Does the end of affirmative action doom corporate DEI?
Shortly after the Supreme Court Harvard affirmative action ruling was announced, one of my clients shared that she had received calls from worried employees. “Are we still going to have DEI here?” they wanted to know.
It may be a while before we get the answer to that question, as the inevitable challenges to corporate DEI programs work their way through the courts. As reported by The Wall Street Journal, suits targeting law firms that offer fellowships based on diversity have just been filed. Employers who were reluctant to traverse the DEI journey in the first place will welcome a quick exit from it, the ruling and these new actions providing a convenient offramp. Many more who truly are committed to improving workforce diversity and inclusion, or who realize that exiting won’t serve their broader stakeholder interests very well, will adopt a wait-and-see approach.
I’m not an attorney and don’t offer legal advice. But if my clients ask, I’m suggesting that they stay the course for now, in close consultation with their legal counsel. It’s still worth considering in the meantime which DEI programs might be most vulnerable to future legal challenge and exploring alternatives. Let’s take a look at a few.
Representation quotas: Most at risk. And that might not be a problem.
Quotas and targets designed to increase workforce diversity are the corporate counterpart of affirmative action.
Reliable and comprehensive data on just how many U.S. companies actually use quotas or targets is elusive. In my experience, most companies don’t have “hard” representation quotas and the practice is not as prevalent in corporate America as affirmative action has been in higher education. Where quotas are utilized, they often apply only to senior roles or career levels where diversity is the most scarce.
Diverse candidate slates, another type of quota tool, are much more common. Employers who have shied away from representation quotas have adopted diverse candidate slates as the ‘softer” alternative.
What happens if workforce quotas and their related practices become prohibited?
It may not be as much of a setback as thought. Quotas aren’t prevalent to begin with. Plus, there is limited and conflicting data and case studies to support that they actually have led to sustained increases in workforce diversity in U.S. companies. Diverse candidate slates similarly have had mixed results (just ask the NFL about their experience with the so-called Rooney Rule).
In the absence of quotas, which I’d never recommend in the first place, employers will continue to have access to plenty of other tools to increase diversity. Companies should already be taking a harder look at the root causes of their diversity challenges. In recent years there has been tremendous emphasis on bias as a significant driver of representation disparities. Less attention has unfortunately been given to identifying and fixing underlying gaps in core talent management processes and examining other contributing factors. Optimizing key talent processes improves the attraction, development, promotion and retention of diverse talent – no quotas needed.
Career development programs: Redefining who needs a boost.
Sponsorship, mentorship and specialized training programs can accelerate careers. Participants enjoy the benefits of enhanced learning plus valuable access to senior colleagues who can provide guidance, inside scoop, introductions, opportunities and increased visibility.
Many companies reserve these programs for underrepresented talent, operating on the premise that participants will get the boost they need for promotion and future career growth, which will eventually translate into more diversity at senior levels of the organization. Participation criteria is often quite straightforward: high potential (demonstrated by performance ratings, work quality and manager recommendation) plus, identification with an underrepresented group.
Legal challenges may shape the future of these programs, but there may be compelling business reasons to consider modifying them now.
Case in point, one of my clients was preparing to launch a formal sponsorship program designed exclusively for underrepresented employees. The company had carefully reviewed their talent and had identified a group of candidates for the program. The criteria focused on high potentials who had limited career exposure or opportunity as a result of their particular department, manager or other factor. The resulting list was primarily underrepresented talent. It also included a couple of white men.
After much internal discussion, the company decided to expand program eligibility. Any employee who met the criteria could be considered, including white men (who were a significant majority in this workforce). I was surprised. It was a bold move in today’s DEI environment and might have challenging optics, but I couldn’t fault the rationale. Diversity was a top priority for them but in their tight labor market, they needed to develop and elevate all internal talent. This was a business decision.
Career development programs can be valuable for both participants and their company. I’d encourage employers to take a more intersectional approach to who’s invited to attend. If it turns out that gender, race/ethnicity and other personal demographic markers can’t be in the mix, consider using experiences, skills, competencies, performance ratings, career velocity and other factors to decide. Sophisticated data models, such as cohort analysis, could illuminate hidden high-potential talent from new perspectives.
And given typical trends in workforce dynamics, it wouldn’t be at all surprising to find that these more robust, multivariate methods of identifying talent for targeted career development programs end up primarily identifying underrepresented talent – without incurring the risks of the traditional, one-dimensional approaches may bring in the future.
Employee/Business Resource Groups: This one may present surprising challenges.
Employee Resource Groups and Business Resource Groups (ERG/BRGs) are formed to represent the interests of a particular community within the workplace. Almost always, allies (individuals who do not identify with that community) are invited to participate in key activities and events. ERG/BRGs are the very definition of inclusive. Will at least they be immune to legal challenge?
Not necessarily. Two common practices could be at risk:
Types of ERG/BRGs: Employers (even the largest) can administratively support only a limited number of these groups – which means that some underrepresented communities won’t have their own ERG/BRG (typically groups with smaller numbers). This is already an ongoing source of contention in many workplaces and could easily become the basis for a challenge. On the flip side, white men, often an overrepresented group in the workplace, could demand equal opportunity to form their own ERG/BRGs. Some companies have already been exploring new ERG/BRG models, including cross and intersectional groups, such as working parents, instead of using the more segmented, traditional groups (e.g., gender, race/ethnicity, etc.). It’s possible these more hybrid groups will offer companies a viable alternative.
Leadership roles: These slots are usually earmarked for individuals who identify with that ERG/BRG’s community. Is there a future scenario where ERB/BRG leadership roles would now need to be open to any employee, regardless of how they identify? It might not sound that problematic, but in practice, I suspect that most ERG/BRG members and even their allies would object. Perhaps ERG/BRG leadership role qualifications could include a requirement that the candidate must have comprehensive and real-life experience in navigating the day-to-day workplace challenges and opportunities of that community. It gets sticky, I know (this is where counsel must weigh in), but most ERG/BRGs will be deeply uncomfortable with the alternative.
As companies conduct their next DEI strategy review or risk assessment, they should make it a priority to evaluate how the current ERG/BRG governance model might need to flex in light of these considerations. ERG/BRGs are high profile, deeply appreciated institutions. Getting a head start on potential impacts now, along with how your company might address them, will help ensure smoother transitions if any pivot is needed.
Final Thoughts: Is corporate DEI doomed?
Companies who have rigorously analyzed their workforce data, evaluated talent programs, and solicited feedback on employee experience will virtually all tell you they still have work to do to ensure that all employees have equal opportunities to thrive in their careers, feel welcome and comfortable in the workplace and receive equitable pay. These are not DEI aspirations; they are the bedrock of how companies attract, develop, promote and retain the talent that helps them be successful businesses.
Corporate DEI is not doomed because of new limitations on affirmative action. Sure, there will be challenges to many common DEI practices and programs. As the courts sort it out, companies will likely need to make adjustments. In the meantime, I’m confident that companies who are authentically committed to their people will forge new paths to get the job done.