Regardless of what side of the political aisle you’re on, whether you like or don’t like the executive orders regarding hiring practices, you’re likely looking for some clarity re: the new dos and don’ts of DEI v2. For sure our convos about DEI are changing. Many employers, including PACE, are trying to figure out how to retain the best parts of DEI, while saying goodbye to the more controversial elements of DEI implementations that are now considered problematic.

This blog is written to share views of DEI offered by SHRM – our national HR professional trade association. I recently took the time to read thru several SHRM (Society for Human Resource Management) articles on this topic including their recent guidance that I thought might be helpful – both to those saddened by the change in DEI’s legal status, but also those who have been critical of some components of DEI initiatives.

Keep in mind SHRM has actually been ahead of this DEI v2 trend, creating waves for itself back in mid 2024 by announcing a decision to remove the E (EQUITY) component from the DEI acronym. Their rational at the time was that the EQUITY term had generated too much backlash (or confusion) to be helpful and had, like many DEI initiatives, lost its link to organizational performance. While their critics claimed this decision put SHRM too far over it’s skis, it was hard to argue with their intent to ante up their focus on DIVERSITY and INCLUSION which they claimed had more potential to actually impact organizational performance.

In hindsight SHRMS course change might be considered prescient.

What was the problem with DEI’s STATUS QUO?

Since the culture changing civil rights Executive Orders in 1972 some form of DEI has been in play, signaling a moral and societal duty to support a variety of DEI like iterations. Unfortunately many of these DEI iterations while achieving societal goals, fell short when it came to achieving tangible results for the organizations who sponsored them. More recently many public companies have been forced to put their DEI budgets and programs under shareholder scrutiny, criticized for being a standalone distraction to company missions and shareholder interests. SCOTUS recently put an end to affirmative action hiring practices, in some ways putting a nail into a coffin whose lid was already being closed.

Even SHRM has agreed that traditional DEI initiatives, focused on representation and fairness, weren’t able to create a measurable connection between the new and improved opportunities they were creating for individuals and overall organizational performance. SHRM’s comments were particularly telling given their long standing advocacy of the notion that the role of HR is to sit next to the CEO with a clear focus on rationalizing the link the between its HR work and organizational performance/profits.

Here’s some of the specifics of their recent comments about why we are now into DEI v2:

• While DIVERSITY initiatives were able to achieve highly visible improvements in the hiring of traditionally underrepresented groups they fell short when addressing the follow up issues re: their retention and/or promotion. Unfortunately, this issue surfaced at a time when the whole country was facing unprecedented rates of turnover (i.e. the GREAT RESIGNATION).
• While EQUITY initiatives successfully analyzed the “fairness” of the outcomes being achieved on behalf of underrepresented groups, they were not successful in addressing the root causes of some of those disparities. While highlighting the problems with “representation” they provided no solutions that would remedy the disparities without treating some categories of people differently.
• While INCLUSION is now universally understood to be a critical element of a productive workforce, it was often taken one step too far, promoting more opportunities for segmentation than it did for connections.

What’s Next?

I particularly liked the four core principles of SHRM’s revised D&I initiatives particularly because they were based on actual research re: the measurable links between activity and impact. Here’s the key elements of SHRM’s new framework……. 

•  A focus on MERIT when it comes to hiring and promotional practices – policies and practices focused on measurable skills and historical performance, minimizing opportunities for bias.    
• A focus on ACCESS to OPPORTUNITIES rather than outcomes, encouraging companies to expand their recruiting pipelines and communication channels to ensure everyone is given access to opportunities and feels welcomed when responding to them.
• An emphasis on the importance of CALIBRATION and MEASUREMENT – encouraging companies to build and consistently use data and objective measurements to evaluate the performance of all employees.
• Making INCLUSION an integrated component of operational performance – not an add on initiative. The goal is for no employee or job candidate to be left behind or feel uninvited; that differences are valued; that all employees be given a chance to have influence over things that impact them. They have recommended that a leader’s ability to foster inclusion become a key measurement of their success in the leadership role.       

These 4 pillars of DEI (or is now D&I) remain in tact even in the face of new executive orders directing the wind down of DEI in federal contracting. SHRM considers this new framework to be both practical and transformative – “a standard for operational excellence and societal impact” and “a way to reimagine the workplace as a space where talent knows no boundaries and inclusion drives innovation.” Aspirational for sure…but at least it leaves us with an aspiration, not a disappointment.

FINAL THOUGHT(S)…..

What are your thoughts on the DEI v.2? How do you plan to keep the best parts of DEI in tact while migrating to more merit based systems of hiring and promotion?