Retreating from DEI: What HR and Business Leaders Predict
As some organizations scale back their Diversity, Equity, and Inclusion (DEI) initiatives in 2025, questions arise about the ripple effects on workplace culture, employee engagement, and business outcomes.
The decision to reduce DEI efforts—often driven by budget constraints, shifting priorities, or external pressures—has sparked debate about its long-term impact.
To explore this, we asked DEI experts, HR, and business leaders:
What are the possible outcomes of scaling back DEI initiatives?
Their insights reveal a range of consequences, from diminished employee trust and weakened innovation to potential talent loss and reputational risks.
They also highlight opportunities for organizations to refine DEI strategies to be more impactful and sustainable.
In an era where employees and consumers increasingly value authenticity and inclusion, these experts emphasize the need for thoughtful approaches to maintain progress.
Dive into their perspectives below to understand the risks, opportunities, and strategies for navigating the evolving landscape of DEI in today’s workplaces.
Read on!
Janet M. Stovall
Founder & Principal, Pragmatic Diversity Consultancy
Janet M. Stovall
First, politics is a big factor. We’re seeing more political pushback against DEI, with things like executive orders and laws trying to get rid of these programs. This has created a chilling effect, particularly following last year’s Supreme Court affirmative action decision.
Despite this political pressure, it’s important to note that many companies are not entirely abandoning DEI. A study by the Heritage Foundation (of all organizations) found that 485 of the Fortune 500 companies still actively promote D&I initiatives. This means that 97% of Fortune 500 companies haven’t canceled their DEI programs. And 86% of chief diversity officers expect budgets to remain steady or increase in 2025.
Second, there’s a lot of social tension. Different groups want totally opposite things when it comes to DEI. Some want more action, others call it “woke” and divisive. This puts companies in a tough spot and makes them careful about what they say publicly.
However, the reality is that many companies are simply evolving their programs or being less vocal about them. This approach, while understandable, presents its own set of challenges.
A disconnect between what an organization says (or doesn’t say) and what it does can lead to cognitive dissonance among employees, which erodes trust and engagement. Some organizations, it’s true, will walk away from DEI altogether. Often, these are the companies that didn’t truly see its value and were perhaps caught up in the 2020 surge of interest.
Third, there’s the legal piece. Even though legal changes can be slower, companies have to stay on top of the rules around DEI. Title VII is still in effect, and companies need to comply.
Looking ahead, I think we’ll see some interesting shifts. There may be fewer DEI programs overall, but the ones that remain are likely to be more effective. We’re already seeing surface-level solutions, like basic awareness training or simplistic actions that claim to “solve” this very complex issue, fall away.
What I believe will endure are objective, business-outcome focused approaches that are measurable and deliver tangible results.
Ultimately, companies that have been treating diversity as a real business asset, not just a marketing buzzword, will keep at the work. How they do it might change, but the commitment will stand.
Dr. Kamille Richardson
When companies start pulling back on their DEI efforts, the ripple effects go way beyond just optics or PR. It can cause real problems.
Without a focus on inclusion, businesses miss out on the fresh perspectives that drive innovation and help tackle big challenges. And for employees with disabilities, the impact tends to hit even harder—fewer accommodations, less accessible tech, and not enough support to thrive and grow.
These gaps create barriers that hold talented people back, which leads to higher turnover, lower morale, and fewer future leaders in the pipeline.
The truth is, when DEI slips down the priority list, disabled professionals often feel it first. Accessibility starts to feel like an afterthought instead of something that’s baked into how the company operates day-to-day.
We’ve seen how remote work opened doors for many people with disabilities—but without clear, thoughtful policies, those flexible options can disappear, replaced by one-size-fits-all approaches that don’t work for everyone.
Even more concerning? Rolling back inclusion can reinforce outdated ideas about disability, turning necessary tools and support into things seen as “nice to have” instead of what they really are—smart, strategic investments in people.
It’s not just disabled employees who lose out, companies miss the chance to tap into the unique insights and problem-solving skills that come from people who’ve spent their lives navigating complex systems.
That kind of perspective is exactly what modern businesses need more of—not less.
Kevin Kaminski
CTA Certified Coach, Wise Owl Coaching LLC
Kevin Kaminski
Are organizations prepared to risk their competitive edge by scaling back diversity, equity, and inclusion (DEI) initiatives?
Former US Secretary of Transportation Pete Buttigieg explained an important business principle behind DEI when he said, “The opposite of diversity is uniformity. The opposite of equity is inequity. The opposite of inclusion is exclusion.” Few companies in competitive markets will thrive by staking their future on having a uniform, inequitable, and excluded workforce.
Consider the data: a 2023 McKinsey & Company study showed that companies with the most gender-diverse executive teams are 39% more likely to outperform their least-diverse peers, a rate that more than doubled in the last decade. When ethnic diversity on the executive team was examined, the most ethnically diverse were also 39% more likely to outperform the least diverse.
As a career-success coach, I’ve seen talented, high-performing individuals lose motivation and passion when their employer’s values conflict with their own. Misalignment in values often translates directly into employee turnover, reduced productivity, and lower morale.
Employees seek organizations with cultures that reflect their values. Most employees’ values include commitments to fairness, inclusion, and diversity. According to a 2020 Glassdoor study, 76% of job seekers think a diverse workforce is an important factor when evaluating companies and job offers.
Companies scaling back on DEI efforts risk consequences in attracting and retaining top talent. Eliminating DEI signals that diversity, fair treatment, and inclusion are not strategic priorities. When current and potential employees see that as a misalignment with their own values, it can trigger an exodus of talent and damage to the company’s reputation as a desirable employer.
Reducing DEI initiatives isn’t just ethically problematic, it’s strategically detrimental.
Companies with a diverse set of employees benefit from having the varied backgrounds, experiences, and skills from that diversity in their talent pool.
Limiting the diversity of employees by eliminating DEI efforts reduces their ability to innovate, adapt, and compete effectively. Companies willing to continue investing in diverse, equitable, and inclusive workplaces will reap financial, reputational, and operational advantages. Those that don’t will struggle in an increasingly complex global marketplace.
Silvia Angeloro
Executive Coach, Editor in Chief, Resume Mentor
Silvia Angeloro
What strikes me most is how quickly this can erode trust and morale among employees, especially those who’ve relied on these initiatives to build equitable spaces.
I’ve worked in environments where DEI efforts were deprioritized, and the immediate consequence was subtle yet significant. Employees of marginalized groups started disengaging, feeling as though their contributions mattered less.
I recall one instance where scaling down DEI programs led to unintended ripple effects. A once-thriving mentorship program for underrepresented employees was quietly discontinued.
Over time, I observed talented individuals leaving the organization, not because of performance issues but because they felt their professional growth and inclusion were no longer supported. It was a stark reminder of how such initiatives impact the broader culture.
Cutbacks may save resources in the short term, but the long-term result can be a loss of diversity, innovation, and employee loyalty. Organizations should tread carefully, finding ways to sustain DEI efforts, even in scaled-back forms, to maintain meaningful progress.
Leila Rao
Agile Coach, Author, & Business Strategist, Cultural Cartography
Leila Rao
Scaling back DEI is about more than budgets, qualifications, or even talent. DEI is a framework that strengthens how organizations operate.
When DEI is treated as a trend or a checkbox, it’s the first to go. But organizations that embed equity into how they listen, hire, lead, and adapt? They build sustainable trust, innovation, and resilience.
Pulling back may offer short-term relief, but long-term, it signals misalignment with the diverse realities of both workforce and market.
The outcome? Missed insight, eroded engagement, and a shrinking circle of relevance.
Yolanda Slan
Head of Human Resources, Televerde
Yolanda Slan
There is no question that the DEI brand has been politicized and used to divide people. As a result, many people don’t even understand what DEI is. I’ve had people genuinely surprised when I tell them that programs like maternity leave or second-chance hiring are DEI initiatives. That’s telling. This is not a failure of intention—it’s a failure of messaging.
But the mission isn’t going away. It’s evolving. Maybe it emerges under a different name, or perhaps we stop naming it altogether. But the best organizations will continue to invest in practices that reflect the spirit of diversity, equity, and inclusion because it’s the right thing to do and the smart thing to do. Customers will also continue to demand it and look to invest their dollars in companies that invest in people.
I hope to see more intentionality in this next chapter—fewer check-the-box initiatives, more meaningful efforts that produce measurable results, and more clarity about what DEI actually is: practical support for real people in all their differences and life experiences.
Leaders need to avoid activism in the workplace, meaning they should never be pushing personal agendas. However, they do need to be active—actively creating workplaces where people feel like they belong, are treated fairly, and have what they need to succeed.
Don’t get me wrong, it’s absolutely OK to bring personal experiences and perspectives into the workplace. We know that diverse viewpoints lead to better decisions. But, every program, initiative, and conversation must be grounded in the company’s values, aligned with its goals, and designed to make sure no employee feels excluded.
Kristen Boyle
Vice President of Marketing, HireRoad
Kristen Boyle
As some organizations begin to scale back their DEI initiatives, it’s important to recognize the very real business risks this decision may carry.
Diversity, equity, and inclusion aren’t just values—they’re proven drivers of performance.
Companies that deprioritize DEI may soon see the consequences reflected in their bottom line: declining customer engagement, weakened brand perception, and missed revenue opportunities.
That’s why it’s more important than ever to use data to reinforce the business case for DEI. By connecting people metrics to business outcomes—such as linking inclusive hiring practices to higher retention, or diverse leadership to stronger innovation—organizations can quantify the value DEI brings.
If companies choose to step back from DEI, they should at least equip themselves with the right data to understand what’s at stake.
With this evidence, they’ll not only be able to measure the impact of deprioritizing DEI—they’ll also be better positioned to justify bringing it back when the costs of inaction become clear.
Adam Posner
Founder & President, NHP Talent Group
Adam Posner
Based on my experience and the clients we have worked with, we have observed that scaling back DEI initiatives may offer short-term cost savings.
Still, it risks long-term consequences in culture, innovation, and talent attraction. Inclusive teams consistently outperform less diverse ones, and candidates, especially Gen Z, pay close attention to whether companies walk the talk.
Organizations that deprioritize DEI may struggle to build trust with employees and customers alike, while those that stay committed will be better positioned to foster resilience, creativity, and sustainable growth.
Michael Ang
Our customers are in a tough spot. They’re committed to diversity, and were committed long before DEI became a common acronym. At the same time, they’re trying to stay out of hot legal water. Some of them are removing advertisements about diversity, or pausing their commitments to some diversity hiring events while they see how this plays out in courts. But they still view diversity as a necessity for filling jobs and something that results in a more successful business.
State laws can conflict with federal laws, making diversity even trickier to navigate right now. On the federal level, the Department of Education is cutting jobs, but that doesn’t mean each state’s education department is. Universities may be cutting some DEI programs, but that doesn’t mean they want to hire everyone who looks and thinks alike. In most cases, their desire to have a diverse student population and a diverse workforce remain, regardless of what’s happening in Washington.
The scaling back of DEI initiatives could fragment the recruitment landscape. As some organizations pause their DEI efforts while others increase them, this could create a divide among job boards. Those with a genuine commitment and a strong following may thrive, while those that are only DEI-in-name-only may struggle.
A lot of organizations change their recruitment advertising budgets mid-year, often July. Instead of just trying to give the appearance to the world that they care about DEI, which unfortunately may have been the case in the past with some organizations, now companies may tweak their budgets to prioritize recruitment channels that deliver measurable results, particularly for protected categories such as veterans and individuals with disabilities.
The HR Spotlight team thanks these industry leaders for offering their expertise and experience and sharing these insights.
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