two-thirds of respondents (62%) believe employers should dedicate more effort than usual to DEI over the next 12 months given the current period of economic uncertainty.
Likewise, workers expect company leaders to go beyond embracing diversity principles and play an active role in educating staff on how to be inclusive colleagues — 92% of respondents agree companies have a responsibility to help all employees become aware of their biases.
But corporate leaders may need to do more to show their support for DEI work. When asked who at their organization cares about DEI the most, respondents were far more likely to select “myself” over either HR or C-suite/senior leadership. For HR leaders, this may indicate a need to take additional steps to ensure their company’s DEI efforts feel authentic and inclusive. HR leaders should look for opportunities to demonstrate their commitment to DEI and ask themselves what it would take to close this gap.
INSIGHT 2
DEI is critical to attracting and retaining talent
Following years of high employee turnover and a shifting model of work, business leaders are going back to the drawing board for new ideas to boost employee retention.
While salary and well-defined roles and responsibilities will always remain core components in workplace selection, there’s been a sharp increase in the evaluation of how employers act, what they say, and how they engage with the world around them. In 2023, DEI isn’t just nice to have — it’s a business-critical investment for employers seeking to attract and retain top talent. In fact, the vast majority (95%) of employees now weigh a prospective employer’s DEI efforts when choosing between job offers with similar salary and benefits.
Trust is another top reason employees put so much stock in an employer’s (current and potential) DEI work. More than 90% of respondents agree companies with strong DEI commitments are more trustworthy to customers and employees. A similarly overwhelming majority (87%) agree they would feel more loyal to a company with a proven track record of prioritizing DEI.
But perhaps more notable is the number of workers who say they would reject an employer based on its DEI performance: Three-quarters of employees (78%) agree they would not consider working for a company that fails to commit significant resources to prioritizing DEI initiatives.
So how can employers show current and prospective employees they take DEI seriously? Employees say tactical concerns — including unbiased hiring practices and salary transparency — are currently the most impactful DEI initiatives. And it’s no coincidence these are often the first steps companies take when overhauling policies to boost diversity and equity among their workforce.
But once workers’ needs in terms of compensation, schedules, and career progression are met, company leaders should ask themselves what the next steps are in cultivating a workplace culture where every employee feels a sense of belonging.
INSIGHT 3
Employee resource groups (ERGs) are a source of business and employee value
Employee resource groups (ERGs) and similar affinity groups are voluntary, employee-led groups designed to foster connections based on shared characteristics or lived experiences (e.g., LGBTQ+, People of Color, Women, etc.).
These employee-organized groups are becoming more widespread, with 70% of employees reporting they have worked for a company offering ERGs or affinity groups at some point in their career. Among employees who have worked for an employer with ERGs/affinity groups, 62% have participated — indicating strong interest from workers.
ERGs present myriad benefits, chief among them the opportunity to connect with, learn from, and support fellow colleagues. The majority of ERG members (78%) said one of their top reasons for joining an ERG was to connect with colleagues with similar lived experiences — but close behind were the ability to connect with colleagues with different lived experiences and to build allyship with diverse colleagues. This speaks to the ability of ERGs and similar affinity groups to provide avenues to support both diversity and inclusion in the workplace.
What’s more, ERGs receive ringing endorsements from employees. An overwhelming majority of respondents who have worked for companies offering ERGs or similar affinity groups agree these resources have a positive impact on belonging, inclusivity, and well-being. And the benefits go beyond personal engagement and development — they improve company culture overall, benefiting ERG members and non-members alike.
Now is not the time to pull back on DEI work
Companies that fail to commit to building an inclusive workplace culture miss out on top talent in a tight labor market. Today’s employees believe companies have a responsibility to invest in DEI and help workers become aware of their unconscious biases. Employees’ DEI expectations remain high even in a volatile economy — and they’re willing to pass on employers that aren’t taking serious action.
Top-down initiatives such as unbiased hiring practices and salary transparency will always be important, but among the top opportunities, employee-led initiatives such as ERGs and affinity groups stand out. These resources provide opportunities for peer connections and personal growth, which support employee well-being and belonging in addition to building inclusive and equitable workplaces.