Since the November 2024 Presidential Elections, there has been much discussion and uncertainty about the future of diversity, equity, and inclusion (DEI) in American business. Many DEI professionals remain optimistic that their work can continue, although they expect the specifics of that work to adapt, given the changing landscape. More than ever, this work must be grounded in the imperative of business strategy.
H.R. 8706 Is An Early Anti-DEI Legislative Threat
Though much of the conversation focuses on the challenges that may come from the Executive branch, the efforts to derail DEI work are multipronged. For example, on November 20, 2024, the House Committee on Oversight and Accountability voted to advance H.R. 8706, the Dismantle DEI Act, out of committee. Whether or not Congress enacts this bill, its language offers valuable insights into how legislation will be part of the coordinated effort to end DEI work in the United States.
H.R. 8706, introduced in June 2024, is a sweeping bill that aims to roll back DEI initiatives within federal agencies and influence entities with federal contracts or funding. Although primarily aimed at federal DEI programs, H.R. 8706 contains provisions that could directly affect private companies and consultants. It also seeks amendments to the Civil Rights Act of 1964, the bedrock federal legislation that protects Americans from discrimination. For example, the bill aims to rescind executive orders promoting DEI, prohibit DEI training in federal agencies, and close DEI offices within federal agencies. It also aims to require federal contractors and grant recipients to comply with these same restrictions on training and DEI activities as a condition for receiving federal funds.
Consulting firms providing DEI services to the federal government could lose those contracts unless they reframe their offerings to avoid prohibited practices. For example, under H.R. 8706, a consulting firm that offers unconscious bias training or equity audits may need to discontinue these services to maintain eligibility for federal contracts. Similarly, federal contractors or grantees that employ DEI professionals might face challenges if they use federal funds to support DEI initiatives. For instance, a company receiving federal grants for workforce development programs may have to demonstrate that no portion of those funds supports DEI-related salaries or initiatives, which could result in scaling back such efforts.
Legislative efforts like HR 8706 are not the only efforts to change DEI work in the public sector. Some state governments have already proposed and, in some cases, enacted laws with similar goals to HR 8706. For example, Florida’s Individual Freedom Act restricted the DEI work in state-run entities like schools and universities and eliminated DEI state DEI departments. However, in July 2024, a Federal judge permanently overturned that law because it violated the First Amendment.
DEI Problems Remain Unsolved
Despite these efforts to delegitimize DEI work, the barriers and inequities that necessitate DEI persist. Gender parity in corporate leadership is still decades away. Fewer than 30 Black people have ever been the CEO of a Fortune 500 company, fewer than five of which are Black women. About half of employees from the LGBTQ+ population have negative experiences at work. About 25% of Black workers experience discrimination at work. Overall, significant disparities persist in wages and wealth for Black Americans because of systemic factors that have been resistant to improvement.
So, what can leaders do to continue this essential work despite the challenges?
Lead DEI Work Strategically, From The Top
While legislative efforts like H.R. 8706 are creating new challenges, many corporate leaders continue to advocate for the value of DEI. It has been reported that JPMorgan Chase CEO Jamie Dimon said in September at an institutional investors’ conference that “it’s good for business; it’s morally right; we’re quite good at it; we’re successful,” referring to the benefits of reaching out to a diverse range of communities. Dimon’s perspective reinforces that DEI is not just about ethics but also sound business strategy. As Charles Watkins, Shareholder and Chief DEI Officer at Kubicki Draper, said, “DEI isn’t a box to check—it’s a strategy for long-term innovation and success. Effective leadership is about building trust and consistency over the long term. Leaders must prioritize their people and their principles to sustain business growth.” DEI efforts will only succeed if leaders link them to the enterprise’s strategic goals from the very top of the house. Some leaders may use the political changes as their rationale for pulling back from this work. However, doing so may place them at a competitive disadvantage unless they have already created an inclusive work environment.
Understand How DEI Work Powers Business Success
Malobi Achike leads a technology firm that helps clients get the data to understand their unique DEI issues and then inform and effectively communicate their related decisions. She believes DEI work will persist in some form because the pushback is fundamentally flawed: it ignores data that clearly shows the realities of bias in various workplace decisions, especially hiring, pay, and promotion decisions. She also says that people often conflate DEI with affirmative action, believing that DEI work is about hiring people who are not qualified. She asks, “Name one hiring manager who would hire someone who could not do the job. They won’t do that because the work would fall back on them!” Watkins offered a similar sentiment, couching it in the language of sports. He said, “Look at the world’s biggest sports teams—Real Madrid, Chelsea, or Manchester United—they’re filled with talent from all over the globe: African, Asian, European, American, and Caribbean players. Why? Because their scouts are laser-focused on one thing: finding the best talent to win. They don’t care about a player’s background or color—what matters is whether they can perform at the highest level. It’s a universal truth: when you prioritize talent, you set yourself up to win and succeed financially.”
Focus on “Fit For Purpose” Rather Than “Best Practices” DEI
Rather than frantically searching for the “next best thing” that promises quick results, leaders should carefully define the problem they are trying to solve that falls into the DEI realm and look for bespoke solutions that align with their strategic vision and company’s values. Bernadette Smith, CEO of the Equality Institute, sees this in her work. Her clients take a pragmatic approach. They continue the work but carefully choose what they do and how they communicate.
One of my clients takes a similar approach with their employee resource groups (ERGs) (sometimes called business resource groups, affinity groups, etc.). They know that some organizations create these entities with no strategic purpose, and their work can quickly devolve into identity group separatism that runs counter to collaboration goals. To avoid this unintended negative consequence of ERGs, this client clarifies that their ERGs are for workforce development. So, all the work done within that group always ties back to the business strategy. Employees understand that leaders did not design these groups to be activistic but to help individual members access the organization’s opportunities more quickly.
In the four years since George Floyd’s murder, many well-intentioned leaders adopted “flavor of the month” DEI policies. Organizations will only progress on DEI efforts in this era when they clearly show how the work aligns with their strategic objectives to compete in a changing world. That is the business case for DEI in 2025.
This post was originally published on here
