Are companies pulling out of DEI?

„Are companies pulling out of DEI? This is not an abandonment of values, but a modification and adaptation”

[This article is a response to the text published in WPROST ”Trump effect" also in Polish companies? “The laws of the market are tougher than political correctness,” dated 26.01.2025, and represents an expression of the authors' personal views].

One of the first decisions Donald Trump made after becoming US president was to issue an executive order dismantling federal DEI (Diversity, Equity and Inclusion) programs. Since then, there has been a lot of talk in the media and in public discussions claiming that “DEI is dying,” “DEI didn't work,” “ it’s the end of political correctness,” “we're back to normal.” The question remains: do the trends in the article “Trump effect” also impact Polish companies? “Market Forces Prevail Over Political Correctness” follows this narrative. 

But is this really the case? Is the current debate about the end of DEI a war headline weaponized by  the media, or an accurate assessment of the current situation from across the ocean, which could have a real impact on companies in Poland? Has DEI really failed and will Polish companies also turn their backs on it?

In our opinion, fully understanding the current situation, requires a deeper look beyond the misconception that DEI is just  political correctness. Most importantly  we want to recognize that the context of the DEI in the US, Europe and Poland, differs significantly

What is really going on in the States?

Reading the headlines, it's easy to get the impression that DEI is in retreat. We read about companies such as Meta, McDonald's, Ford, Toyota, Walmart and many others withdrawing from DEI. However, two aspects are important here: the scale and type of action, i.e. how many companies are actually withdrawing from DEI policies and what this means in practice. We are at a moment of dynamic change, with many U.S. companies redefining and having conversations about the future of their DEI-related strategies, policies and actions. What we do know is that, according to a January Resume.Org survey of 1,000 companies with DEI programs in 2024, 65% said they would maintain the same budget for DEI programs, 22% would increase funding, 8% would reduce spending, and 5% would eliminate DEI activities. The list of those saying they will stay with their DEI strategies includes Adobe, Apple, Costco, Delta Airlines, IKEA, Lush, Microsoft, Sephora, McKinsey, T-mobile and many others.

What exactly are companies withdrawing from? 

“Companies' withdrawal from DEI” most often means abandoning certain practices, such as using affirmative hiring targets  for hiring people from minority groups, quotas, making bonuses for executives contingent on increasing demographic diversity in teams, from taking a public stance on political issues or funding events related to supporting the LGBTQ+ community.

However, it is worth mentioning that even those companies that are changing their commitment to DEI emphasize that they are not abandoning the topic. One example is Ford, declaring that it “remains deeply committed to supporting a safe and inclusive workplace.” This shows that even organizations that are officially listed as “withdrawing from DEI” are rather moving toward modification and adaptation. This is not an abandonment of values, activities and practices, as DEI continues to be profitable for them in terms of business and image.

Changes to some practices were necessary

Many of the practices that companies are withdrawing from were ineffective, performative and polarizing. There was often a disconnect between DEI activities and business goals, as well as a lack of measurement and systemic solutions. DEI strategy was replaced with one-off lectures on structural racism. The focus was on "fixing" individuals through training on biases, instead of, for example, improving recruitment processes based on structured interviews and assessments against the same criteria. Such an approach would allow for more objective and accurate matching of individuals to positions. By overlooking the strategic aspect of DEI, companies' efforts have failed to have a lasting effect, and sometimes even led to the opposite result.

How to measure DEI?

In no area does a business allow itself to act on a hunch, and it should not do so in the area of DEI either. No one asked “How are we doing in sales?” will not look around the office and say: “I think we're doing reasonably well.” We have the right tools and measurement methods for this, which allow us to get an idea of the situation in real time, as well as to plan and modify the strategy accordingly. 

The same is true of DEI - for it to be more than just a superficial image-building effort, it must be measurable.  Through quantitative and qualitative analysis we can examine all aspects of DEI i.e. diversity, equality and inclusion. Companies typically track employee retention,  pay gaps, psychological safety, belonging,  and overall well-being. They also analyze access to strategic projects, promotions and development opportunities for specific demographic groups -for example tracking Gender representation in a company with gender diversity goals). Additionally, the effectiveness of training programs in changing participants' attitudes can also be evaluated.

It is often stressed that the effects of DEI activities only become apparent in the long term, such as after several years. While this is an important aspect, there are also indicators to monitor the return on investment in DEI more quickly. Below we will present just a few examples.

Imagine that a company changes its recruitment processes to a more structured, inclusive, tailored to the needs of a diverse group of candidates. It then compares the quality and timing of recruitment before and after the changes - how much more effective the recruitment is, whether it reaches a broader talent pool, and whether it identifies the best fit for the organization's needs. Not only can inclusive recruitment reduce recruitment time and thus cost, but it also has a positive impact on candidates' perceptions of the workplace. According to this year's “The Future of Jobs” report, 74% of employees consider a company's DEI priorities when deciding whether to join or stay with the company. 

Companies that prioritize diversity (demographic, cognitive, and experience) report 19% higher innovation revenue, and inclusive teams are 75% more successful in bringing their ideas to life. This is especially true in the context of global companies that want to offer their services or products in different countries, and therefore to different customers. Just look at the work (and success) of companies like Apple and Microsoft, whose teams are diverse, and the companies themselves maintain DEI activities as a priority to this day.

The effectiveness of DEI measures can also be studied by comparing retention levels - that is, the ability to keep talented employees in the organization - before and after these changes. If employees stay with a company longer, they don’t have to look for new opportunities. It then doesn't incur the cost of additional recruitment, managers instead of conducting interviews can focus on developing people who are already in the organization, and experienced employees don't spend their time onboarding more new people. Gallup research shows that replacing employees can cost half to twice their annual salary. People who experience or witness discrimination are more likely to choose to leave, research shows. According to the Talent Trends 2024 report, 20% of employees have felt discriminated against throughout their careers, most often because of their age, race or gender.

In employee retention, building an inclusive organizational culture is of great importance. This is done by implementing various DEI-related activities and processes that affect employees' sense of belonging and psychological safety. For example, inclusive leadership training programs for managers that teach, among other things, how to hold team meetings where everyone is willing to share their ideas, observations and is not afraid to voice their concerns. The level of inclusion or psychological safety is examined through tools such as psychological safety scan and qualitative research such as in-depth interviews and focus groups, before and after the implementation of activities. The higher the level of psychological safety, the greater the chance of making better decisions. Diverse teams, incorporating different employee perspectives, are 87% more effective in making sound decisions (data: Korn Ferry). In addition, the Australian Institute of Company Directors has studied that there is up to a 30% increase in companies' effectiveness in identifying and avoiding potential risks through diversity in teams and inclusive practices.

The mentioned ways to measure DEI are just a few examples of how to estimate the return on investment from implementing these measures. A DEI strategy impacts many processes and aspects of organizational culture, hence its effectiveness cannot be measured by a one-size-fits-all indicator. However, increased retention, reduced recruitment costs, greater innovation and more effective decision-making processes are tangible business benefits.

Opportunity for DEI in Europe and Poland

Changes in the approach to DEI in the United States, will influence how DEI will be implemented in Europe and Poland. However, to draw conclusions about the future of DEI in one country solely on the basis of the situation in the United States would be an oversimplification. This is because DEI activities are strongly influenced by historical, cultural, legal and political contexts.

Poland, by virtue of its regulations, is obliged to follow local guidelines. Employers, according to Article 94 of the Labor Law, are required to prevent discrimination in employment on the basis of, in particular, gender, age, disability, race, religion, nationality, political opinion, trade union membership, ethnic origin, religion, sexual orientation, as well as on the basis of employment for a definite or indefinite period of time or on a full-time or part-time basis. DEI's practices and policies are necessary to ensure that these laws are followed. 

In addition, the European Parliament and Council Directive (EU) 2022/2381 on improving gender balance among directors of listed companies and related measures was adopted in November 2022. It says that by June 30, 2026, in at least a three-member board of a company, the number of members of the less represented gender should not be less than 33%. 

Employers' obligations related to DEI, also stem from the requirement for non-financial reporting related to ESG (Environmental, Social, and Governance), policies related to pay transparency, employee well-being, and the employment of people with disabilities. This is the clear direction in which Europe is going, followed by the practices of Polish companies, which will not change under the influence of what is happening overseas.

Currently, however, only nearly half of Polish companies are familiar with the concept of approaching DEI strategically and only 3% of companies have a formal document dedicated to a diversity strategy (FOB). Few companies are doing DEI well (strategically), some are conducting a number of activities but not measuring them, and in most companies, the topic has not yet been addressed. The moment we are in, pondering the future of DEI, is therefore a huge opportunity that Polish companies can seize to do it effectively and to avoid the mistakes that were made in the US. 

What is necessary for this to happen? First and foremost, DEI activities should be linked to business objectives and consistent with the organizational culture. DEI can't be a series of initiatives, but should be implemented based on a strategy that interacts with policies, processes and norms in the organization in a systematic way, with progress and its effectiveness measured. 

It is also worth broadening the definition of diversity so that we don't lock ourselves into demographic categories, but also take into account the diversity of our experiences and cognitive diversity. This will help us avoid a polarizing narrative by including all employees in our efforts.

Employers want to hire the best talent and expand the pool of candidates. In any team, it is necessary to have a diversity of skills, experiences and work styles that each employee brings, so that we don't limit ourselves into the same solutions and ideas, but strive for a healthy clash of perspectives and innovation. A well-developed DEI strategy sets the direction and facilitates the successful achievement of these goals. We hope that the “Trump effect” will lead Polish companies to adopt a more strategic approach to DEI.

Dora Mołodyńska- Küntzel - Certified trainer and consultant in Diversity, Equity & Inclusion (University of Cambridge) at Punt Kick | Shaping DEI Competence with several years of experience. Lecturer in Intercultural Communication at the University of Wroclaw from 2017-2024. President of the Diversja Association. Coordinator of the Living Libraries Poland network from 2014-2023. LinkedIn Top Voice. She has implemented DEI activities for more than 50 business organizations. Author of publications on inclusive language and inclusive leadership.

Magda Witkiewicz-Gavenda - Diversity, Equity & Inclusion and recruitment specialist and trainer, graduate of the London School of Economics (LSE) in human rights. Founder of EquiLens - a company that supports organizations in creating fair, inclusive and effective recruitment processes. She holds a certificate in Inclusive Leadership Through Behavioural Science (LSE). In her work, she combines years of experience in recruitment in Poland and the UK with research-based DEI knowledge to offer solutions based on data and best practices.

Marta Serafin - HR expert and leader. For years she specialized in technology recruitment, she has been involved in building HR strategy making sure it is consistent with the company's business strategy. She has been involved with the topic of DEI as a strategic direction for companies. She led an ERG called WOD POD (Women of Docplanner -Power of Diversity group) bringing together women in the organization. She has organized the Docplanner Women For Tech campaign, helping women start careers in technology. She is currently associated with Docplanner (in Poland ZnanyLekarz). She is passionate about the topic of diversity, especially women's empowerment in the workplace and society.