USA 
United Kingdom
As Donald Trump returns to the Whitehouse, his administration has wasted no time taking a sledgehammer to the diversity, equity, and inclusion (DEI) policies championed during the Biden era. So, what next?
Within days, executive orders and directives were issued to halt federal DEI programs, placing officials on paid administrative leave and dismantling related offices. The orders not only target federal initiatives but are also aimed at influencing private sector practices through federal contractor compliance requirements.
The Trump administration’s actions are rooted in a commitment to what it describes as a “merit-based society.” He and his supporters argue that DEI initiatives undermine traditional “American values” of hard work and individual achievement, framing the policies as discriminatory and divisive.
His executive order explicitly condemns what he refers to as “identity-based spoils systems” and encourages private companies to follow suit in abandoning DEI efforts.
Federal contractors and subcontractors will be required to comply with the new rules. The administration has also directed agencies to investigate private companies for compliance with civil rights laws, signalling potential legal and regulatory challenges for businesses maintaining DEI programs. Conservative groups are likely to amplify these efforts, pressing companies to dismantle diversity initiatives under threat of reputational and financial consequences.
With all that going on, you could be forgiven for thinking that DEI is on the ropes, on its way out, finished. But data from Gartner says that couldn’t be further from the truth. Asked post-election, some 70% of HR leaders expect no change in their organization’s level of commitment to DEI initiatives. Only 5% believe we will see a significant decrease.
Some 35% do believe that DEI initiatives will face legislative restrictions, but then 38% say they don’t expect such projects to face any potential pressures. A certain amount of that doubt may have dissipated over the last few days as Trump’s intentions have become clearer.
But nobody is running scared and there is still much to play for.
Impact on employee morale
One of the most immediate effects of the policy changes is on employee morale, particularly among underrepresented groups. Federal workers in DEI roles now face a difficult future, with many placed on administrative leave, and their roles almost certain to be canned. Beyond the public sector, employees in private organizations that choose to scale back DEI efforts may feel alienated or undervalued.
Diverse workforces are essential for innovation and reflecting a global customer base. Eliminating DEI programs could exacerbate existing inequities, leading to dissatisfaction and attrition among employees who feel their contributions and identities are no longer valued. The perception of a hostile workplace could deter potential hires, particularly among younger, more diverse generations entering the workforce.
Further job losses are a highly likely consequence, particularly for professionals specializing in DEI roles. As businesses reevaluate their diversity strategies in light of government pressure, DEI-focused positions may be scaled back or eliminated entirely, creating a ripple effect, that influences industries such as consulting, training, and recruitment that rely on diversity initiatives.
Risk of consumer boycotts
For businesses, the decision to maintain or abandon DEI programs is fraught with strategic implications. Companies like Meta, McDonald’s and many others have already rolled back their initiatives, aligning with the federal government’s stance and responding to conservative pressure in the media. Others, however, such as Costco, Apple and Microsoft, remain steadfast in their commitment to diversity, citing the strategic business case for inclusion and innovation.
Organizations that disband DEI initiatives may face backlash from progressive investors, employees, and customers who view these programs as essential for addressing systemic inequities.
Conversely, companies that uphold DEI values risk boycotts from conservatives opposed to such policies. It places businesses in a precarious position, as they navigate competing demands from stakeholders with divergent views.
It is worth opponents of DEI noting, however, that according to McKinsey, Black consumers’ collective spending power in the US is set to expand dramatically, from about $910billion in 2019 to $1.7trillion by 2030. Data on power of the more rural dollar is not so prevalent.
Response from DEI supporters
Opponents of Trump’s policies have already begun mobilizing to counter the changes. A coalition of Walmart shareholders, representing over $266billion in assets, recently called on the company to reconsider its decision to scale back DEI efforts. Their letter emphasized the business risks of abandoning diversity initiatives and requested a recommitment to strategies that reduce bias and systemic barriers.
Similarly, a group of Democratic state attorneys general has challenged Walmart’s rollback, arguing that such decisions alienate customers and employees while undermining the company’s stated values. There is a determination among DEI supporters to hold businesses accountable and advocate for inclusive practices.
Potential future developments
As the Trump administration continues to implement its anti-DEI agenda, several key developments are likely.
Federal agencies may intensify investigations into private companies’ compliance with civil rights laws, creating legal challenges for businesses maintaining DEI programs.
Companies are likely to adopt divergent approaches to DEI, with some aligning with federal directives and others reaffirming their commitment to diversity.
Building a Winning Team: The Power of Effective Hiring and Background Checks
Building a strong team isn't just about filling positions; it's about building the foundation for your business’ success.
Our research found that most HR and talent acquisition leaders (69%) are extremely or quite confident that running background checks improves their quality of hire. Further, 68% believe that background checks can effectively decrease time-to-productivity and 61% believe they help reduce turnover. Effectively utilizing background checks is an investment in your team’s success.
Learn how large employers are prioritizing more efficient, effective background check processes to elevate their quality of hire.
Download this report to learn:
How to keep top talent engaged
Methods to help employers make informed hiring decisions
Why effective background checks are an investment in your team
Both employees and consumers are expected to play a significant role in shaping corporate policies one way or the other. Progressive stakeholders will pressure businesses to uphold DEI values, while conservative activists will continue to push for their elimination. They might be late to the party, but expect DEI proponents to begin pushing back on social media and elsewhere.
Businesses that maintain DEI programs may attract diverse talent and customers but face boycotts from conservative groups. Conversely, those abandoning DEI initiatives may risk alienating progressive stakeholders and losing access to a diverse talent pool. Turbulence will be the over-arching theme, perhaps generally over the next four years.
As companies wrestle with the decision to maintain or abandon diversity initiatives, they must carefully consider the impact on employee morale, brand reputation, and yes, profitability.
The response to these changes reveals the complexity of the issue. For supporters of DEI, the fight to preserve inclusive practices will require persistent advocacy and collaboration. Meanwhile, businesses will be forced to traverse a divided landscape, balancing the demands of different stakeholders while adhering to evolving regulatory demands.
It’s hard to predict what will happen over the next four years but the only thing that is guaranteed is that there will be plenty to talk about.
