Has DEI Changed the Workforce?

Despite immense investment into diversity, equity, and inclusion (DEI) initiatives over the past several years, and a backlash against those initiatives which has grown in recent months, it does not appear that they have changed the composition of the workforce substantially, as reported by the Wall Street Journal.

Following the murder of George Floyd in 2020, many businesses made public pledges to diversify the makeup of their leadership teams and broader workforces. And companies largely seemed to abide by those pledges, with total yearly spending on DEI initiatives estimated to have reached upwards of $7.5 billion. However, through an analysis of 13 million workers at S&P 500 companies, the WSJ found that this has not brought about the radical change that some might expect.

In 2020, white men comprised 32% of the combined workforce across S&P 500 companies, filling 55% of leadership positions. In 2023, those numbers were 29% and 50%. It is worth noting that the share of senior managers who are not white grew in those three years, from 22% to 26%. These gains were largely concentrated among Asian employees, with Black and Hispanic employees filling approximately 10% of leadership positions in 2023.

These changes are not negligible, but they are also not representative of the massive change to the workforce that some might have expected, either out of hope or fear. And, indeed, it remains to be seen how things change as companies retreat from their public diversity programs amid the current backlash.

Of course, even if companies back away from explicit diversity targets, there are clear benefits to those that embrace an inclusive culture across their workforce. If for no other reason, it helps to encourage collaboration which is key to achieving desired performance goals. In an article for Starling's 2021 Compendium, Harvard Business School Professor and Starling Advisor Amy Edmondson emphasized inclusion and 'belongingness' as the most important facets for improving employee experience and business success.

"A firm's culture must engender belonging and inclusiveness if different views are to be expressed and heard," Edmondson wrote. "Key to this is creating psychologically safe and high trust work environments. Leaders who appreciate this, therefore, will not hire for diversity alone. Rather, they will attend to psychological safety throughout their organizations: measuring it, managing it, and looking for it among all employees." ▸Read More