As companies cut diversity roles, here’s what comes next

Daytime Meeting Being Held With A Group Of Diverse People
A recent Revelio Labs analysis found a 33% churn rate for DEI roles at 600 companies engaged in layoffs.
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Good morning!

Last week, I led a panel at Fortune’s MPW Next Gen conference about the impact of layoffs on the DEI space. I was joined by Reyhan Ayas, senior economist at workforce data company Revelio Labs, Neela Rajendra, chief inclusion officer at NASA’s Jet Propulsion Laboratory (JPL), and Cheria Young, founder of organizational culture consultancy Grow There. 

This newsletter has previously reflected on the reversal of corporate DEI functions, with companies disproportionately cutting these roles amid layoffs. The function’s capsizing doesn’t appear poised to go right side up anytime soon. Data analysis from Revelio Labs found “a 33% churn rate for DEI-related roles at more than 600 companies engaged in layoffs, compared to 21% for non-DEI roles,” my colleague Ellen McGirt wrote in her review of the data earlier this year. 

But it doesn’t have to be that way, and leaders have the power to stanch the bleeding, said Ayas, Rajendra, and Young. Here are some highlights from the conversation.

Align DEI with the business. DEI roles not tied to business initiatives or woven into the core strategy will likely get the axe. Many companies hired employees to perform DEI work but separated business plans and DEI plans, said Young. “That’s just simply not how this works.” DEI needs to be fully integrated into the culture and lockstep with the company’s broader strategy, she said.

Put culture first. Create a culture that supports and promotes inclusivity and psychological safety, which are door openers for DEI, said Rajendra. “The particular challenges that JPL has faced actually forced us to take a hard look at our culture and how we create and engage our teams in a way that enables everyone to speak up.” Rajendra described a “major slip” in which the Psyche mission missed its original launch window. JPL’s leadership asked outside partners to review its culture, workforce, and missions internally to discover what went wrong. “One of the findings was that in our academically-minded effort to find the flaw, which is ingrained in JPL’s culture, we were creating a culture of fear,” she said. “If you did not show up as a person who had been at JPL for 30-plus years and had launched several missions, you didn’t feel safe to speak up.”

Avoid DEI theater. Ayas warned executives against acting in performative ways. In other words, discussing DEI without supporting action and strategic initiatives. “What we find is even in the post-George Floyd world, when ESG and DEI were taken to center stage, this did not really impact the share of new hires who were Black,” she said. While there was more hiring in the DEI space, many organizations saw little representation change. Ayas advised leaders to address systemic issues by “finding the right resources [and] the right mindset to make a change” rather than DEI theatrics.

Watch the entire conversation here

Amber Burton

Reporter's Notebook

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Around the Table

A round-up of the most important HR headlines, studies, podcasts, and long-reads.

- Recent college graduates are having difficulty nailing down employment as job openings decreaseBloomberg

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- Over half, 56%, of employed adults believe companies focusing on DEI at work is “a good thing.” Pew Research


Everything you need to know from Fortune.

ChatGPT at work. Amazon, Goldman Sachs, and Verizon have all banned or restricted the use of ChatGPT in the workplace. Many cite privacy risks. —Paige McGlauflin

RTO CEOs. A recent Fortune poll finds 87% of CEOs now spend four days or more in the office each week, and 34% expect their employees to do the same in the coming year. —Alan Murray

Leadership planning. Morgan Stanley CEO James Gorman announced he would step down in the next 12 months. Though a successor has yet to be named, he shared the importance of creating a leadership pipeline. “You plan a generation of people who can take over." —Chris Morris

WFH debate. While leaders like Elon Musk and Shark Tank star Kevin O’Leary continue to debate the morality of working remotely, workers have said they would prefer to work somewhat flexibly if given the choice, according to a recent McKinsey & Company study. —Eleanor Pringle 

This is the web version of CHRO Daily, a newsletter focusing on helping HR executives navigate the needs of the workplace. Today’s edition was curated by Paolo Confino. Sign up to get it delivered free to your inbox.

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