Why Retreating from Inclusion Is a Mistake for Businesses

Editor's note: Posts published on From the Workplace are written by outside contributors and do not necessarily reflect the view or opinion of SHRM.

Business leaders today face a pivotal decision in the evolving political landscape of diversity, equity, and inclusion (DEI). The executive orders recently issued by the Trump administration have made many organizations reassess their commitment to DEI, uncertain whether to maintain or scale back their initiatives. They’ve also made leaders mistakenly believe they must pause or dismantle their DEI programs to remain legally compliant.

While the executive orders reflect the administration’s view of DEI efforts, there are several misconceptions about what obligations the orders put on private employers. Firstly, the orders do not ban private-sector DEI programs or make diversity efforts illegal. Secondly, no federal law prohibits private-sector DEI programs that comply with anti-discrimination laws. Third, the executive orders do not alter existing workplace discrimination or harassment laws, making employers still under legal obligation to provide discrimination-free workplaces.

Despite these facts, some companies have scaled back their DEI initiatives due to fear or misunderstanding. Others, like Microsoft, Amazon, Apple, Ben & Jerry’s, and more, have taken the counter approach by continuing to focus on DEI. In April, anti-DEI shareholder proposals failed at Goldman Sachs and Levi Strauss. To these companies, building and maintaining an inclusive workforce is not only the law, but also a critical driver of business success. 

Regardless of the political landscape, retreating from any DEI program — especially workplace inclusion — would be a significant risk to any business, not only from a legal standpoint but also in terms of employee loyalty and culture. 

Here are some examples as to why:

• The Talent Factor: In a labor market characterized by talent shortages and shifting employee expectations, businesses cannot afford to ignore workplace inclusion. Employees seek workplaces where they feel valued and respected. A recent report from Traliant supports that sentiment, revealing that among employees who have felt excluded or marginalized at work, over half (55%) considered leaving their jobs because of it. Moreover, broader data supports this trend. A survey by Monster.com found that 86% of job seekers consider workplace inclusivity when deciding whether to join a company and that once hired, inclusion plays a critical role in retention. 

• Resilience and Performance: According to McKinsey, two factors are essential in helping organizations successfully navigate disruption: trust and inclusion. Employees who trust their managers and colleagues are 42 times more likely to exhibit resilience in the face of change. Similarly, the same Traliant report found that employees who feel included within their organizations are about three times more likely than their peers to feel excited and committed to their organization’s missions. These findings highlight the necessity of a well-structured inclusion program that equips leaders with the skills to manage diverse workforces, mitigate liability, and drive organizational performance.

The Importance of Inclusion Training

Inclusion training is one of the most tangible ways that organizations can demonstrate their commitment to fostering inclusive workplaces. However, despite its importance, many training programs remain inadequate. Traliant’s report found that nearly 40% of employees work in environments where the inclusivity courses they’re receiving are insufficient in making a meaningful impact, leaving employees unsure of how they can contribute to a more inclusive culture.

It's also important to recognize that inclusion training is more than just a DEI initiative. Traliant’s report found that employees identified conflict resolution (60%) and active listening (56%) as the most valuable aspects of inclusion training, meaning fostering an inclusive workplace goes beyond policy — it involves cultivating skills that help employees collaborate, resolve conflicts, and build stronger relationships. A well-structured inclusion program enhances performance, teamwork, recruitment, and employee retention.

The Business Case for Inclusion

Scaling back DEI initiatives in response to political pressure is not only unnecessary but also detrimental to business success. A workplace culture that prioritizes inclusion fosters employee trust, increases engagement, and strengthens an organization’s ability to navigate disruption. With major corporations continuing to invest in DEI and data showing the business advantages of inclusive environments, the decision to maintain and expand inclusion programs is not just ethically sound but strategically imperative.

Organizations must ensure that inclusion efforts are not just performative but truly embedded into company culture. This includes keeping training programs updated, equipping leaders with inclusive management skills, and proactively fostering a culture where every employee feels valued. In the long run, companies that remain committed to inclusion will reap the benefits of higher employee satisfaction, greater resilience, and sustained competitive advantage.

Elissa Rossi, Vice President of Compliance Services at Traliant, has practiced employment law and litigation at various law firms, including Boyd Richards and Willkie Farr.