There's no shortage of headlines highlighting the growing backlash against corporate DEI. The Supreme Court ruling last June that effectively ended affirmative action in higher education, along with recent vocal opposition to diversity initiatives by high-profile business leaders and politicians, has left many pondering the fate of employer-based diversity, equity and inclusion programs.
Despite the turmoil and heightened scrutiny, many business leaders are still doubling down on these initiatives. In fact, a
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The increased investment in DEI is not surprising. After all, the business case for more diverse workplaces is ironclad. Workforce inclusion is a competitive advantage for businesses that boosts innovation, productivity, resilience and ultimately,
We are, however, starting to see changes in how DEI initiatives are executed in organizations. And some employers are re-evaluating programs and investments in consultation with their advisers to avoid any new legal scrutiny. Benefits play an important role in a company's overall DEI strategy. Here are five key trends impacting DEI in 2024:
"DEI" gets a rebrand.
Elon Musk infamously said "DEI must DIE," and for some employers, it has. As diversity programs mature and evolve, we're starting to see businesses change how they talk about these initiatives – favoring broader terms like inclusion and belonging to describe their efforts. That's not necessarily a bad thing, as long as the end goal of fostering more inclusive, representative and diverse workplaces remains the same.- More inclusive, flexible benefits. Companies are
increasingly adopting lifestyle spending accounts (LSAs) that put workers in the driver's seat to determine how best to allocate a monthly stipend from their employer. Typically, a company would set broad parameters on how the funds can be spent each month across several categories, including everything from childcare costs to online classes, or even donations to favorite charities. The flexibility allows employees, especially those in vulnerable populations, to use the funds to best suit their needs at the right time and can change where they spend the stipend from month to month. LSAs are inherently inclusive and a straightforward way to address benefit gaps for underrepresented groups.
- Training and development underpinned with measurable goals. Education has been a cornerstone of DEI programs, yet how employers facilitate DEI training and development is getting an overhaul. Regardless of resource level, companies are taking a hard look at what's desirable and what's achievable and outlining SMART DEI goals, defined as specific, measurable, achievable, relevant and timebound. When investing in DEI training, companies also will need to invest in the technology and tools to track data and measure progress. By defining desired outcomes and evaluating progress against those goals, companies are better poised to enact meaningful and effective diversity initiatives.
- Policies and benefits supporting financial wellness. By empowering workers with personal finance knowledge, employers can help fill the gap often left behind by our national education system. This is often an overlooked, albeit very meaningful, component of DEI initiatives. Offering programs to improve financial capabilities and resources that help workers better manage their finances can help improve debt levels, build emergency savings and allow vulnerable groups that might not have previously received this type of education plan for the future. Re-assessing stock and 401(k) plans from the perspective of lower-wage workers also helps ensure equitable, meaningful pay policies for all workers.
- Compensation transparency gains momentum. Several states, including New York, California and Hawaii, have recently enacted pay transparency laws – and the momentum shows no signs of slowing. Compensation transparency is a key tenet of DEI efforts by keeping companies accountable for equitable pay. Equitable pay policies ensure historically disenfranchised workers get fair pay for their work and aim to close the persistent pay gap among gender and race. American women working full-time in 2021
earned an average of 82 cents on the dollar compared to men; Hispanic women earned about 58 cents and Black women earned about 63 cents for every dollar white men earned. We'll continue to see organizations adopting transparent pay policies and including compensation ranges on open job postings. Pay transparency is especially important for attracting diverse candidates as part of an inclusive hiring strategy.
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Ultimately, by following the data, company leaders can make informed decisions about where and how to invest resources to foster more equitable and inclusive environments. Analytics software can help business leaders prove returns on investments for DEI spend and guide best-fit strategies for their companies.
