For HR, the question is no longer whether to invest in inclusion and diversity (I&D) initiatives, but how to position I&D as an advantage in terms of both compliance and competition.
In a season of tight labor markets, shifting federal priorities, and increased legal scrutiny, organizations that treat I&D merely as a compliance exercise or social campaign are falling behind. It is essential that HR leaders frame I&D not as simply a checked box, but as an operational and merit-aligned necessity.
“Saying how I&D will help improve safety and profitability, supported by data and examples, is a stronger lever for organizational change and support than maintaining [that] the organization must address broad-based societal and historic injustices,” said Stephen Paskoff, president and CEO of Employment Learning Innovations Inc.
For such initiatives to be successful, I&D must be legally compliant, workplace unifying, and business accretive. When I&D best practices are woven into hiring, promotion, and leadership pipelines, they stop being a standalone project and start being how the organization runs.
"Studies have shown that groups with diverse perspectives are more creative, innovative, engaged, profitable, and productive."
Christy Kiely
Attorney, Seyfarth Shaw LLP (Richmond, VA)
Political and Economic Pressures
Changes in federal policy and general economic anxiety have triggered a seismic shift in the I&D landscape amid a spate of 2025 executive orders (EOs) and enforcement actions from the U.S. Department of Justice (DOJ) and Equal Employment Opportunity Commission (EEOC).
Despite the government’s scaling back of I&D regulations, it would be a mistake to dismiss these programs as a thing of the past: While 31% of U.S. workers believe the EOs herald the end of workplace I&D, 44% remain comfortable discussing inclusion efforts. Even as the regulatory environment evolves, employees continue to value I&D initiatives. Navigating the revised legal terrain is well worth the opportunity for workplace unification.
Economic instability is also demanding greater accountability from those tasked with workforce recruitment. With budgets shrinking, HR leaders must defend I&D strategies, demonstrating how efforts contribute to broader business goals. “It’s vital that they get senior and other leaders to recognize that DEI [diversity, equity, and inclusion] is tied to the organization’s operational success,” Paskoff said.
Rather than treating these initiatives as stand-alone programs, HR may find greater success embedding them into performance and growth strategies. “Many of the actions which drive I&D cost no money,” Paskoff noted. “For example, if leaders regularly and briefly discuss the importance of DEI in workaday meetings with their own group’s examples, that will help drive DEI forward.”
The future of I&D lies in legally compliant, workplace unifying, and business accretive models. The best programs will spotlight measurable results such as retention, engagement, or innovation. Quantifiable outcomes mean more than symbolic efforts that merely communicate good intent.
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While 31% of U.S. workers believe the EOs herald the end of workplace I&D, 44% remain comfortable discussing inclusion efforts.
Toolkit
BEAM Toolkit: Foundations of Legally Compliant Inclusion and Diversity
This resource equips organizations to build fair, merit-based workplaces where every employee can contribute and succeed
Going Forward: Agile Compliance
In 2026, the emphasis will shift toward quantifying the return on investment (ROI) of I&D. In this regard, HR leaders have every reason to be optimistic: Research shows that companies with a mix of male and female executives are 39% more likely to financially outperform others. Companies prioritizing ethnic diversity among executives were also 39% more likely to financially outperform others.
“Studies have shown that groups with diverse perspectives are more creative, innovative, engaged, profitable, and productive,” explained Christy Kiely, an attorney with Seyfarth Shaw LLP in Richmond, Va.
To ensure I&D initiatives are financially fruitful, companies will want to use metrics to assess the programs’ direct link to productivity. “ROI measurements should track specific behaviors and actions which represent I&D practices and their impact on performance results and risk management,” Paskoff recommended.
I&D programs don’t have to break the bank, either. “Employee resource groups (ERGs) or business resource groups (BRGs) are a great example, as they can drive I&D initiatives internally,” Kiely said. “ERGs/BRGs are wholly permissible so long as they’re open to everyone and genuinely welcoming of all interested persons.”
The key is to pair agile compliance frameworks — which anticipate and adjust to evolving legal expectations — with the inherent strengths of diverse workforces. Organizations can proactively leverage such differentiators through knowledge transfer and reverse mentoring programs, in addition to engaging in age-inclusive hiring, all of which guarantee that inclusion efforts are both strategic and sustainable.
Seminar
Business Acumen: Aligning Business Operations and HR
Strengthen your strategic impact with this SHRM seminar. Equip yourself to seamlessly connect people strategies with business objectives, drive organizational performance, and demonstrate measurable ROI.
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Companies with a mix of male and female executives are 39% more likely to financially outperform others.
Diversity Matters Even More: The Case for Holistic Impact, McKinsey
Metrics That Matter
As the political and regulatory environment changes, many companies are adjusting their I&D messaging. Critically, they are not abandoning I&D but, rather, reframing it by embedding programs into corporate governance. While it is now less publicly visible, I&D remains a long-term business priority.
Not every executive may be aware of the ways in which I&D is business accretive. It thus falls to HR to ground I&D projects in evidence and strategy.
“What’s absolutely vital is that work leaders be able to give their team members specific examples, ideally drawn from their own organization or others in their field, where inclusive practices helped drive performance or their absence caused extraordinarily harmful and even catastrophic results,” Paskoff said.
To demonstrate tangible business value, metrics should include retention, time-to-fill, internal mobility, and sales performance, among others.
Webinar
Business Accretive Diversity: Building an Inclusion Strategy That Drives Value
Unlock the true business value of inclusion and diversity by learning how to design strategies that drive productivity, innovation, and profitability—not just compliance.
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A dedicated I&D scorecard, updated every quarter, can link inclusive practices to outcomes including:
- Increased collaboration and innovation.
- Reduced turnover and absenteeism.
- Enhanced market insight and customer relevance.
- Stronger financial performance.
Actionable Strategies for HR
HR professionals must convince leadership to embrace inclusion and then work alongside them to enact initiatives. Specifically, they must demonstrate how I&D “affects day-to-day interactions and is a vital ingredient of operational excellence, contributing to core operational necessities such as profitability, safety, innovation, client satisfaction, organizational reputation, and overall results and resiliency,” according to Paskoff.
I&D is not a box to check or a single task to complete. “Inclusion must ultimately be a part of each organization’s cultural DNA,” Paskoff said, “and not an annual once-and-done talking point too often quickly forgotten and discarded.”
I&D is not a social cause that companies can adopt at their leisure. It is a measurable performance and risk-management tool that has been proven to improve business performance. HR leaders should create programs that are disciplined, driven by data, and legally sound, thereby earning leadership buy-in by proving that inclusion isn’t charity, but smart business.
HR professionals can follow these steps to create or review their I&D programs:
eLearning
Talent Acquisition: Inclusion & Diversity in the Talent Acquisition Space
Take your I&D strategy from concept to execution with this SHRM eLearning course. Empower your organization to move beyond compliance and unlock measurable results with actionable insights from industry experts.