DEI withdrawal: Is it also happening in Australia?

A growing number of organisations in the United States are scaling back on their diversity, equity, and inclusion (DEI) initiatives amid growing sentiments against them in the country.

But this spreading opposition against DEI doesn't appear to be limited to the US, according to TDC Global, which pointed out that it is happening in Australia as well.

TDC Global is a consultancy firm that helps organisations succeed by integrating DEI. Its head of marketing, Angelica Hunt, recently spoke to HRD on what they're seeing in Corporate Australia in terms of DEI efforts.

"I think it's really interesting what we're seeing at the moment — and I would define it as a polarisation across the market," Hunt told HRD. "So, there's a really clear distinction between organisations that are committed, that are putting effort and investment into DEI, and then those that are scaling back."

But Hunt said it wasn't surprising to see some organisations in Australia scaling back, as these firms weren't really committed to DEI initiatives in the first place.

"It's the ones that were doing DEI as a tick-box exercise," she said. "It was more of an external branding initiative and, therefore, with the opportunity to scale back, they've taken it."

Repositioning DEI initiatives

However, not every organisation in Australia is withdrawing their DEI initiatives — some are repositioning them.

"What we're seeing for the organisations that we work with year-on-year is not necessarily a scaling back in terms of effort, but I would say, a redistribution of resources across the DEI efforts that they have," she said.

Some organisations are doing it because of limited budgets or reduced resources. Others, however, are being affected by what's happening in the United States.

"Because of the backlash that's coming out of the US, it's a messaging shift," she said. "Organisations are moving away from focusing on diversity as a pillar and more towards inclusion because it's easier to defend."

Impact of US sentiments

The US has been seeing a wave of anti-DEI sentiments over the past months that has seen various organisations, such as Tractor Supply and Harley-Davidson, scaling back DEI efforts due to backlash from their customers online.

Other executives have also been championing a new hiring principle called "MEI," meaning Merit, Excellence, and Intelligence, as an initiative to oppose DEI efforts.

A US Supreme Court ruling last year also declared unconstitutional and unlawful the admission policies of Harvard University and the University of North Carolina that included race as a factor.

Hunt described the Australian market as a "copycat" of the US, where what happens in the US is often seen replicated in Australia.

As a result, organisations in Australia that are seen to preferentially treat certain groups are "fearful" that it could be perceived negatively, according to Hunt.

"Therefore, they're renaming programmes to be less gender-specific and instead using more inclusive terminology," she said. "It's not necessarily that we're seeing them stop the programmes, it's just that they're repositioning them internally."

DEI fatigue also happening

But in actual cases of DEI withdrawal in Australia, Hunt said there are other factors that come into play.

"The first is the economic conditions, and that's not necessarily exclusive to Australia," she said. "In times like these, unfortunately, things like DEI, and even HR budgets in general, are one of the first things to get cut."

There's also a "little bit of DEI fatigue" happening in Australia, according to Hunt.

"That started probably around last year, even before all of this came out of the US. It's a result of DEI being talked about a lot, but the follow-through in terms of tangible action and impact not necessarily being felt," she said.

Despite being talked about all the time, DEI has not seen progress happening at a "considerable rate", so people are starting to push back on it, Hunt said.

"They start to question: 'Why are we doing this? Why are we investing in this?'"

Impact on corporate Australia

With the Australian market copying the US, Hunt said there are emerging concerns about diversity in workplaces.

"One group in Australia that does get preference is Indigenous people, so organisations look at interviewing, hiring, and advancing a number of Indigenous talents," she said.

"So, what we hope is that if what happens in the US flows into Australia, that it doesn't get removed because it's really important to have the representation of our First Nations people in our workforces, and when there is an underrepresentation, you do have to be proactive in bridging that gap, and this is the only way to do that."

Australia's progress on female representation could also be at risk, according to Hunt.

"If organisations start to pull the programmes that are focused on developing their high-calibre female talent, or specifically hiring certain underrepresented groups, then it will impact the progress that has been made, and we already saw that happen during COVID," she said.

Role of HR in DEI efforts

To renew DEI commitments, Hunt said organisations should incorporate DEI into leadership's KPIs and business objectives.

"Another way is to measure and demonstrate the ROI across the investments. So, linked to that, but it's more tangible in terms of sharing not only impact but actual numerical value," she said.

For HR leaders, they have the task of expanding DEI beyond the HR department.

"DEI impacts every area of the organisation, and when you place it just under HR, it diminishes its impact because it can make it really easy to be overlooked," she said.

"Like I mentioned earlier, when budgets get cut, it gets deprioritised."

HR leaders should be the ones driving the initiatives, but they need to get support from the rest of the organisation.

"Their role, therefore, is to rally that support and bring everyone on the journey with the initiatives that are being done and the why behind those," Hunt said.