Recently, a conservative Think Tank in the US called for the end of DEI efforts at Apple. They cited “litigation, reputational and financial risks” as the reason the tech giant should abolish their DEI measures. It’s vital UK employers take note.
Firstly, because what’s happening across the pond is already having an impact here in the UK. Secondly, because this sentiment reveals something stark: something has gone very wrong with DEI initiatives when hires from minority groups are at risk of being seen as ‘lawsuit risks’.
The Think Tank’s statements weren’t the mere murmurings of an out-of-touch minority. They unfortunately reflect an increasingly mainstream anti-DEI movement in the US, of which the country’s new president is a prominent member. During his last term, Trump signed an executive order that banned diversity training in public bodies and institutions that receive federal funding. And, in his first week back in office this time around, Trump has already issued an order to put all government DEI staff on paid leave immediately.
High-profile companies are at risk of following the President’s lead. Even before Trump’s second term started, the likes of Meta, McDonald’s, Amazon, and Walmart dialled back their DEI initiatives in anticipation of more conservative policies. The former two companies both cited the shifting “legal and policy landscape” – where DEI schemes could be seen as unfairly giving preferential treatment to some groups over others – as their reason for doing so.
Impact on the UK
We’re already seeing the fallout of DEI cutbacks start to spill over to the UK. Meta’s decision to scrap DEI programmes will impact UK staff, and the same thing could happen at other US-headquartered companies operating in this country And whilst I think it’s unlikely that UK companies will take such drastic steps, there is a real risk that the actions of US trend-setting giants encourage British businesses to put DEI on the back burner.
The current economic climate is unlikely to help. Diversity initiatives are often one of the first things to go in times of economic turbulence. It’s a short-sighted, knee-jerk reaction. Research shows that businesses that have greater diversity are more profitable than those that are less so. Teams also solve problems faster if they are cognitively diverse. McDonald’s (one of the companies that cut back their DEI schemes) own senior leadership team said that having a diverse workforce is a competitive advantage. Those who work for diverse and inclusive companies are also more than 5x as likely to stay for a longer tenure, reducing hiring spend for employers.
Championing diversity and inclusion is not only the right thing to do, it’s the logical thing to do. So why aren’t more businesses seeing the value of these schemes, rather than viewing them as lawsuits waiting to happen?
The problem revolves around an overreliance on diversity quotas. In theory, these targets are a good thing. They are designed to compensate for historic and current inequalities, and can help us reach equal representation in workplaces faster – particularly where companies need to be pushed.
The Risks of Tokenism
But diversity quotas are far from ideal solutions – they’re blunt tools. Quotas get underrepresented workers in the door, but don’t guarantee inclusive cultures where these workers feel supported and are able to thrive. Quotas can also act as ammunition for DEI sceptics who claim that certain individuals only got their jobs because they ticked the diversity box.
This leaves workers from minority groups open to being seen as ‘token hires’ – and potentially now even ‘lawsuit risks’ over in the US. As an Asian, female CEO, I am tired of having to defend my achievements as the result of hard work, skill and determination, rather than tokenism. So while I resolutely don’t agree with companies turning their backs on diversity and inclusion, I do welcome a different approach. The focus should be on eliminating biases which inequalities are rooted in, to create a level playing field for all workers. Skills-based hiring offers a solution.
This is a two-step process and starts with anonymising CVs. This stops personal information – like a candidate’s name, pronouns, age and postcode – triggering unconscious biases and influencing hiring decisions. The next step is to use scenario-based ‘skills-based scenarios’ questions to test candidates’ role-specific skills. This ensures that decisions are based on the hire’s ability to succeed in the job at hand, rather than their background. Diversity then follows organically.
A New Beginning?
Our research at Applied shows that an anonymous, skills-based approach increases the number of ethnic minority hires by up to 300%, and increases the number of women hired into senior roles by up to 70%. Plus, there’s no risk of workers being seen as ‘token hires’ or ‘lawsuit risks’ when they have fairly and objectively been judged to be the best person for the job.
We are undoubtedly at a pivotal moment for diversity and inclusion, and I’m hopeful that this will lead to a reimagining – rather than the end – of DEI efforts in the UK. Some UK employers may throw in the towel on certain DEI schemes, but I have every faith that informed companies will choose to build back better.
With approaches based on skills, data and evidence, minority workers need never fear being seen as “token hires” or “lawsuit risks” again.
Khyati Sundaram is the CEO of Applied: a behavioural science-backed tool which helps companies hire fairly and without bias. Before joining Applied, Khyati co-founded her own company and also worked in investment banking with JP Morgan and RBS. She also holds an MSc in Economics from the London School of Economics, as well as an MBA from the London School of Business.
