Despite the backlash, it’s time to double down on diversity in business

In the current climate, it’s crucial for business leaders to lean into the tangible benefits of DEI, write Cat Ward and Michael Collins of JFF.

With the U.S. Supreme Court’s decision to ban the consideration of race in college admissions, many fear the recent backlash against corporate diversity, equity, and inclusion initiatives will only accelerate. In this climate, even the mere mention of the term “DEI” has become a political lightning rod. But let’s remember why employers adopted DEI policies and practices in the first place: because a diverse, equitable, and inclusive workplace is both a moral and a business imperative.  

In a moment like this, it’s crucial for business leaders to lean into the tangible benefits of a well-rounded DEI strategy. The evidence is clear: shareholders and customers alike derive enormous value from corporate diversity efforts, including more effective decision-making capacity, greater profitability, enhanced product innovation, and better customer experience.  

Companies that walk away from their values now also will be walking away from the near-term profits and long-term business value of diversity initiatives that are critical to future-proofing their organizations. Here’s the bottom line, literally: 

  • A study by McKinsey & Company found that companies in the top quartile for ethnic and racial diversity in executive teams were 36% more likely to have above-average profitability than companies in the bottom quartile.
  • Furthermore, gender-diverse executive teams were 25% more likely to experience above-average profitability.  

It’s important to note that the high court’s decision on college admissions has no immediate bearing on many corporate affirmative action and DEI practices. Documenting annual affirmative action plans for federal contractors, investing in employee resource groups, providing mentorships and talent development opportunities, supporting inclusive hiring and promotional opportunities for underrepresented worker populations, and implementing unconscious bias training programs remain untouched.  

Yet many corporate leaders are concerned the decision might embolden politically motivated challenges to DEI initiatives not just on campus but also in the workforce, making it more difficult to create diverse and inclusive workplaces. Some of their concerns may hold merit: a Harvard study found that when states repealed affirmative action hiring requirements for public-sector jobs, they observed “a significant decrease in workplace diversity, compared to the states that kept affirmative action programs in place.” The report also found that the workers most impacted by those statewide affirmative action bans were Asian, Asian American or Pacific Islander women, Black women, and Latino men.   

Corporations including Target, the North Face, and Chick-fil-A have also faced boycotts and online attacks —a trend that may continue to affect employers if the court’s rollback of affirmative leads to further criticism and consternation surrounding corporate DEI programs.  

It’s a challenging environment for launching and sustaining a corporate DEI initiative—which is why a thoughtful communications strategy rooted in DEI’s business value has the potential to reinvigorate both internal and external commitment. Rather than viewing the current environment as a threat requiring a retreat, the most successful companies will focus on the opportunity to double down and communicate DEI’s true business value.

We know that companies that invest in diversity improve decision-making by tapping into a broader range of perspectives and ideas that allow them to thoroughly test their business strategies before taking them to the customer. Investing in diversity also helps companies attract and retain top talent. A survey by Glassdoor found that 76% of job seekers consider a diverse workforce an important factor when evaluating potential employers. 

In today’s competitive landscape, where talent pipelines are strained and companies must continuously adapt and innovate to stay ahead, job applicants are clearly telling us DEI initiatives are important to their decisions about where and for whom they want to work. Diversity also spurs innovation and boosts the bottom line. 

Research from Boston Consulting Group (BCG) reveals that companies with more diverse management teams are far more likely to be generating revenue through innovation than are those with less diverse teams. Companies with above average diversity scores derived 45% of their revenues from new products and services, compared to only 26% for those with below-average diversity—that’s an astounding 19 percentage point difference. In other words, diverse companies are adapting and thriving, while others are stagnating.  

By emphasizing the business case for diversity, we help people understand that DEI is not just a box to be checked or a political fight to be won, but an essential driver of success in modern business.  

Cat Ward is vice president of employer mobilization at Jobs for the Future and Michael Collins is vice president of the organization’s Center for Racial Economic Equity. 

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