Spending Up on DEI, but Economy Could Hamper Efforts


The recent Supreme Court ruling on affirmative action and a slew of threatening letters from advocacy groups to employers have combined with economic uncertainty to temper hopes of continued progress in corporate DEI programs. But those rumors, as the saying goes, may be greatly exaggerated.

In a survey by Capterra, 58% of HR leaders said their companies are placing even higher importance on DEI this year than they have in previous ones. Only 8% of those with a dedicated DEI budget experienced any reductions during 2023.

However, less than a third believe their initiatives would be secure during an economic downturn, the survey said.

Brian Westfall, principal HR analyst at Capterra, sees an “overwhelming sense of resilience among organizations regarding their DEI initiatives.” While the economy “not tanking certainly helped,” HR leaders said the court’s decision played a role, as well. “If entry-level workers with college degrees become less diverse, the impetus falls on companies to seek out and hire diverse talent,” he said.

Some 86% of HR leaders agreed that the Supreme Court’s decision puts more pressure on employers to improve and monitor DEI. A majority, 69%, said their company is investing more money in both DEI training and DEI software this year than it did in 2022. More than two-thirds, 67%, said they’re investing more in dedicated DEI headcount and diversity recruiting resources.

Nearly all of these leaders, 96%, have dedicated DEI software or HR software with DEI features. Of those, 55% use the software to administer DEI training modules, while 50% track progress toward DEI goals and 50% use it to manage employee resource groups. Many also use their software to get feedback on their programs or report DEI metrics.

The Ice is Thin

That doesn’t mean the support for DEI programs is rock solid. Only 30% of HR leaders believe the initiatives are secure during an economic downturn, which means laying down a foundation for permanency is essential, Capterra said.

“DEI programs are doing well now, but that doesn’t mean they’ll stay intact if a recession actually happens,” said Westfall. “HR leaders who want to promote DEI need to do the work now to cement their program’s standing in the organization and convince executive leadership that DEI investments should be spared from deep spending cuts.”

Programs that actively communicate are better positioned to whether a choppy economy, the survey found. Over half, 53%, of HR leaders whose companies share DEI communications through digital channels at least once a week strongly agree their leadership won’t sacrifice DEI in tough times. Only 22% of HR leaders who share such communications at least once a month agreed.

Image: iStock

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