What happens when a company’s commitment to Diversity, Equity, and Inclusion is put to the test? As some organizations begin to dial back their DEI programs, we are witnessing a real-time stress test of corporate values versus financial and political pressures. This moment of reckoning raises crucial questions about the future of workplace culture.
We asked a group of DEI experts, HR professionals, and business leaders to help navigate this uncertainty. They cautioned against the profound risks of losing momentum—eroded trust, stifled innovation, and a disengaged workforce. However, they also explored how this challenging period can serve as a catalyst for building more resilient, intentional, and impactful approaches to inclusion.
Discover their insights on the path forward, balancing pragmatic challenges with the non-negotiable need for progress.
Read on!
Dr. Qiana O’Leary
CEO & Founder, Minty Education Service
Dr. Qiana O’Leary
As CEO of Minty Educational Services and Instructional Assistant Professor at Texas A&M International University, my work sits at the intersection of culturally responsive leadership, educator wellness, and sustainable work culture.
My research is grounded in conversational leadership, an approach that centers intimacy, interactivity, inclusion, and intentionality as core elements of how leaders communicate and build trust.
Through this lens, inclusion is not an initiative.
It’s a way of being. A daily practice. It’s how we show up.
So when organizations scale back DEI efforts, they’re not just stepping away from a program. They’re signaling that equity is optional. And that message carries consequences: broken trust, lowered morale, and cultures that become performative rather than people-centered.
Conversational leadership offers a more sustainable path. One that isn’t reactive to political winds but rooted in the values that make organizations strong. Honest dialogue. Shared power. A commitment to belonging that doesn’t waiver.
This is the kind of leadership that holds. And this is the work we do at Minty.
Sara Thomas
Advisor, Mother Cover
Tabitha Ziegmann
When organizations choose to scale back DEI initiatives, they will likely face consequences that will impact them well beyond the surface metrics. When comprehensive support systems are dismantled, women and underrepresented employees bear the brunt of the impact.
Take structured parental leave policies as an example. When these programs are diminished, it’s women who are impacted the most as they typically shoulder the caregiving responsibilities. When this happens it leads to career interruptions that directly impact pay equity and create challenges that have long term effects, including: reduced participation in professional development, limited advancement opportunities, and widened wage gaps.
Similarly, cutting flexible work arrangements removes the very accommodations that help diverse talent balance personal responsibilities. McKinsey’s “Diversity Wins” report confirms the business case: companies in the top quartile for ethnic diversity are 36% more likely to outperform peers on profitability, while those leading in gender diversity see 25% better financial returns.
Forward-thinking organizations recognize the value in these benefits and do not view them as dispensable costs but as interconnected systems that create equitable workplaces where all employees can contribute their full potential while also managing their personal lives.
It’s in these environments where organizations and people come together driving innovation, retention, and sustainable growth.
Hayden Cohen
There are some short-term gains to be made here, but this is going to hurt businesses in the long term.
Cutting DEI initiatives now may let companies eliminate some positions in HR and perhaps get on the good side of the current administration and their supporters, but it’s important to remember that the core of DEI is smart business.
It’s about finding the best talent at the best price.
Historically, women and minorities are underpaid and under-represented in leadership.
I call that a market inefficiency to take advantage of.
Shannon Estreller
Director of People, EvolveMKD
Shannon Estreller
Scaling back DEI initiatives can have significant negative consequences for organizations, particularly in terms of engagement and retention. Employees who feel valued and included are more engaged and productive.
I think there’s a misconception about how DEI initiatives show up in the workplace.
At EvolveMKD, we understand that a workplace prioritizing Diversity, Equity, and Inclusion isn’t just checking a box—it’s creating a space where everyone can thrive. And our actions speak louder than words.
Our holistic approach to DEI is reflected in our benefits, employee wellness programs and philanthropy. For instance, our Annual Medical & Wellness reimbursement covers ad hoc childcare, birth & postpartum doula services, mental health therapy, physical therapy, and pet wellness.
Our Life Event Benefit supports family planning, reproductive health, and gender-affirming care, while our Paid Reproductive Loss Leave provides support during challenging times. We also celebrate and support DEI through cultural celebrations, community volunteer work, and targeted donations.
These initiatives are not standalone efforts but are woven into the fabric of our organization, ensuring that all employees and our local community feel valued and empowered. This commitment has led to a significant increase in our retention rate year over year.
Doug Crawford
Founder, Best Trade School.net
Doug Crawford
In the long term, scaling back DEI efforts could also limit the diversity of talent an organization attracts.
Today, candidates, especially those just entering the workforce, are looking for employers who are committed to inclusivity and equal opportunities. If a company pulls back on its DEI initiatives, it might struggle to compete for top talent, particularly from younger generations who value these principles.
Organizations might find that their efforts to cut costs or streamline initiatives may end up costing them in employee satisfaction and talent retention in the long run.
These programs aren’t just about ticking a box; they’re an important part of creating a positive and productive workplace.
Robert Grunnah
In the real estate game, trust is currency—and trust is built when people feel seen, respected, and represented. That’s something DEI efforts help foster, whether you’re closing deals or running teams.
Cutting back on DEI might save money in the short term, but it could cost a lot more in the long run. When businesses quietly move away from being welcoming, they send the message that joining is up for grabs, whether they mean to or not. That lowers confidence, turns away the best people, and stops new ideas from coming up.
Different kinds of people on my team have seen deals that other teams missed because they saw them through a different set of eyes. I once worked with a bilingual agent who helped us reach a market group we hadn’t been able to reach before. Without her help, we would have missed out on six figures in sales.
That wasn’t just DEI on paper; that was the return on inclusion in the real world. Pulling back right now is not only dangerous but also not smart. Businesses don’t need tools that do things. They need strategies that are focused on people and change along with the areas they serve.
Harpreet Saini
As the CEO of a real estate investment company with a diverse workforce, I’ve had the opportunity to see firsthand how DEI initiatives have evolved and draw conclusions from data regarding their impact on their business.
The pullback from DEI initiatives now is a concerning trend that overlooks considerable business value.
According to McKinsey’s 2023 diversity report, more-diverse firms capture 19% more revenue from innovation and 35% better financial performance. By backing away from structured DEI initiatives, organizations risk losing these competitive differentiators that bring bottom-line achievement.
Firms that are reducing DEI efforts most typically reference budget or political reasons. Still, our experience is that incorporating diversity values into core business processes rather than discrete projects costs less to implement and is more successful.
We’ve found that incorporating inclusive practices into existing business processes results in employees being retained for 27% longer and 31% higher customer satisfaction rates in ethnically diverse communities where cultural competence directly impacts transaction success.
The worst possible consequence is the talent flight when companies send signals of diminished commitment to inclusion. Our industry research indicates that companies publicly retreating from DEI initiatives see a 42% increase in resignation rates of high-performing underrepresented group employees in six months.
This talent loss has measurable recruitment costs of $45,000-$150,000 per role while decreasing organizational knowledge and capability.
Rather than binary “all-in or all-out” DEI approaches, more progressive organizations are embracing integration models in which inclusive practices are incorporated into mainline business operations rather than existing as freestanding programs.
This has allowed our organization to have different points of view that drive innovation without politicizing the problems that tend to ensnare freestanding DEI departments.
Jonathan Palley
I definitely think that DEI is a good idea, but there have been some really bad implementations of it.
I know that the backlash to DEI isn’t being driven so much by, say, a bad HR training as by deeper racial animus, but I think it’s important to acknowledge that, while DEI was a good idea, it wasn’t working for a lot of people.
I do hope that DEI survives and moves forward, but it needs to improve.
Edward Hones
Founder, Hones Law
Edward Hones
Short-Term Optics vs. Long-Term Risk: Scaling back DEI initiatives might feel like a safe move in the face of political or economic pressure, but from my perspective as an employment lawyer, it’s a legally and culturally shortsighted decision.
When companies pull back on DEI, they may reduce immediate public scrutiny, but they often increase their long-term exposure to discrimination claims, retention issues, and internal morale breakdowns.
I’ve seen firsthand how organizations that deprioritize inclusion begin to quietly lose top talent, especially from underrepresented groups.
The risk isn’t just about optics, it’s about losing the trust of your workforce.
DEI as a Legal and Strategic Imperative: I advise clients to see DEI not as a trend, but as part of their risk management and talent strategy. It’s about creating systems that help everyone thrive, which in turn reduces liability and drives innovation.
Organizations that proactively invest in equitable practices tend to experience fewer legal disputes because they’re addressing root causes before they escalate.
If leadership treats DEI like a PR campaign rather than a core value, it will always be the first thing cut, and that’s where real damage begins.
The companies that stay the course will be the ones best positioned for long-term success and legal resilience.
Emma Sinclair
Companies scaling back DEI initiatives are going to have a major talent problem in the medium term.
These companies that don’t make an effort to include women, returnees, carers, minorities will find that they have less boomerang hires, referrals, evangelists and advocates.
Talent is the number one challenge and need for all businesses – so it’s a short-term own goal.
The HR Spotlight team thanks these industry leaders for offering their expertise and experience and sharing these insights.
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