The Secret Service failures during the near assassination of former President Donald Trump have once again shone the spotlight on so-called DEI hiring, with Director Kimberly Cheatle being accused of being a box-ticking diversity hire. This Washington Examiner series, Alphabet Soup, will take a closer look at whether the DEI chickens have come home to roost in the federal government, whether the private sector has finally had enough, and if the much-maligned term is here to stay, or if it will simply morph into something else altogether. Part 2 will look at the private sector.
After years of Wall Street and corporate America embracing diversity, equity, and inclusion, the tides now appear to be shifting, and some companies are beginning to de-emphasize or reorganize their DEI efforts.
Corporations have long advertised their diversity initiatives and intensified those efforts following the murder of George Floyd in 2020. In the years since, critics have said the initiatives and new DEI hires are proof that Wall Street has gone “woke.”
Now, the pushback appears to have reached a boiling point following a concerted effort from Republican politicians, corporate watchdogs, and conservative legal groups. Some corporations have reorganized their DEI departments, de-emphasized them, or even disbanded them in recent months — all amid one of the most divisive election years in modern history.
PART 1: FEDERAL FAILURES DEEPEN SKEPTICISM OF DEI
“I think it absolutely is a pronounced shift,” Will Hild, executive director of the conservative nonprofit group Consumers’ Research, told the Washington Examiner. “I think it’s important not to overstate it, I think a lot of the people that have pushed the DEI industrial complex are still trying to figure out a way to keep it alive.”
The latest blow to the DEI movement came when Microsoft reportedly fired its DEI team. In an email reported by Business Insider, a Microsoft “team leader” wrote: “True systems-change work associated with DEI programs everywhere are no longer business critical or smart as they were in 2020.”
A Microsoft spokesman told the Washington Examiner, though, that it continued to do “D&I” work through the “Global Talent, Development, Diversity and Inclusion team.” The company also criticized the reporting from Business Insider as “misleading.”
Notably, Microsoft left out the E in DEI — “equity.” Hild said eliminating the equity portion of DEI has been a growing trend.
“You’ve seen a lot of companies get rid of the E, the equity, because the equity is basically an excuse to push for equal outcomes, rather than equal opportunity, which is illegal,” he said.
The Society for Human Resource Management, the largest human resources association in the world, also removed “equity” from its diversity agenda. SHRM announced it will rebrand its efforts as “I&D,” which stands for inclusion and diversity.
“By putting inclusion first, we aim to address the existing flaws in DE&I programs, which have caused societal backlash and increased polarization,” the group said.
Deere & Company, the maker of John Deere tractors and other farm machinery, recently scaled back its DEI initiatives as well. The company said it will no longer sponsor “social or cultural awareness” events.
“To best serve our customers and employees, Deere is always listening to feedback and looking for opportunities to improve,” the company said in a statement. “That’s why we consistently prioritize internal policies that more closely align our business strategy to meet the needs of our customers.”
Tractor Supply announced in June it was gutting much of its DEI positioning. For instance, it will refocus its team member engagement groups, eliminate DEI positions and goals, stop sponsoring nonbusiness activities such as voting campaigns and gay pride festivals, and withdraw its carbon emission goals.
Zoom, Snap, Tesla, DoorDash, Lyft, Home Depot, and Wayfair have also shrunk their DEI teams, the New York Post reported.
Hild said the shift away from DEI has been “a death by 1,000 cuts.” He pointed out the efforts of his group and others to focus on the issue and generate pushback.
Efforts to push DEI have also backfired for some companies. For instance, Budweiser faced a massive boycott push after it partnered with a transgender social media influencer.
Maurice Cayer, a professor at the University of New Haven who has been a consultant to various Fortune 100 companies on human resources and organizational transformation projects, said that while the pendulum is swinging back a bit in terms of scaling back DEI, a more apt metaphor is “two steps forward, one step back.”
While there has been definite scaling back in the corporate DEI domain, Cayer said, corporations are still focused on ensuring their companies are diverse and accepting.
Cayer said he recently asked a contact at a large defense contractor about the shift and that “it’s clear that they believe in their heart of hearts that they are steadfast in their belief in diversity, equity, inclusion.”
“They’re going to continue pursuing it, even if it doesn’t have the flag being raised, if you will, on DEI issues,” he said.
Jobs in the DEI space spiked in 2020 and 2021 amid the fallout from the death of Floyd and subsequent attention surrounding the matter of race in America.
Since then, though, job postings for DEI roles on job-finding websites have plunged, according to the New York Times. The number of DEI job postings on ZipRecruiter dropped a notable 63% last year — although factors such as a weakened tech sector could have contributed to that decline.
Another acronym, ESG, is inherently bound to DEI.
ESG, which stands for environmental, social, and governance, is a financial concept that centers on compelling social change through investment and divestment. It is a corporate model that doesn’t solely look at maximizing profit but also incorporates other elements into financial decisions — for instance, a company’s commitment to diversity, which could fall under the social or governance umbrella of ESG.
When companies are scored for their ESG ratings, DEI efforts are often included in the metric for how the companies are graded.
Just like DEI, Republicans have launched a broader attack against the ESG movement, with ESG in some cases being used as a catchall phrase for corporate policies that opponents of the concept see as “woke” or inherently liberal in nature.
Republican state officials have argued that ESG practices run counter to the traditional investment model of working to maximize shareholder value. They also have argued that firms including BlackRock and some of the big banks have worked to use ESG strategies to “blacklist” controversial industries that focus on things such as fossil fuels and firearms.
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And the criticism has been noticed in boardrooms throughout the country.
The Conference Board recently surveyed executives at companies across the United States. Of those surveyed, a notable 61% of companies said they expect the backlash to ESG to persist or intensify over the next two years.