There has been a significant push against Diversity, Equity, and Inclusion (DEI) initiatives in Corporate America in the past two years. In-house diversity departments are being winnowed, recruiting efforts are reduced, mandates for inclusion of diverse candidates for C-suite jobs are diminished. Belonging is the term of art, and over half of Fortune 500 companies have taken diversity measurements out of compensation calculations. This is a reversal of policies initiated in the wake of the murder of George Floyd.
The 2024 Edelman Trust Barometer Special Report: Business and Racial Justice tested the advisability of these changing policies and commitments. We find a change in course by Corporate America to be inadvisable.
Now in its fifth year, the report surveyed 3,200 people across the U.S. The essential problem in American society remains. Racism is on the rise, with half of respondents saying they themselves or a member of their family has experienced racism, up 9 points since our September 2020 study. Two thirds of respondents are worried about systemic racism in the country.
Government is not up to the task of fixing this essential shortcoming. Though Government is the institution most expected to take the lead in addressing racism (54%), only 23% of respondents see Government performing well in this task. Further weakening the position of Government in this election year, the top fear is politicians intentionally sowing division (75%), above both inflation (69%) or threat of nuclear conflict (67%).
The other major institutions are seen as similarly incompetent or unwilling to engage in the hard work of change. Business lags badly on performance in addressing racism (32% say it’s doing well), along with media (28%) and NGOs (34%). Under half of respondents say that business serves the interests of my racial community well (47%), down eight points over the past four years, with huge drops among the Black (down 17 points to 40%) and ANHPI (down 13 points to 42%) communities. Business ranks last among institutions expected to take the lead on racial justice at 28%, half as much as Government. But attitudes towards Business change dramatically when it is seen as serious about taking the interests of diverse communities to heart, a 24-point jump in trust to do what is right from 39% among those who see Business in general as serving their racial community poorly to 63% among those who see it doing well.
Who is trusted to make the change? It is My Employer, with 71% of employed respondents trusting their workplace to do what is right in addressing racism in the US. My Employer is 39 points ahead of Government in performing well at addressing racism (62% vs. 23%). This finding is consistent with our broader work in trust, which has consistently found that Trust is indeed local — in my CEO, my company newsletter and my colleagues as a source of information.
Despite debate, DEI programs in the workplace have become more, not less, important to business success. By a two to one margin (38% to 17%), respondents say their attitudes toward DEI programs have improved, not declined, from three to five years ago. Employee demand for diversity programs is back to its 2020 high, with 60% of respondents (up 9 points since two years ago) saying that a well-supported diversity program is key to attracting and retaining them as an employee.
Employee loyalty is dramatically higher when companies invest in DEI. If companies have many rather than few DEI initiatives, there are 32-point increases among Hispanic (53% among those with few to 85% among those with many) and Black (48% to 80%) employees, and over 20-point rises for ANHPI and White employees. This is true across political party lines as well, with Republican employees showing a 19-point increase (63% to 82%) and Democrat employees a 24-point increase (59% to 83%) in loyalty, with a significant increase in likelihood to recommend their organization as an employer as well (Democrat employees up 31 points from 55% to 86% and Republican employees up 22 points from 64% to 86%). When organizations invest in their DEI offerings, employees from across backgrounds invest in them.
How to protect and evolve DEI programs in the current highly politicized environment? Here is a four-point plan:
First, demonstrate positive impacts from the work. Defend your investment by using facts. Republicans and Democrats agree that organizations leverage DEI initiatives to improve business outcomes (Republicans 52%, up 9 points; Democrats 75%, up 5 points; Independents 61%, up 1 point since last year) rather than only to push a political agenda.
Second, recognize the overlap and connection with brand marketing. Consumers in the U.S. are 4.5x more likely rather than less likely to buy brands that commit to ending racism and inequality. That is universal across racial lines and more profound for Democrats than Republicans (10.5x for Democrats and 2x for Republicans).
Third, consider incorporating critiques and invite meaningful dialogue with employees holding different political views or diverse perspectives. This is not a human resources exercise alone. It is an approach to better business. People believe a company’s DEI initiatives are sincere if people are allowed to voice concerns and be involved, and if the work is shown to be aligned to company values.
Fourth, change your communication approach from vertical to horizontal. The most trusted sources of information on racism and diversity, equity, and inclusion in the workplace are people like me and racially diverse co-workers. These colleagues are much more likely to be trusted than the head of HR, the CEO, or head of DEI. And drop the jargon, whether “DEI” or “ESG,” in favor of plain language, to discourage politicization.
Many boards of directors are asking CEOs about the right path forward on this complicated issue, specifically whether a mid-course correction is in order. This latest Edelman Trust Barometer Special Report on Business and Racial Justice provides definitive rationale for staying the course. Loyalty of the employee base is increased. Customers are more likely to buy. Trust for the enterprise is enhanced. In a time of low trust in Government, it has fallen to My Employer to pick up the torch on this all-important commitment. This is a matter of running a better and stronger business, to make more money and in so doing, to improve society.
Richard Edelman is the CEO.
