Why Companies Can — and Should — Recommit to DEI in the Wake of the SCOTUS Decision

The recent U.S. Supreme Court decision banning affirmative action, specifically race-conscious admissions in colleges and universities, may not directly impact U.S. workplaces, but there’s no question that corporate America needs to consider the effect this — and potential future judicial rulings and state legislation — will have on their DEI practices. At a minimum, any changes we see in student body composition at institutions of higher education will also affect hiring pipelines. For example, when the University of California’s system eliminated affirmative action in 1995, Black student representation at UCLA dropped from 7% (compared with 13.6% for the U.S. population and 6.5% for the state’s) to 3.9% in just three years and to less than 2% by 2006. Likewise, when affirmative action was banned at the University of Michigan, Black undergraduate enrollment declined from 7% in 2006 (compared with 13.6% for the state population) to 4% in 2021. These case studies suggest that when universities eliminate affirmative action, they produce a less diverse candidate pool for employers to tap, and this is now likely to happen across the country. Exacerbating the situation, there are also now more than 30 state or local bills targeting DEI funding, practices, and promotion at schools. For example, Texas has a ban beginning January 1, 2024, on all DEI offices, diversity training and “ideological oaths and statements” at public institutions, which could mean that companies recruiting on campus need to review their messaging. There is much more at stake than diversity recruitment, however. As management thought leaders and expert scholars on race in the workplace, we anticipate many additional ripple effects. The ruling has already been interpreted as an invitation for DEI critics to challenge the validity, legality, and necessity of such efforts. For example, Will Hild, the executive director of Consumers’ Research, a right-wing advocacy group, has already gone on record to say that the SCOTUS decision on affirmative action “will put the wind in the sails of groups like ours, who want to get the woke, racially based hiring and promotion schemes out of corporate America.” The attorneys general of 13 Republican-led states have also sent a letter to the CEOs of Fortune 100 companies warning that labels of “diversity, equity, and inclusion” are now “unlawful and wrong, per SCOTUS. Of course, college admissions are governed by Title VI of the Civil Rights Act, which prohibits discrimination on the basis of race, color or national origin under any program or activity receiving federal financial assistance. Private employment falls under Title VII and is enforced by the U.S. Equal Employment Opportunity Commission (EEOC), currently led by Charlotte A. Burrows, who has emphasized that the SCOTUS decision has no bearing on its work. In a statement, she said, “It does not address employer efforts to foster diverse and inclusive workforces or to engage the talents of all qualified workers, regardless of their background. It remains lawful for employers to implement diversity, equity, inclusion, and accessibility programs that seek to ensure workers of all backgrounds are afforded equal opportunity in the workplace.” That means most corporate DEI efforts are formally safe for now. However, it’s important for organizations to pay attention to the changing landscape. Taking a Step Back First, let’s consider whether we still believe race should be considered when making organizational decisions. That depends in part on whether we believe racism still affects our society. If we do, it seems plausible and just to recommend interventions that consider race. If we don’t (or if we are okay with racism), it would seem implausible and unjust to recommend interventions that consider race. So, we ask you, does racism still affect our society? And do we care? Consider the systematic oppression of Black Americans, who have long been erroneously held up as the face of affirmative action in the United States (while research shows that white women are instead the biggest beneficiaries of such policies). Even after the abolishment of slavery in 1865, the United States continued to codify the oppression of Black people in legal, political, and social systems. From the post-war Black Codes to the 1896 Plessy v. Ferguson SCOTUS decision to Jim Crow laws in the U.S. South, white power structures denied Black people full citizenship and equal protection under the law. Counter measures, including Congressional actions such as the landmark 13th, 14th and 15th Amendments, the Supreme Court’s 1954 Brown vs. Board of Education decision, and the Civil Rights Act of 1964, which finally banned racial discrimination from public places, schools and workplaces, represented progress. However, having been denied the ability to advance professionally and create wealth for more than a century post-slavery, Black people remain disproportionately underrepresented in professional workplaces and leadership roles. As fellow researchers Tony Mayo and Laura Morgan Roberts have described, they are less likely than their white peers to be hired, developed, and promoted. Other racioethnic populations — Latino, Native American, Pacific Islanders — have faced different types of discrimination and are also underrepresented in higher-earning roles and occupations, according to data from the Bureau of Labor Statistics and industry groups. This suggests that racism does still affect our society. The United States is not living up to its founding ideals of allowing all citizens to pursue life, liberty, and happiness in equal measure. We should care — and keep working toward those goals. A next question to ask is whether we believe diverse teams benefit organizational performance. Ample research shows that they make smarter decisions and better investments, are more adaptable, and drive innovation when the corporate culture in which they operate is a supportive, psychologically safe one. Diverse and well-trained workforces and leadership teams are also better suited to interact with diverse employees, customers and vendors. Thus, there is still both a moral and a business case for supporting DEI efforts. Some corporate leaders still might be wondering whether they should rethink their whole DEI strategy in light of recent attacks on affirmative action. The short answer is no. Now is not the time to reverse the commitments they made to racial equity in the aftermath of George Floyd’s 2020 murder. Instead, it’s time to clarify organizational values around DEI, clearly communicate them, and ensure that people management processes are aligned with them. Here, we explain how to go about this at this critical moment in U.S. history. Rethinking Labels Given the SCOTUS ruling, other pending state legislation, and the warning from those 13 attorneys general, some legal scholars have suggested that companies preemptively protect themselves by moving away from DEI labels to ones clearly protected by law. For example, instead of a chief diversity officer, you would have a Title VII compliance officer. Another option is to use words like “inclusion,” “belonging,” and “engagement” to emphasize that the goal is improving organizational culture not necessarily racial diversity. We urge caution on this front because DEI remains important to employees. For example, a 2023 Benevity survey found that 95% of people weigh a prospective employer’s DEI efforts when choosing between job offers with similar salary and benefits and that 78% would not consider working for a company that fails to commit significant resources to DEI initiatives. Employees from historically marginalized backgrounds will almost certainly feel disregarded and devalued if their organizations shy away from DEI labels. That said, any good DEI strategy requires regular evaluation to ensure it is performing against goals set and having the intended impact on employees. And when faced with a big organizational change or new rules and regulations, leaders should have a system in place to tune-up existing DEI strategy. Reviewing Processes Recruitment As highlighted earlier, we can expect a smaller percentage of racially marginalized individuals to be admitted to predominantly white institutions (PWI), so companies still seeking diversity in their candidate pool will need to look elsewhere to find as much of it. One solution is to increase recruiting at institutions such as historically Black colleges and universities (HBCUs), Hispanic-serving institutions (HSIs), and tribal colleges and universities (TCUs). Another is to consider non-traditional pathways such as community colleges and building partnerships with community organizations that focus on racially diverse pipelines, such as OneTen. We also recommend a shift to skills-based hiring, a well-established DEI best practice that focuses on matching skills between job candidates and roles instead of focusing on only education and experience. Consider partnering with organizations like STARS, MLT, ROMBA, Toigo Foundation and Forte Foundation (full disclosure: the latter two are clients of Tina) that help identify talent employers need. Onboarding Many companies now include DEI education as part of their onboarding programs. But they can no longer make assumptions about employee readiness for these conversations. For example, a student educated at a public institution in Florida is now expressly prohibited from taking a course that “teaches identity politics, or is based on theories that systemic racism, sexism, oppression, and privilege are inherent in the institutions of the United States.” Employers might therefore need to implement surveys to understand how much new hires know about DEI and take greater care in explaining to new team members why those principles matter to the organization, not just how they’re implemented. Performance reviews, pay, promotions As DEI efforts become more highly scrutinized, there is even more reason to make sure your people processes are equitable. Performance evaluations and pay and promotion decisions should be based on standard and objective data — yet a multitude of research indicates that they remain riddled with bias, especially for members of historically marginalized racioethnic groups. For example, one study found that 90% of people of color but only 72% of white people received notes about their personalities in their reviews. Now is a good time to audit these processes so no one can argue that you are favoring people of one race over another. Communicating Carefully If public polling is any indication employee reaction to the affirmative action ruling will depend on their race and ethnicity, political affiliation, and how they have seen affirmative action framed. Adept managers should be able to surface and address different opinions, show empathy, create employee feedback and support systems, and regularly communicate about these issues. Tools to use include one-on-one meetings (if a few employees are highly concerned); town halls (if many people are worried); emails (if many people have low-intensity interest); or simply monitoring the situation for now (if awareness remains low among most people.) Conversations might be difficult, but it is important for teams to dig into sometimes polarizing topics, bridge divides, and agree on collective action where possible. A cornerstone of successful communication is to include research from credible outlets but, in these polarized times, it can be challenging to find sources trusted by all employees. We recommend identifying multiple ones and explaining the vetting process to employees. Organizations will also benefit from conducting surveys to learn about differing views and identifying and seeking input on informal leaders on all sides. With both facts and opinions in hand, leaders will be better equipped to communicate effective messages about their DEI plans. They might, for example, acknowledge that some employees disagree with race-conscious recruiting, or think DEI efforts should be dropped for legal or cost-saving reasons, but explain that the organization prioritizes the increased innovation that comes from having a more diverse team or simply having a workforce that represents the broader society. It is important that everyone engages on this issue. While some organizations relegate DEI to HR and HR alone, this is a mistake. Messaging on — and commitment to — DEI should be understood and communicated by everyone from frontline managers to the CEO, especially now when racial tensions remain high and policies like affirmative action are being questioned. Moving Forward Now that the media furor over Students for Fair Admissions v Harvard University and the University of North Carolina has slightly abated, organizations have a moment to strategically reflect on how their DEI efforts may be affected. We believe corporate leaders should resist the urge or pressure to backpedal on DEI commitments. Instead, they should enhance DEI in a manner that complies with the law, aligns with their organizational values, and benefits their businesses.

Why Companies Can — and Should — Recommit to DEI in the Wake of the SCOTUS Decision

Summary.

Partner Center