^{PILLAR 3}
Diversity,
equity and
inclusion (DEI)

PILLAR 3

Diversity, equity, and inclusion (DEI)

In recent years, businesses have made major commitments to DEI and have made progress. Now, however, some appear to be backtracking. Underrepresented talent say they have no choice but to walk away from companies with failing cultures.

This year’s research casts doubt on whether businesses can, or even want to, maintain momentum on DEI. More than half of executives (53%) say their organizations are failing to create an inclusive culture, a level we last found in our 2022 Re:work survey and following a small improvement in 2023.

Worryingly, one in four executives (24%) says that supporting DEI is less important than two years ago. Moreover, only 34% of executives—and just 29% of C-suite leaders—agree that diversity directly supports business performance. Almost half (49%) say their organization only pays lip service to supporting talent from underrepresented groups.

Organizations are stalling on DEI

Fighting DEI fatigue with a better assessment of ROI

The issue of DEI fatigue, which we identified a year ago, has spread, says Keilon Ratliff, Chief Diversity Officer at Kelly.

“We see a lot of DEI fatigue. Some companies that had chief diversity officers are eliminating those roles. Some are eliminating their diversity teams, or they are tucking them up under other departments.”

The result has been a loss of momentum. “There’s not the same focus, and not the same investment,” Ratliff says.

Yet the business case for inclusion is undiminished. Organizations may need to reset by revisiting their assessment of DEI’s value. “Companies need to look at inclusivity as an asset. You need to understand the return on investment,” Ratliff explains.

Keilon Ratliff
Chief Diversity Officer at Kelly

Senior leaders’ views on DEI compared with executives overall

Open up new routes into employment to fill tech roles

One of the drivers for employers to develop fresh thinking around education credentials is the pace of the digital revolution, Sean Perry explains.

“The Kelly Equity@Work initiative focuses on a candidate’s whole experience and what they know, rather than on credentials. That’s especially important in tech because, over the past seven to 10 years, there’s been a huge transition away from entry-level developers coming through college and getting degrees in computer science.”

As a result, employers have to recognize that there are different routes to learning digital skills. “You can find great talent who have just picked it up. They might have been focused on some other area of tech, and now they have these skills that you need. Plus, they have the work experience.”

It adds to the business case for employers to move away from education credentials as a main hiring criterion. “Look at what someone’s job experience is and what their capabilities are, rather than just looking for degrees or qualifications.”

With that approach, employers can benefit from reaching often-overlooked groups of potential employees, Perry says. “I’ve found veterans and disadvantaged youth to be extremely capable sources of entry-level talent for roles such as QA testers, service-desk support, and project-management functions,” he explains.

Some recruits will have undiscovered potential, Perry points out. “The top performers will rise to other roles and progress up the organization. You can grow those who are really hungry for an opportunity into great contributors.”

Sean Perry
Chief Information Officer, Kelly

Talent could walk away over leaders’ failures on DEI

Our employee survey reveals a substantial portion of talent is critical of their leaders on DEI, saying that leaders are poor at reflecting diversity (30%) and creating a sense of psychological safety (31%).

For some employees, the result of perceived leadership failings on DEI is all too tangible. Employees who identify as being part of an underrepresented group are far more likely than others to have experienced non-inclusive behaviors at their current employer.

Talent’s assessment of leader behaviors

For example, 35% of employees from ethnic or cultural minorities report feeling excluded or alienated by their current employer, compared with 14% of talent overall. Talent from LGBTQIA+ communities are by far the most likely to report workplace discrimination.

Underrepresented groups’ experiences of non-inclusive behaviors

Perhaps as a result, employees from diverse backgrounds are almost twice as likely to say they might leave their employer in the next 12 months.

Employees from underrepresented groups are far more likely to leave their employers

Insights from the Index:
Outdated attitudes towards DEI abound

In some respects, the DEI pillar shows the greatest similarities between Resilience Leaders and other organizations. For example, only about one-third of executives believe that diversity directly impacts business performance across Resilience Leaders, Laggards, and Mid-market Performers alike.

Yet their approaches—and DEI outcomes—contrast starkly. Some 77% of Resilience Leaders report that a C-suite leader has responsibility for DEI, compared with only 5% of Laggards (and 24% of Mid-market Performers). More than half (53%) of Resilience Leaders offer flexible and hybrid work for employees at all levels (where practicable). Nevertheless, still only about one-quarter (26%) of Resilience Leaders assess managers based on meeting DEI objectives—slightly more than Laggards (23%), but fewer than Mid-market Performers (32%).

Mental health and wellbeing

As the COVID-19 pandemic has receded, mental health has become a priority for many employers. Yet around two-thirds of organizations still appear to neglect wellbeing and mental health, with only 36% of executives saying that they offer adequate employee support in this area. Just 22% say their organization has a culture where it’s acceptable to disclose mental health issues.

Resilience Leaders are much more likely than Laggards to offer adequate resources (54% vs. 28%). They are also more likely to foster a culture that accepts disclosure of mental health problems (33% vs. 19%). Nevertheless, that still leaves two-thirds of Resilience Leaders currently failing to destigmatize mental health issues.

Organizations are under-prioritizing wellbeing and mental health

Talent perspectives on mental health

The picture painted by the executive survey—that wellbeing is still too low a priority—is supported by our talent survey. Our data makes one thing clear: organizations that fail to invest in wellbeing and mental health will lose the competition for talent.

There is a clear link between employees who perceive that their organizations are performing poorly on wellbeing and their intention to leave their organizations within the next 12 months.

For example, only 13% of “leavers” say they enjoy a satisfactory work-life balance and a manageable workload, and only 12% believe their employer cares about their mental health—compared with 74% of “stayers.”

Talent’s views on their work and wellbeing

The same split is evident in how talent assesses employers’ policies and practices. Just 14% of leavers feel their organization offers adequate resources, and only 8% feel their organization deserves a positive grade for its support of employee mental health.

Talent’s views on employer support for wellbeing

Of course, wellbeing and work practices also intersect with DEI. Our talent survey data reveals that high workloads and an inflexible work environment continue to concern employees—especially women.

Causes of workplace stress

The result is that women are far more likely than men to quit their current employer in the next 12 months.

Women are more likely than men to leave their employer