The DEI landscape is shifting to amplify inclusion over diversity.

In the months since the U.S. Supreme Court struck down race-based admissions policies at colleges and universities, businesses have reported an uptick in U.S. Equal Employment Opportunity Commission complaints, state-level legal actions, and legislation targeting corporate DEI programs. Political polarization and backlash against DEI are not going to subside. Leaders responsible for DEI efforts within organizations, however, aren’t abandoning the work. Momentum is sustained, but leaders are cautious.

When asked if the current state of DEI were impacting progress within the organization, one member said, “I would answer that it’s affected the words we use and some of our initiatives, but it hasn’t changed our focus or our strategy.” This was echoed by many survey respondents and those who were interviewed. DEI leaders are assessing and realigning their strategies and approaches closely with advisement from internal and external legal counsel.

The most noticeable shift is toward approaches that focus more on inclusion and less on racial and gender considerations. Companies are acting preemptively to guard against legal threats. Ranmali Bopitiya, EVP and chief legal officer at Oscar Health, advised, “Talk to your general counsel to understand what they are seeing and what it means for your risk profile, as it will be unique to each company.”

Celeste Warren, vice president of the Global Diversity and Inclusion Center of Excellence at Merck, shared, “Shifting our focus from the cohort to the content enabled us to foster more inclusive communication. By reminding colleagues that learning from peers is the goal, we ensure that no one feels excluded or left behind.” The EBRGs at Merck were, and continue to be, open to all employees to support inclusion and allyship.

Karine Vasselin, vice president and group diversity and inclusion lead at Capgemini, shared that this current climate creates an opportunity to have an open and transparent conversation about equality and advantage: “It’s a question of balance, and the objective is to restore equal opportunities and not create unfair advantages. So, it’s really important that everybody recruited or promoted meets the skill and performance criteria. This remark was not coming only from our male colleagues but from women colleagues who were saying, ‘I am a talent. I am a business professional. I don’t want to be seen as a woman talent or woman business professional because some people may question my skills and my performance level.”

Carlos Sarmiento, diversity and inclusion director at Schlumberger, created an inclusion index that breaks down inclusion into seven components: fair treatment, integrating differences, decision-making, trust, psychological safety, belonging, and diversity. “The moment we shifted our focus from diversity to inclusion, we introduced a holistic perspective that everyone can embrace—and that has enhanced our culture globally,” he said. Patrick Sochkinhoff, chief DEI officer at Sodexo, was adamant that organizations have to move from a one-dimensional view of diversity to support employees embracing themselves at work. “We are embracing the dimensions of diversity,” he said. “Inclusion is about the multiple identities of our employees and customers.”

No matter how the approach evolves or the language changes, the fact remains that there is a positive correlation between a diverse workforce and financial success. According to a 2023 study by McKinsey & Company involving more than 1,200 firms worldwide, companies with the highest racial, ethnic, and gender diversity were 39% more likely to financially outperform their counterparts. Gloria Goins—chief diversity, equity, and inclusion officer at Cisco—summed up the impact of DEI on the future of business: “DEI is because the world has changed and is changing. The psychographics and the demographics aren’t going away. [Generation Z] in less than two years will represent 30% of the global workforce; 48% of them are people of color, 20% of them are LGBTQ+. Two out of four of them say, ‘I would rather be unemployed than work for a company that doesn’t align with my values.’ If you connect it right back to the business, this is about your business. This work is not going away.”

For more information about joining our Inclusion & Diversity Impact community or for further questions, please contact Jennifer Bird Newton, chief impact officer at World 50 Group, at jennifer.newton@world50.com.

Oscar Health: Navigating the Legal Side of DEI

As the legal landscape surrounding DEI is in a state of flux, refrain from reacting to every lawsuit filed, as it may not reflect future legal standards. Ranmali Bopitiya, EVP and chief legal officer at Oscar Health, advised exercising patience and relying on your general counsel’s guidance. Talk to your general counsel to understand what they are seeing and what it means for your risk profile, as it will be unique to each company. The DEI leader and general counsel should collaborate to observe trends and navigate its implications for the company.

While the college admissions case under Title VI of the Civil Rights Act pertains specifically to educational institutions and not private employers, it serves as a noteworthy reflection of the current legal landscape. There has been a surge in challenges targeting corporate grant and fellowship programs aimed at fostering diversity among applicants. But, programs that prioritize broad recruitment pipelines, inclusive workplaces, and dismantling barriers to success remain entirely lawful. Companies can strive for a diverse workforce but cannot take protected characteristics into account when making decisions.

Hiring and promotion decisions must be based on merit alone, fully independent of statistical representation. “When everything’s up in the air, it’s even more important to be grounded in what’s important,” said Bopitiya. “Make decisions based on your company values, as you might be in the position of defending them later.” Accountability becomes more readily achievable when DEI objectives align with business objectives. Oscar Health introduced a program named “Hola Oscar,” aimed at enhancing the health care experience for its Spanish-speaking customers. Content within this initiative is developed by those fluent in Spanish, ensuring that Spanish-speaking customers can fully comprehend their health insurance benefits. This initiative corresponds with Oscar Health’s strategic imperative of crafting a product that resonates with its diverse customer base and fosters loyalty. As the company’s growth projections hinge on its ability to cater to customer needs effectively, accountability permeates every facet of the organization. “Every team was working on DEI work, but it was just the work,” said Bopityia.