Donald Trump’s assault on Diversity, Equity and Inclusion (DEI) in the US has led to a constantly changing debate on the issue on both sides of the Atlantic.
High-profile companies including McDonalds and Meta have rolled back DEI policies while Apple, Cisco, Costco and others have made public commitments to retaining them. The most common response in the US has been for companies to change what they are saying publicly about the issue. This is understandable given the fear of losing federal government contracts.
In the UK, there has been a steady stream of media coverage about DEI with commentators demanding a rethink while others want firms to resist the urge to change course.
Fears that public services may be discriminating against white candidates in the push to improve opportunities for people from minority backgrounds have been raised despite little evidence to prove this is the case. But such reports uncover a lingering doubt that DEI has gone off course. This is worth considering.
Firstly, it is important to note that, in the US, talk about DEI almost always refers to the setting of targets for the employment of certain under-represented groups and using affirmative action – positive discrimination – in the recruitment process.
In the UK, the law is different and does not allow affirmative action. Positive action can only be practised in a small number of specialist cases. For example, this could be where the work is exclusively with one community, or where there is a clear need for the postholder to know and ideally come from a community to be able to do the job. If there is a tie in a recruitment contest where both candidates score equally it is possible to give preference to the candidate from an under-represented group. In general, UK companies can set targets and report on them but cannot exclusively recruit from certain groups to meet the targets.
Secondly, the Labour government elected last year is committed to increasing equality and diversity, including both in a definition of Social Value set in the procurement process for public-sector contracts. Ministers are also committed to including mandatory reporting on race and gender for companies as part of employment rights legislation.
Both law and culture are different in the UK compared to the US. Any company wanting to apply for a central or local government contract in the UK faces being penalised if they roll back DEI policies. This was seen in the case of Accenture being blocked from bidding for a Transport for London (TfL) contract after the American consultancy scaled back its DEI commitments. Companies operating in both the UK and US could have a challenge maintaining their commercial positions while having to face two ways on this issue.
What should companies do about DEI?
Firstly, they should avoid making rash decisions as the situation is still evolving. White House executive orders are addressed specifically at excessive DEI use, not DEI initiatives in general. Companies continue to have legal obligations to treat all staff equally.
Secondly, they should use the situation to assess why the DEI work is being done in the first place. If it is genuinely part of the identity and values of an enterprise, dropping DEI now will be seen as a cynical decision that could be damaging to reputation. Companies only committed to DEI for the sake of compliance probably don’t care about their reputations anyway. But they should be aware that their reputation will still take a hit with customers and staff.
Thirdly, companies need to be smart about communications. Some have rebranded their approach, deleting the words diversity and talking about inclusion or talent management instead while continuing with the same work in practise. While this may seem like cowardice to some, it may be the commercially sensible thing to do to ride out the current storm.
This episode has highlighted widespread misunderstandings about what DEI means in the UK. Many people think positive discrimination is legal and practised widely despite the opposite being the case.
Demographic change means that while the highest levels of most institutions are still dominated by white, middle-class men, the situation is more complex than in the past. Recent results in education show that, by the end of secondary school, pupils from some ethnic minority backgrounds tended to be ahead of White British pupils academically.
Chinese pupils were on average over two years (27 months) ahead of white British pupils, whilst Gypsy Roma pupils were two and a half years (30 months) behind. Between 2019 and 2023, pupils from all ethnicities other than White and Black Caribbean and White Irish pupils improved attainment relative to White British pupils.
Ethnic minorities account for 11% of senior management in FTSE 100 companies and 9% for those in the FTSE 250, falling short of the 17% in England and Wales. Girls outperform boys across all education phases despite the 7% gender gap in terms of pay. These statistics give a mixed picture of what happens once pupils leave school and enter the workplace.
Traditional views about which groups fit into which box clearly do not apply any more. Gender or ethnicity alone do not necessarily disadvantage people, but class may. There are also many regional variations.
DEI needs to be broader than in the past and include those who traditionally feel left out of diversity initiatives. Many companies already recognise this and have already changed their work without altering the communication around it. Perhaps that is what needs to change.
Diversity has become slang for fears about ethnic minorities or transgender people, so maybe inclusion, which is about encompassing a wider group, needs to be the term that is used. Whatever the result, acknowledging and being open to change is needed in a time when there is a growing feeling amongst traditional white communities that they are being left behind.
While many people see Trump’s approach to this issue as unwelcome, perhaps the opportunity to develop a more inclusive and widely accepted approach to DEI should be embraced.
For more information about how we can help you navigate through these issues, contact our Managing Director of Social Value, Farzana Hakim, at [email protected].
