DE&I seems to be slowly falling off the C-suite to-do list

What happened to the billions of dollars companies pledged to spend on racial equity in the wake of George Floyd’s murder?

Consultants at Creative Investment Research (CIR) counted that 271 US corporations had made DE&I pledges relating to racial justice since the summer of 2020 worth an estimated $67 billion. The CIR told The Financial Times that by the beginning of this year, some companies had spent just $652 million.

That’s less than 1% of what was promised.

“They haven’t really done anything that would lead one to believe that they are committed, with some exceptions,” William Michael Cunningham, CIR’s CEO, told the Financial Times.

While corporate DE&I pledges, in Cunningham’s words, have largely “petered out” since 2020, public support for initiatives and corporate action regarding racial equity in the workplace has ramped up: 92% of Americans surveyed for Just Capital’s Corporate Racial Equity Tracker said that “it is important for companies to promote racial diversity and equity in the workplace,” up 13 points from last year. Nearly seven in 10 Americans said companies have “more work to do.” Among Black Americans surveyed, that number jumps to almost nine in 10.

With those statistics in mind, keeping promises to promote racial equity in the workplace seems like a good area for HR to keep their focus on. So, what’s the hold up for some of these companies? Experts told HR Brew that short attention spans and fear of alienating staff can keep programs from taking flight, but slight tweaks in approach can make a difference.

Goldfish brain. Donald Sull, a senior lecturer at MIT’s Sloan School of Management, uses AI to study corporate culture. In 2020, his team compared over 500 company core value statements with employee Glassdoor reviews to find a relationship between the type of culture leaders said their organizations had and how it was perceived by workers.

Sull came to a puzzling conclusion: when it comes to diversity, the relationship was negative. If companies claimed to value diversity, employees felt the culture lacked it.

In his opinion, the disconnect doesn’t come from a lack of good intentions—it seems more likely to come from CEOs’ lack of sustained attention. Sull said DE&I is often one objective of many. Add in political polarization, the war in Ukraine, and inflation, and Sull said DE&I has “enormous competition for real estate” on the CEO’s agenda. In order to keep DE&I on the radar, he suggests quantifying the cost of not acting. “In the face of all this jostling for…prioritization and attention, you need to document what are the costs of not [taking action],” Sull explained.

In Sull’s opinion, CEOs should consider the impact failing to uphold DE&I has on attrition and differential attrition (the quit rates for key demographic groups, such as women).

In a March 2022 analysis of 1.3 million employee Glassdoor reviews, Sull’s team found various forms of noninclusivity, such as LGBTQ, racial, or gender inequity, were collectively “the most powerful predictor of whether employees view their organization’s culture as toxic.” That is a problem, Sull explained, because it strongly predicted employee turnover, at least during the first six months of the Great Resignation. Replacing an employee can cost a company as much twice their annual salary.

Hard pass. While some employees welcome DE&I programs with open arms, others may sulk in conference room chairs with arms folded across their chests.

According to a May 2022 survey of over 3,500 global employees by Gartner, 44% said a “growing number” of their coworkers felt “alienated” by corporate DE&I initiatives. Some 42% said their colleagues viewed the programs as divisive, and 42% said “their peers resent DEI efforts.”

Jarik Conrad, VP of human insights and executive director of the Equity at Work Council at Ultimate Kronos Group (UKG), is no stranger to DE&I skepticism. He has given corporate workshops on DE&I for years and, until recently, didn’t utter the word “diversity” in sessions. He found the word often elicited an emotional response.

During a session at the annual SHRM 2022 conference, Conrad explained how for employees who, for example, live paycheck to paycheck and lack social safety nets, learning about DE&I may feel overwhelming.

“We can show all the data, we can preach, we can do everything they can, they’re not going to pick this stuff up,” Conrad told HR Brew. “People are struggling. We’ve got to acknowledge when somebody is checked out, it doesn’t necessarily mean they’re racist or sexist.”

Instead of focusing on DE&I “awareness,” such as information about policies and definitions of terms, Conrad wants DE&I advocates to focus on building skills, specifically emotional intelligence.

“If I can give them the skills to be able to deal with that on the front end, now I can get somewhere as we talk about the rest of it. So it’s critically important to understand my emotions and how they’re trying to influence me,” Conrad said.

Eyes on C. The ebb and flow of the news cycle can push leadership’s foot on and off the gas pedal on the road toward workplace equality. Though all eyes may not be on corporations like they were two summers ago, some, like those of CIR, still are.

Sull said the CEOs he encounters are aware. They regularly tell him how their jobs have changed from five or 10 years ago, when many decisions impacting DE&I were made without disclosure or scrutiny. He thinks the public focus is a good thing.

“Sunlight’s the best disinfectant,” Sull said.—SV

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