Political Headwinds Not Enough to Trump Company DEI Goals

Diversity, equity and inclusion (DEI) efforts have run into some political headwinds over the past few years, yet companies continue to focus programs to increase representation of underrepresented races and ethnicities within the supply chain.

A new survey from Gartner found that 49% of supply chain organizations had formal DEI goals in 2023, a more than 50% increase over the companies that did so in the 2022 survey. Additionally, the survey found that candidate attraction and retention were the top reasons for setting DEI goals and objectives.

That aligns with current workplace trends. A LinkedIn employment survey released in April 2023 found that 82% of employees said it was important to them to work for a company in which the culture and values align with their own. A 2023 survey of 5,902 U.S. workers by Pew Research Center found that 56% believe DEI in the workplace is a good thing, and 61% said their companies have policies that ensure fairness in hiring, pay or promotions. The Pew survey was not focused on the supply chain, but the results do confirm what Gartner’s employer-based survey found.

“Typically, the younger you go, the more that percentage would grow and that is the same demographic that supply chain leaders are struggling to attract and retain,” Dana Stiffler, vice president and distinguished analyst in the Gartner Supply Chain Research & Advisory group, tells Supply Chain Management Review.

Employees want to be viewed as humans

Stiffler says research in Gartner’s HR group has found that approximately 80% of employees want their employers to view them as human beings, and “the employers that [meet] those things will be [employers of choice].

So, it is probably not a surprise, then, that the DEI survey found companies still investing in practice.

The Gartner survey, which focused on companies with more than $250 million in revenue in the U.S., Canada, and Europe, found that companies were less likely to focus on DEI because of supply chain pressures, scrutiny of talent investments during a time of uncertainty, and the U.S. Supreme Court’s decision on affirmative action for university admissions. That last point has led many companies to reconsider their public stance on DEI programs. Still, the 2023 survey found more companies emphasizing DEI.

“For example, Gartner found a significant increase in focus on age, nationality, physical ability and cognitive ability, all rising to exceed the 50% mark. The focus on the LGBTQ+ dimension grew to 46%,” the report noted.

DEI can be divisive, but DEI values are important

Many executives (63%) are concerned that DEI is divisive, but almost 80% agreed with the following statement: “DEI values are an important part of my organization’s mission.” While executives are concerned, employees are not, with just 21% finding their organization’s DEI initiatives divisive.

Stiffler says that an employee’s values is playing a role, but she is also seeing companies adopt DEI programs out of FOMO as the competitive nature of securing talent today weighs on operations.

“We thought we would see a decrease in focus, a decrease in investment—that was our hypothesis going in,” Stiffler says. “We would see a downshift [in DEI efforts] and we were fascinated that is not what we saw. We were surprised to see that there was an increased focus.”

Less attention is being paid to gender, down 6 points to 70%, ethnicity/race, down 5 points to 71%, and veterans, down 7 points to 25%. For example, the life science and healthcare segment reduced its focus significantly on ethnicity/race (from 86% to 63%), gender (from 80% to 53%) and LGBTQ+ (45% to 28%). But age, nationality, physical ability and cognitive ability also saw an increase in focus.

DEI improves talent acquisition

The focus on DEI, from an executive point of view, is focused on talent attraction and retention. Sixty-eight percent said their primary goal is to attract new employees, while 64% said efforts are to engage and retain existing employees. More than half, 58%, cited improved business performance and 48% said the efforts help attract customers.

When it comes to mirroring the general population, supply chain organizations in the U.S. are now line with the general population of underrepresented races/ethnicities, at about 48% (42% of the U.S. population is Black, Indigenous or people of color).

“The first reason for greater representation in the 2023 survey is the much higher degree of accountability,” the report noted. “Fully 92% of respondents have DEI goals, compared to 62% of respondents in 2022 . For 2023, formal accountability eclipsed general goals for the first time: 49% of respondents have formal goals and specific targets on management scorecards, compared to 27% in 2022 and 23% in 2021.”

One reason for this growth is more supply chain organizations are focused on doing the work, something Gartner called the “say-do gap.” In 2022, 75% of organizations reported some focus on diversity, but only 40% reported working on a specific DEI project or initiative. In 2023, that number climbed to 73%. Stiffler says she was surprised by the “diminishment of the say-do gap.”

“It was a really striking closure over the past three years of that say-do gap. In 2020 and 2021 and in the wake of the George Floyd instances that happened, you saw a huge jump [in interest] and executives doing their quarterly earnings calls were mentioning DEI,” she says. “Over the last few years, interest waned combined with the backlash in other professions, so that say-do gap [closing so much is a surprise].”

Employee engagement drives DEI goals

To achieve DEI goals, organizations cited employee engagement (15%) as the most effective approach, followed by learning and development (13%). Recruitment, work design, and advancement/progression were all cited by 10%.

Gartner noted that while increased corporate investment in DEI correlated with better representation at the C level and VP level, only “board and company-level commitments can make material differences at these highest levels.”

Gartner advised CSCOs to:

• Audit talent strategies including DEI to remain competitive in acquiring needed talent.

• Continue following the CSCO prescription for better DEI outcomes: take ownership, set goals, run initiatives and hold supply chain leadership accountable.

• Ensure that learning and development is fit for purpose, inclusive itself, and that it’s either integrated into existing workflows or that people have time for it.

• Reduce higher-than-average attrition of underrepresented supply chain talent by addressing the root causes of five top reasons for departure: career change, greater compensation, career opportunities, lack of inclusion and feelings of belonging, and lack of transparency in promotions.

Stiffler says her advice would be to make DEI a top-down decision. It can’t be a “grassroots effort in the business environment.” In DEI-successful companies, “that top-down structure is very strong,” Stiffler notes.

As the survey noted, employee attraction and retention are key motivating factors, but that is leading to a trickle-down effect where DEI becomes ingrained in the culture. Stiffler notes that some companies are eliminating the position of chief diversity officer because those efforts are now part of the overall hiring and employee retention process.

“What you see now is that these practices are being pulled in by business leaders, you see it in supply chain … into how we work everyday. That’s how progress actually happens,” she says.

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