Working women in the US and the new corporate culture

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Even before Donald Trump took office again, DEI — diversity, equity and inclusion — was a loaded term. Since January 20, it has become a topic of fear and confusion. 

Hours after being sworn in for his second presidency, Trump issued an executive order forbidding DEI efforts at the federal level. Although the ruling does not in fact change anything for private companies, many of them are scaling back DEI initiatives in order to avoid being blacklisted for public sector contracts, or targeted individually by the administration.

Banks such as JPMorgan and Goldman Sachs, leading consulting firms such as Deloitte, and companies including Pepsi, Disney, Meta, Google, Walmart, McDonald’s and Amazon — among others — are all quietly cutting back their DEI initiatives in the US.

At first glance, the pullback appears to be a validation of the White House view that, as Darren Beattie, now State Department under-secretary, infamously put it ahead of the election, “competent white men must be in charge if you want things to work”. Yet the story is more nuanced.

Fear may be driving corporate actions after moves such as attorney-general Pam Bondi instructing the Department of Justice to target private-sector diversity programmes for potential “criminal investigation” — but the DEI backlash has been building for some years. 

After the emergence of the Black Lives Matter movement just over a decade ago, US companies “jumped on the DEI bandwagon”, according to Diana Scott, head of the Human Capital Center at the Conference Board, a US think-tank. Many spent hundreds of millions on initiatives, but with varying results.

In the past couple of years, boards have begun to ask for more solid metrics about the efficacy of diversity program­mes. And quotas, which were contentious and legally tricky even before the Supreme Court ruling overturning affirmative action in university admissions programmes in 2023, have been losing popularity.

None of this is to say that diversity does not benefit the workplace. Some programmes have had a positive impact, and a large body of research shows that companies with more of it do better in terms of share price, return on investment, retention of staff and many other metrics. Corporations that reflect and understand the populations they serve are going to operate more effectively in the marketplace. 

But many companies have taken an uncritical attitude towards inclusion. They use it more as a marketing tool than linked to their core business objectives, and as a substitute for a well thought out strategy for how to attract the best people, regardless of gender, race or ethnicity. 

In this sense, the pause on DEI as usual may be an opportunity for com­panies to reassess their talent strategies. Moreover, if larger macro­economic trends hold, it will be difficult for politics to derail increasing fem­inisation and diversification of the workforce.

Most women not only want to work but need to in order to support families. Dual-income households have been on the rise since the 1980s, thanks in part to a rise in the cost of things that make a middle-class life possible — housing, in particular, but also healthcare and education. More than half of US families with children today have two working parents. 

The jobs that women hold are disproportionately concentrated in the fields predicted to grow fastest over the next several years

Add to this the fact that women are often better qualified than male peers for the job. Even before the pandemic, women represented nearly 60 per cent of college degree holders in the US. After Covid hit, the divide increased, as more men dropped out of school to support families. Meanwhile the brief “she-cession” that occurred when women took care of children during the pandemic has been reversed. Women have made significant gains in upper-level management jobs since 2020.

Finally, the jobs that women hold are disproportionately concentrated in the fields predicted to grow fastest over the next several years, such as healthcare, education and other services.

While companies, and certainly the public sector, will be doing less direct marketing to women and minority groups because of the new executive order, organisations would have to go out of their way not to hire women in fast-growing sectors. This is not about DEI — it’s about ROI (return on investment rather than diversity, equity and inclusion). 

Companies looking for the best talent may simply change the language they use to describe their efforts. Research shows, for example, that while conservatives may balk at “inclusion”, they like the idea of “responsible business”, which they take to mean those that treat employees well, are good corporate citizens and make money. 

While DEI has been politicised, the idea of “diversity, equity and inclusion” may yet be boiled down to something much simpler — fairness.