The return of Donald Trump as US President has thrown in question many assumptions. This has reached right into the world of HR. Diversity, equity and inclusion (DEI) policies have been challenged by means of the new President’s executive orders. One order terminates DEI programmes in federal government. Another ends previous orders dating back to […]
The return of Donald Trump as US President has thrown in question many assumptions. This has reached right into the world of HR.
Diversity, equity and inclusion (DEI) policies have been challenged by means of the new President’s executive orders. One order terminates DEI programmes in federal government. Another ends previous orders dating back to the civil rights era, such as requiring federal contractors to comply with discrimination law and maintain affirmative action programmes.
Pro-DEI culture in government is firmly in the sights of the new President. Federal employees are now required to report colleagues they believe are furthering DEI “in disguise”.
Pressure is also being brought to bear on the private sector. A section of the order has the title “Encouraging the Private Sector to End Illegal DEI Discrimination and Preferences”.
While these orders are a radical change in US Government policy, they reflect a consistent thread in US politics prior to Trump’s second victory, with critics of DEI mounting lawsuits on numerous occasions, often claiming unlawful “reverse discrimination”.
While it seems likely that there will be legal challenges to Trump’s executive order, DEI is no longer a central tenet of employment policy and corporate governance in the US.
Big tech rolls back on diversity promotion
The quick reaction of companies like Google to the changed wind direction is striking. On the other hand, the closeness of some tech Tycoons like Elon Musk to the President make it less surprising.
Alphabet, Google’s parent company has removed a sentence previously included in its annual reports saying that it is, “committed to making diversity, equity, and inclusion part of everything we do and to growing a workforce that is representative of the users we serve”.
In the previous climate this was hardly a controversial aspiration.
A company email was also sent to staff stating that it would no longer have aspirational goals to improve representation. While still committing to “equal opportunities”, positive steps to promote DEI are clearly being downplayed.
The nuance in the wording of Trump’s order quoted above is that the intention is to end “unlawful” DEI discrimination and processes. However, companies like Google are being forced to end DEI programmes which might “encourage” illegal conduct. In other words, the programme might not be illegal itself but be deemed to encourage illegality.
Equality laws remain in place, but active promotion of diversity is being pushed right down the agenda.
Is Big Tech’s move to roll back on DEI a superficial or fundamental change?
In the US, then, the pressure of the orders has led to a shift in how companies treat these issues. Given the worldwide presence of large US-based corporates like Google, Amazon, Meta and McDonald’s, the change in culture is bound to have an impact. However, in other jurisdictions, it will depend on the local legal framework as well as the political culture.
From a business point of view, diversity aspirations will persist. A McKinsey Study in 2015 indicated that companies with greater ethnic and racial diversity were 35% more likely to have returns above the industry average. In the case of gender balance, the figure was 15%.
This would suggest that, provided they can stay on the right side of the law, many multinational companies will value DEI.
How DEI rollback will impact AI development
The change in culture in US big tech will also impact the use of AI in HR. One example is around automated assessment.
Google has re-written the principles that guide its development and use of AI and taken out a section pledging not to develop applications “that cause or are likely to cause harm”.
This contrasts with the trend in Europe to be more cautious about the risks associated with AI. This is reflected in the EU AI Act adopted by the Council of the EU in April 2024.
In the UK, the government recently issued guidance the use of AI in recruitment. This refers to concerns about, “…risks, including perpetuating existing biases, digital exclusion and discriminatory job advertising and targeting.”
Advice to employers in the UK and Europe will be to balance enthusiasm for efficiency gains with risk assessment of unintended discriminatory consequences.
Will the UK follow the US Trend on DEI?
Tech giants with huge influence worldwide will inevitably impact the employment culture in the UK. But the political winds are blowing in the opposite direction on this side of the pond.
The UK Government is committed to strengthening workers’ rights and sees no contradiction with its growth agenda. Last week, the Deputy Prime Minister was reported as stating that Labour’s workers’ rights package is ringfenced.
The employer’s positive duty to prevent sexual harassment will be beefed up. Employers must “take reasonable” steps to prevent harassment. Next year with the wording changing to “take all reasonable steps”. Firms will need to take measures to assess and mitigate risk, bring in training, and review policies to establish a zero-tolerance culture.
Plans are also afoot to make employers responsible for preventing third-party harassment. This is not just sexual harassment but also that related to other protected characteristics like race.
In the area of equal pay, the government will consult on proposals to extend the right to disability and ethnicity.
Gender pay gap reporting in companies of 250 or more will be extended to disability and ethnicity. This will mean that the disability and ethnicity pay gap will need to be reported annually in addition to that for gender.
Further, day one rights for paternity and parental leave are also expected as well as even stronger protection against dismissal during pregnancy and for the six months following birth.
If there is a culture war impacting HR practice in the US, the UK Government’s plans run counter to this and US-based multi-nationals will need to adjust their approach.
