This article is part of "Workforce Innovation," a series exploring the forces shaping enterprise transformation.
For years, diversity, equity, and inclusion has been a central strategy at many companies, shaping workplace cultures, HR practices, and recruitment and retention initiatives.
Recently, though, momentum has shifted. High-profile figures like Elon Musk have accused DEI of fueling the culture wars and labeling it "woke." Meanwhile, companies like Harley-Davidson, Molson Coors, Lowe's, and John Deere have scaled back or dropped their DEI programs.
A survey by the executive-search firm Bridge Partners of 400 C-suite and HR leaders at companies with at least $25 million in revenue or 250 employees found that the number of employers who said they had increased their DEI investments in the past year dropped to 66% in 2024 from 77% in 2023. Roughly one in four executives suggested they believed DEI programs were a fad.
But amid the backlash, some organizations are refining their DEI strategies, focusing on belonging, inclusion, and fair pay alongside other diversity metrics. Companies like Ancestry, Mitre, and HLW are using data to evaluate employee experiences while addressing equity through cultural programs, training, and compensation reviews.
"Many organizations remain committed to DEI, but their strategies are shifting," said Maryam Kouchaki, an Academy of Management scholar who teaches at the Kellogg School of Management at Northwestern University. "We're seeing more reframing of DEI efforts and a stronger emphasis on systematically linking DEI to a business case."
The goal, she said, is to create sustainable, long-term DEI programs that are not performative but grounded in strategies that benefit both employees and the organization. Research suggests that diversity leads to better performance and decision-making as well as greater team satisfaction.
"DEI isn't just hiring a diverse workforce — it's about ensuring employees feel respected, included, and that they belong," Kouchaki said. "This is a chance for companies to reassess and get it right."
Creating an equitable employee experience
In the wake of George Floyd's murder in 2020, corporate America rallied around DEI initiatives, pledging billions of dollars to address racial inequities. But amid economic pressures and increasing political opposition, enthusiasm has waned.
Kouchaki said part of the criticism of DEI stemmed from the perception that these initiatives were more lip service than action. "Some companies committed to unrealistic goals or didn't know how to implement them effectively," she said.
Three years ago, Ancestry, the genealogy and DNA-testing company, launched its "Drive to 45 by 25" initiative, aiming to have 45% of its workforce come from underrepresented populations by 2025. While the company made progress in recruiting diverse talent, these new hires were leaving at higher rates than other employees.
"We realized we had to be more intentional about creating an equitable employee experience," said Shane Koller, the head of people at Ancestry and a participant in BI's Workforce Innovation board.
In response, the company introduced "Amplify Voices," a speaker series featuring academics, authors, and activists offering insights into marginalized communities' experiences. It also developed programming to celebrate cultural-heritage months, bolstered its employee resource groups, and instituted a Global Day of Understanding, an annual event encouraging frank discussions about DEI.
Recognizing that cultural events alone were insufficient, Ancestry adopted a systematic approach to pay equity. In 2022, the company overhauled its people-analytics tools to review compensation, promotions, and raises across race, gender, and ethnicity. This analysis aimed to identify and eliminate disparities in employee advancement and compensation.
Ancestry conducts compensation analyses twice a year, taking into account factors that affect pay such as role, level, location, and performance. It says that if it finds unexplainable differences in proposed pay, it adjusts up appropriately.
"It's great to have events and build inclusion and belonging," Koller said, "but at the end of the day, if our systems and processes are not helping us achieve an equitable experience, we're fighting an uphill battle."
Data as a 'proof of concept'
Some organizations struggle to identify their diversity gaps and how to address them.
To tackle this, Mitre, a nonprofit R&D company serving US government agencies, turned to Aleria, a tool designed to measure inclusion by collecting qualitative and quantitative data across the company.
The software allows employees to anonymously share details such as their age, gender, race, and title and answer prompts about their job satisfaction and barriers to doing their best work. The tool analyzes responses, highlighting patterns and practices that need improvement.
"Our people are data-driven," said Heba Mahmoud, a senior manager of inclusion and diversity at Mitre. "At first they thought DEI was about feel-good emotions, but the data showed it's critical to our daily work. When employees don't feel included or like they belong, they aren't as productive or successful. This data became a proof of concept."
Based on the feedback data, Mahmoud's team launched an internal campaign focused on improving respectful communication and collaboration. This involved training sessions, workshops, and team-building activities. The team also encouraged employees to share positive experiences of inclusivity, to capture a representative range of experiences.
"Having this data was crucial in understanding where the gaps were, honing in on the issues, and offering specific recommendations to leadership," Mahmoud said.
Empowering managers
Anjali Mathai, the director of DEI at HLW, an architecture and design firm, also said her company was adopting a data-driven approach to ensure equitable opportunities for its employees.
A key part of this initiative is strengthening management training in areas like communication and unconscious bias. The training is designed to help leaders identify patterns in individual performance data and support employees.
"A manager might not have all the answers, and that's OK — but they need to serve as a bridge for their teams, making sure all employees have the training and resources they need to grow and advance," she said.
Pay equity is also central to HLW's DEI strategy. The firm says that through annual compensation reviews, it has narrowed its gender pay gap to a maximum of 10% higher for men versus women, in certain roles. Mathai said it continues to reduce the gaps through promotion cycles.
Heather Bussing, an employment attorney who cowrote the book "Get Pay Right," argued that as the presidential election looms and DEI remains a contentious issue in many corners of business, companies using data to inform their DEI strategies are better positioned to navigate these challenges.
"Data can tell you things you don't want to see," Bussing said.
But first, companies must commit to collecting the data. "They need to monitor it and look for places where there are problems and outcomes that are not what they want and be interested in addressing them," she said. "That requires a cultural shift."
Bussing said companies that shy away from DEI initiatives may find themselves at a disadvantage. Demographic forces are powerful.
"We have an ongoing and permanent labor shortage for the foreseeable future," she said. "If you need humans to work at your company, you have to be OK with any qualified humans that show up, and they have to be able to work together."