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Corporate America’s retreat from diversity, equity, and inclusion (DEI) programs may be accelerating, but some former chief diversity officers are warning that the businesses abandoning those strategies could face longer-term talent and performance risks.
Speaking at the Fortune Workplace Innovation Summit in Atlanta, former diversity leaders said the backlash against DEI increasingly risks obscuring the business case behind workforce inclusion initiatives.
Ray Dempsey, now founder of Dempsey Inclusion Group, argued that criticism of DEI has largely been driven by misunderstandings about what those programs are designed to achieve.
While the DEI label itself has become politically contentious, Dempsey said the underlying work remains tied directly to business outcomes and organizational performance.
“They understand that it actually is not just a good thing to do or the right thing to do, it’s not just a social imperative, it’s a genuine business imperative,” Dempsey said.
The comments come after a sharp expansion in corporate DEI hiring following the killing of George Floyd in 2020. Between 2019 and 2022, the percentage of chief diversity officers increased by 169%, according to a LinkedIn study.
But that momentum has since weakened thanks, in the main, to the Trump administration's opposition to DEI workplace initiatives. Between 2021 and 2022, chief diversity officer hiring fell by around 4%, with Dempsey saying the shift has affected executive opportunities directly.
“The chief diversity officer title is not nearly as valuable for corporate board nominees as it was just a few years ago,” he said.
DEI pressure grows under Trump administration
The political backdrop has intensified pressure on employers reassessing DEI programs.
Since returning to office, Donald Trump has signed executive orders targeting DEI initiatives across the federal government, removing DEI-related positions and ending affirmative action requirements for federal contractors.
At the same time, the Equal Employment Opportunity Commission has pursued cases involving what chair Andrea Lucas described as “unlawful DEI-motivated race and sex discrimination.”
Former Nike chief diversity officer Jarvis Sam said some organizations blurred the line between activism and workplace advocacy after 2020, contributing to the current backlash.
Turning workforce data into early warnings for high-cost employees
Still, Dempsey argued the legal foundations shaping workplace discrimination risk management remain unchanged.
“It will still guide the choices and the activities, and it’ll shape the way we manage and mitigate risk around talent,” he said, referencing the Civil Rights Act of 1964.
International DEI directives
The international picture also complicates any wholesale retreat from DEI strategies.
Sam pointed to ongoing European regulation around diversity reporting and affirmative action, including gender diversity requirements for corporate boards in Germany and disclosure obligations under the European Union Corporate Sustainability Reporting Directive.
Research cited in the discussion also continued to frame DEI as a commercial issue rather than simply a political one.
McKinsey & Company research found companies in the top quartile for ethnic and gender diversity were 39% more likely to outperform financially, while studies from Boston Consulting Group, Harvard Business Review and Gallup also linked inclusive cultures to stronger innovation, engagement and retention.
Dempsey said organizations maintaining a visible commitment to diverse workforces would ultimately strengthen their competitive position.
“Those who have sent the signals that that’s not important, that’s not a priority, they are going to lose,” he said.
