DEI in Crisis: Expert Issues Call to Action for HR

Although many companies have been cutting back on their diversity, equity and inclusion (DEI) efforts lately, Mita Mallick, the head of inclusion, equity and impact at financial software company Carta, says now’s not the time to put DEI on the back burner.

In an episode of the HRMorning podcast “Voices of HR,” she gave an example of how employees can sometimes loudly demonstrate how they feel when it comes to the intersection of DEI and company policies and culture.

“You have companies like Basecamp and Coinbase. … Famously during the pandemic, they came out and said, ‘We don’t want to talk about social justice issues. Employees cannot have a DEI committee.’ One of those companies, in the week they announced [that], they allowed people to leave if they wanted. Thirty percent of employees left. So what that is reminding us is that as soon as [employees] have the vote and the choice of where [they] want to work, [they’ll] decide to work for a company that reflects [their] values,” she said.

“And then you might see Patagonia or Ben & Jerry’s plot it all along the line of where they want to stand, or not stand, when it comes to inclusion work.”

Another company that she cited for getting DEI right is Sephora. According to Mallick, the beauty retailer rebounded from an in-store incident by commissioning a study on racial bias in retail, and then making strategic adjustments based on the data.

DEI Backlash vs. Demographic Reality

Companies such as Bank of America, Goldman Sachs, Tesla and Zoom have all reportedly scaled back their DEI efforts significantly.

When Voices of HR host Berta Aldrich mentioned turnover among heads of DEI at various organizations, Mallick replied, “Many of these roles were never set up for success. The infrastructure wasn’t there. They were figurehead roles.”

Mallick argued that this shift is concerning, especially given changing demographics indicated by U.S. Census data. “Right now in the U.S., 40% of individuals identify as non-white. … That doesn’t include individuals with disabilities, veterans, the LGBTQ+ community and more,” she stated.

The business case for diversity is actually stronger than ever, she said, citing census demographics analysis by Procter & Gamble that estimates multicultural consumers hold over $5 trillion in spending power.

According to Mallick, these figures indicate that having diverse voices within organizations is key to identifying market opportunities and maintaining a competitive edge

Inclusion’s Connection to the Bottom Line

For Mallick, the “I” for inclusion in DEI is particularly important because it’s all about creating an environment where employees feel valued, seen and recognized. She emphasized that when employees don’t feel included, their productivity and potential are diminished. And that can significantly impact an organization’s overall performance.

“How horrible is it to be at work every day and feel like you don’t matter? Nobody cares what you’re doing. People are stealing your ideas. You’re not included to meetings. You’re being dismissed. You’re being minimized. You’re being talked over,” she said.

“I want everyone to go back to work tomorrow and think about, can you be the reason that someone feels included at work? … Is there somebody on your team who seems disengaged, who seems more quiet, who seems less excited about work? What’s going on with them? How can you help out? I want to see more of us intervene in our workplaces. We spend too much time at work not to.”

Addressing Toxic Behavior

Another issue discussed in the episode was the challenge of managing toxic individuals within organizations. Mallick shared that often, leaders protect these individuals due to their perceived value, despite the detrimental impact they have on team morale and retention.

She recommended that HR pros analyze exit interview data and pay attention to possible patterns of toxic behavior, determine if therapy is appropriate for the problematic individual, and possibly start developing a succession plan for that role. This proactive approach can help create a healthier work environment.

Next Steps for HR

Based on Mallick’s insights, here are some actionable strategies to encourage a more inclusive workplace:

• Utilize data: “Whether it’s employee advisory council, whether it’s your people survey [that’s done] quarterly, annually — whatever you’re doing — you’re going to ask people for insights and really study what they’re telling you and what you’re seeing,” Mallick said.
• Watch what’s happening in the marketplace and your industry. What companies are making mistakes related to DEI that you can capitalize on?
• Engage leadership: Educate leaders on the importance of DEI and its impact on the organization’s success.
• Encourage open dialogue: Foster an environment where employees feel safe to voice their concerns and experiences.
• Promote inclusion: Focus on creating a culture where every employee feels they can contribute at their highest potential.
• Create succession plans: Develop plans for transitioning out toxic individuals while ensuring the organization’s needs are met.

She challenged HR and business leaders to ask themselves hard-hitting questions about DEI and unconscious bias. “Have we thought about some of our people processes, [such as] performance improvement plans? Who’s deemed a poor performer and who’s not? Who gets more chances than not? Have we thought about talent calibration? Recruiting’s important, of course — how you attract talent. But how about how you develop and promote talent? Are we doing that fairly and equitably?” Mallick said.

“No longer can you ignore how your brand shows up in the marketplace. … Who are you not serving and why? What community have you completely overlooked? [Then there’s] supplier diversity. … How many small business owners can you be supporting? … Values, you can say you’re ready to stand for them, but when are you ready to stand up for them?”

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