The diversity, equity, and inclusion (DEI) folks are definitely facing some new legal and cultural challenges. Fueled by recent Supreme Court rulings and a series of Executive Orders, we’ve seen the DEI departments in large enterprise organizations significantly scaled back or eliminated altogether. Cutbacks in the budgets dedicated to DEI initiatives have reduced the number of consulting and training contracts devoted to DEI. Private entities and government agencies alike are starting to ask questions about the role DEI can play in their organizations in the future.
Many of these changes came as no surprise. SCOTUS has been weighing in on affirmative action issues since the early 70’s. Industry leaders and HR professionals started prepping for changes in mandated hiring quotas implied in the latest SCOTUS rulings since early 2024. High profile companies made very public announcements to either shut down or curtail traditional DEI initiatives, but always took care to explain that these changes were driven by budgetary constraints or re-orgs of where the DEI efforts would be located. Most if not all these public announcements made it clear that their changes did not compromise ongoing commitments to the basic tenants of DEI – fairness and inclusivity.
As the sea of change is starting to settle in, most HR experts acknowledge that there is a bridge to cross between employment practices that enhanced representations of protected classes and practices that needed to become more merit based. We see most companies taking care to navigate that bridge carefully – i.e. trying to retain all that is good about DEI while acknowledging new legal boundaries for the processes used to decide who to hire and/or promote.
No question, a company’s hiring hiring process is one of the most visible processes that will be impacted by the changed legal landscape. This blog is being written to anticipate how those changes will impact the business of hiring. We will make the case that a truly results or performance-based hiring process will remain relatively unaffected, while hoping that some of the hiring strategies and tactics that have not served us well when it comes to enhancing both diversity and operational performance ,will get a second look. Even though executive orders have curtailed the use of certain DEI activities in the federal government and those who contract with the federal government, we don’t believe that the core tenets of DEI are being threatened – only the parts that were built in support of selective preference. We have a long history of advocating for improvements in hiring processes. Today we make the case that by continuing to increase the level of objectivity attached to the hiring process, hiring authorities can actually drive more not less diversity and protected class representation.
How SCOTUS Set the Stage for Merit Based Employment Practices
The landmark Supreme Court decision that started the shift towards merit based employment practices took place in 2023 and involved a ruling that addressed the use of Affirmative Action in an educational setting. The case, the Students for Fair Admissions v both Harvard and the University of North Carolina, concluded that race-sensitive college admissions policies were in violation of the Equal Protection Clause of the 14th amendment.
While overturning years of precedent, this decision prompted companies to anticipate that when it comes to hiring and promotion, the use of protected class preferences or quotas are likely in violation of the 14th amendment. The SCOTUS ruling definitely signaled a narrower definition of equal opportunity, specifically discussing the need for individualized assessments and evaluations, always the trademarks of merit based hiring.
The Supreme Court does not appear to be finished issuing rulings to strengthen what is viewed as a return to merit based thinking. Just recently it dealt with a case involving reverse discrimination basically making the case that protections against discrimination need to be applied to all employees equally, not just employees who are members of a protected class. Employers are now bracing for waves of new discrimination claims that can be made against companies who historically made decisions that favored protected classes.
Likely emboldened by the 2023 SCOTUS rulings, the Trump administration began its term by issuing a range of executive orders promoting merit based personnel practices, and limiting the role of DEI when it comes to awarding government contracts. In mid July, even before the Presidential race had been decided, many high profile companies announced changes in their commitments to DEI. Microsoft was one of our local “bigs” who came out early in announcing the end of their centralized DEI department – claiming they were now going to embed DEI concepts into the the HR teams of their operating units.
Some would say these decisions were done in the context of likely legal and reputational repercussions. Others have said that how DEI initiatives were executed have made them largely ineffective. The Society of Human Resource Managers took the side of business when it noted that the business community hae been promised that a more diverse organization would enhance company performance, admitting that the data has been hard pressed to play that out. We suspect but do not know that a lot of the DEI shortcomings stem from how they were implemented, not basic issues with DEI per se.
Today most larger companies continue to embrace the tenents of diversity and inclusion. A few have recommitted themselves to making their hiring practices more objective and fair, expressing some relief that they would no longer be compromised by arbitrary preferences for protected classes. We think this is a good thing.
Because the hiring practices of small to mid-sized employers are much less visible, very few will feel forced to make changes to their employment practices regardless of SCOTUS rulings or executive orders. Our small to mid sized clients have always been creative about finding ways to engage a broad range of candidates which is more about winning “the race for talent” than about attention to the racial or sexual components of their workforce.
HR Professionals Have Lead the Way!
We have been impressed that the Society for Human Resource Management (SHRM) took a very proactive (and controviersial) approach to both the SCOTUS rulings – acting prior to the executive orders to provide leadership and operational guidance on the DEI relevant issues in mid 2024 by formally announcing a decision to remove the Equity component of DEI, opting for the new acronym, I & D.
While controversial at the time for reasons outside the scope of this blog, since July 2024, they have…
- Updated their guidelines and re positioned their comments on hiring best practices – emphasizing inclusive job descriptions, structured interviews, and expanded outreach programs.
- Advocated for inclusive leadership – offering newly crafted leadership training programs focused on the how tos of creating cultures of belonging.
- Offered a variety of legal, ethical and operational advice – on dealing with issues of “equity” by acknowledging that preferential hiring is no longer possible, while staying focused on those parts of DEI that matter most to an organization’s operational performance. To describe SHRM’s shift away from the older DEI to the new I and C a recent quote from their President says it all – “If we wanted to make some people happy, we’d stop using DEI entirely. We believe we’ll get to the equity part of DEI by focusing on inclusion and diversity.”
The Case for Improving Diversity by Updating Your Hiring Strategies and Tactics!
We are hoping that the changes in “thinking” that started in 2024 will trickle over into a renewed focus on the objectivity needed for state of the art hiring practices. As example, Lou Adler, one of the most well-known names in hiring methodologies and the creator of the PERFORMANCE BASED HIRING MODEL, recently defended DEI – stating that DEI concepts have been blamed for the operational failures of DEI based initiatives, he believes its an issue in execution not substance. He also believes that real diversity is an outgrowth of well-designed hiring methodologies and talent acquisition strategies. He makes the case that diversity can be improved in all companies willing to re think who and how they hire – focusing on the objective hiring methodologies that work and getting rid of the non objdctive methodologies that don’t.
Adler specifically sites 2 specific issues with traditional hiring models that he believes has gotten in the way of DEI and diversity.
- Traditional hiring processes are too reliant on the job description to establish hiring criteria. The problem? Job descriptions are too focused on what he considers mostly irrelevant lists of skills, competencies, work experiences, and academic credentials that tend to limit (not expand) the pool of “qualified” candidates. His concern is that these long lists of “must haves” actually exclude candidates who can do the job at high levels but have backgrounds and experiences that aren’t necessarily on the list. “Job descriptions perpetuate a hiring process that is far too focused on finding out what a candidate has, rather than what they will do with what they have”!
- Traditional hiring strategies are often organized around reasons to exclude candidates rather than ways to discover real talent. He sees this fixation as being one of the factors that has forced hiring authorities to lower the bar on hiring requirements in in order to attract diverse candidates. Mr. Adler believes that to build a culture that is all about performance, a company needs hiring practices that reflect high levels of performance. He also objects to any hiring process that embeds any kind of rigid adherence to hiring checklists. As an alternative, he recommends raising the talent bar while expanding the range of evidence that can be considered as part of the vetting process. He believes that traditional hiring processes often eliminate strong candidates during the initial screening process due to the lists of irrelevant hiring prerequisites. He asks all the right questions. How important is a college degree to on-the-job performance? What kind of skills can be learned on the job rather rather than get put on the list of must haves? What are the transferable talents that lead to successful job performance but never make “the list”?
From our perch, the current landscape and its legal boundaries tend to underscore Adler’s point – when hiring is based on objective, measurable criteria, real diversity is likely to increase. When employers are encouraged to develop fair and transparent hiring processes that focus on a candidate’s talents that are directly linked to on-the-job performance, not only does a hiring process pass legal muster but is most likely to represent all the best practices the HR community knows is needed to build a high-performance team.
At PACE we use hiring and candidate vetting models that views hiring as an end-to-end set of processes that not attracts and selects candidates who not only can and will achieve the outcomes needed on day one but for multiple years post hire. We use and encourage our clients to use processes that engages candidates to reveal their talents and motivations to achieve the expected goals of the role they are vying for and to be retained for new challenges down the road. We use outreach strategies that attracts candidates whose talents and backgrounds, while possibly different than originally anticipated, show evidence that the candidate is ready to deliver what’s needed on the job.
We think these that are the factors will generate a hiring process that is inherently more inclusive and most likely to deliver a more diverse workforce.
Looking Ahead – Navigating Merit Based Hiring Models!
While recent court rulings have clearly altered the legal contours of equity, equality, discrimination and DEI, we hope that companies will take advantage of the changes going on around them to take a fresh look at their current hiring processes and strategies. We believe that hen organizations use hiring processes that evaluates every candidate based on their abilities and “fit” for the role, diversity is an organic by product and that external goals are not just illegal, but not needed. We think this is particularly important in a talent short candidate environment. To win the race for talent companies need to find new ways of interacting with a broader range of candidates.
Here’s what we see as the key and base components of a results focused hiring process….
- Pre-Recruit homework that reduces the importance of an outdated job description and focuses instead on identifying the key results expected of someone who will successfully fill a role.
- Preferred candidate profiles built around performance relevant criteria and only performance relevant criteria.
- Action oriented job postings (not public postings of job descriptions) that actually engage candidates in the hiring process.
- Strategically designed and data sensitive outreach and app or resume screening processes that minimize the impact of unconscious bias (ex. quantitative candidate rating programs, blind recruitment processes etc.)
- Multi step, structured, standardized and relevant candidate vetting processes – custom designed to fit the unique requirements of every hiring project. No cookie cutter approaches.
- Fully transparent hiring decisions based on objective evidence of the candidate’s likelihood of short- and long-term success.
And we couldn’t leave this discussion without putting in a pitch for the many benefits of the popular temp to hire auditioning model of hiring as a way to ensure objective and clear minded candidate vetting. By requiring hiring decisions to be based on real world, on the job, observations of a candidate’s performance, hiring decisions will have achieved the most ultimate form of objectivity. We say more about the benefits of a temp to hire hiring model in other blogs so won’t duplicate them here.
Final Thoughts
The recent rounds of judicial decisions, executive orders, and the new guidance provided by professional HR organizations has laid the groundwork for change. Reengineering the hiring process to make it even more objective and inclusive does not need to signal the abandonment of the base tenents of DEI but rather a way to continue supporting its most important commitments. By focusing on fair and objective hiring practices organizations lay the groundwork for an inclusive culture, where every voice matters, that has proven impact on an organization’s performance.
While diversity has run its course in terms of being a standalone goal, our hope is that forward-leaning hiring managers will recognize that by getting clear about the actual results each job needs to contribute, creating structured, evidence based vetting processes that accurately predict the candidate’s ability to achieve those results once hired, their teams will not only improve their operational performance but will become more, not less, diverse.
