Corporate DEI roles have faced serious headwinds since the Supreme Court’s ruling against race-based admissions programs in 2023. From their peak, headcount in DEI roles is down roughly 10%. These departments play an important role in ensuring that diversity, equity, and inclusion initiatives are created and enacted within the workplace. Firms, however, are juggling backlash and reverse discrimination lawsuits in this new legal environment. How can your organization remain resilient when it comes to your DEI corporate strategy and goals in the current environment? We break down key corporate DEI strategy considerations below. 

The Benefit of Corporate DEI Strategy 

It’s no secret that the importance of DEI has grown tremendously in recent years. From 2022 to 2023, 75 more Fortune 500 companies have published annual DEI reports. Additionally, many companies have chosen to incorporate DEI officers as a standalone role. Between July 2021 and July 2022, for example, DEI-related job postings jumped nearly 40%. DEI-related job functions often include policy development, employee training and hiring, and promoting a diverse workforce.  

Historically, we know that DEI officers have contributed to more inclusive and diverse workplaces. Studies have shown that more diverse management teams have nearly a 20% lift in revenue. That said, diversity in a corporate space has been historically thought to positively impact business.  

Current Climate for Corporate DEI  

The Supreme Court’s 2023 ruling on the legality of race-based admissions to college has reopened debates about the role of DEI in the workplace. As a result, many states have begun closing DEI related programs and funding. Notably, even the U.S. House of Representatives’ Office of Diversity and Inclusion was cut in 2024. 

This shift away from DEI in corporate strategy may have several negative effects. In the near-term, employees may feel that their employer no longer supports the values that are important to them. Employees, especially from marginalized or minority backgrounds, may no longer feel that the firm aligns with their goals. Consequently, these contributors may choose to leave the firm–a tough prospect for firms in the current hiring landscape.  

In the long-term, there may be serious shifts in firm culture. Increased discrimination in the workplace, talent loss, hiring difficulties, and a negative perception of the company’s reputation are notable possibilities. 

Firms that currently have DEI offices may be considering this shift in strategy largely due to potential lawsuits. For example, cases of reverse discrimination can land firms in court for unfair hiring practices. This does not mean, however, that there aren’t options to retain DEI initiatives.  

Remaining Resilient  

Even if a DEI office is closed, programs and initiatives can be embedded within broader corporate strategies to ensure firm values are still met. 

When thinking about the end-to-end employee experience, all of the strides forward that organizations have made won’t be lost. For example, employee onboarding should still include implicit bias, ethics, and firm values training. 

We know the value employee resource groups (ERGs) bring to organizational culture and sense of belonging. These groups should still be prioritized and kept active, even if budgets are reduced. 

It’s also vital for leadership to actively create a culture of inclusivity and equitable opportunity for all current and prospective employees. This should be communicated effectively to those in management and hiring roles.  

DEI can also be woven into other various cultural touchpoints within the organization. For instance, performance reviews and career development discussions should include DEI goals to emphasize fairness and support diverse talent progression. Company events, celebrations, and communications can highlight different cultural backgrounds, values, and achievements, fostering a greater sense of community. DEI principles should also be considered in the design of physical and virtual workspaces to create accessible environments that respect and accommodate diverse needs. 

Corporate DEI Strategy Considerations Next Steps 

Ultimately, the shift away from DEI offices may be inevitable as firms fear legal backlash. This does not mean, however, that DEI initiatives and values should disappear from corporate strategy. Instead, embedding DEI within firm culture, leadership, and stated strategy can ensure continuity of important programs and values.  

A shift away from DEI without active planning for continuity can have negative effects for a firm’s talent, reputation, and financials. It’s imperative for leadership to commit to the importance of DEI and find innovative ways to integrate these principles with or without specialized offices.   

Not sure what’s next for your DEI strategy? Get in touch with our DEI experts today for additional guidance. 

Contributions from Jake Park-Walters