Trump's DEI policy crackdown meets corporate resistance
President Donald Trump has delivered a blistering attack against DEI policies. But data shows diversity helps businesses succeed, not flounder.
Despite President Donald Trump's ongoing effort to eliminate diversity, equity and inclusion policy in government, the need for a diverse workforce isn't going away in corporate America. Not only is the U.S. population becoming more diverse with each generation, but many employers see a diverse workforce as essential to business success.
"This is not a political issue; this is a business issue," said Andrew Behar, CEO of As You Sow, a 30-year-old non-profit shareholder advocacy group that works on social and environmental issues.
As You Sow conducted a five-year study of 16,000-plus companies using U.S. Equal Employment Opportunity Commission data and found that higher diversity in management correlates with stronger financial performance. In contrast, companies with larger diversity gaps in leadership tend to underperform.
Diversity remains a priority
Some companies are scaling back public diversity, equity and inclusion (DEI) policy efforts while prioritizing workforce diversity. Deere & Company is one example of this shift. Last July, Deere said it would no longer participate in "external social or cultural awareness parades, festivals or events." It also said it would audit company training materials "to ensure the absence of socially motivated messages."
Deere shareholders overwhelmingly rejected a proposal from a conservative group, included in Deere's 2025 proxy statement, that called for a report on racial and gender hiring data due to concerns about discrimination against white applicants.
Deere reaffirmed its commitment to diversity in that report: "We believe that a diverse workforce that reflects the communities we serve is essential to our long-term success."
Behar said that Deere sees diversity and inclusion as linked to profitable growth.
"Companies are going to continue to optimize their operations, and they may be calling it human capital management optimization, which, frankly, is a better term for it," Behar said.
Trump continues DEI policy attack
In his Tuesday speech to Congress, Trump reaffirmed the elimination of DEI policy in government. "Our country will be woke no longer," he said.
Vic Baker, founder and CEO of EquitiFy, a professional development solutions provider, provided a different perspective. "Every civil rights gain meets resistance," he said.
He argued that progress is not a pendulum; "it's really a ratchet, and we're just tightening."
Baker said diverse teams outperform homogenous ones. He also said younger workers expect diversity in the workplace.
"Millennials, Gen Zers are the most diverse, socially conscious and equity-driven workforce in history," Baker said. "Companies that fail and are failing to integrate DEI initiatives into leadership pipelines, their supplier diversity pipelines, their employee experience -- they will lose talent, they will lose customers and they will lose credibility overall."
Indeed, the younger population is more diverse than any other generation. According to a Brookings Institution study, the youth population in the U.S. is already "minority white," meaning that non-Hispanic white youth now represent less than 50% of the under-18 population. By 2030, minorities will make up 53% of the youth population, and by 2050, 60%, it reported.
DEI policy is not about quotas
Baker rejects the idea that DEI is about filling quotas. The goal is to ensure a fair and equitable hiring process that removes biases. "We should be concerned about exclusion, stagnation and loss of competitive edge," he said.
One of the stronger responses to Trump's attacks on DEI came last week from U.S. Rep. Summer Lee (D-Penn.), who delivered sharp criticism during a House Committee on Education and the Workforce hearing this week.
"Black Americans make up approximately 20% of the federal workforce because so many of us grew up knowing the value of securing what we call good government jobs," Lee said. These jobs "have long been a pathway to overcoming discrimination in the private sector and to begin building economic security," she said.
"The Trump administration is actively reversing the progress, not just for Black workers, but for all workers across the country who have made it in the fight for economic equality," she said.
Patrick Thibodeau is an editor at large for Informa TechTarget who covers HCM and ERP technologies. He's worked for more than two decades as an enterprise IT reporter.
