February 17, 2023

Don't Ban DEI in Hiring: Why It Matters for Business & Society

As we celebrate Black History Month, we are reminded of the importance of diversity, equity, and inclusion (DEI) in our workplaces. We are also reminded of the work that still needs to be done to create a more equitable and just society.

According to a recent news article, Texas Governor Greg Abbott has been pushing, like his counterpart Ron DeSantis, Governor of Florida, for a bill that would make it illegal for state-funded universities to use diversity, equity, and inclusion (DEI) criteria in the hiring process. The proposed legislation, House Bill 4093, has received criticism from many, including civil rights advocates and business leaders, who argue that it would be a step backward in creating a more inclusive and diverse workplace.

Texas Governor Greg Abbott is pushing for a bill prohibiting state-funded universities from utilizing diversity, equity, and inclusion (DEI) criteria in their hiring process. However, the use of DEI criteria in the hiring process is supported by extensive evidence. It has been demonstrated that diverse workforces not only benefit society but are also advantageous for businesses. Companies with diverse teams tend to perform better than their less diverse counterparts, as reported in a study conducted by McKinsey & Company. The research found that companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians.

Moreover, diversity in the workforce leads to a more creative and innovative environment. A study by the Harvard Business Review found that teams with a diverse range of perspectives and experiences were more likely to generate innovative ideas and solutions.

Governor Abbott's argument against using DEI criteria in hiring is that it may be "discriminatory" and lead to "reverse discrimination" against specific groups. However, DEI does not involve hiring unqualified candidates based on their gender or race but rather considers multiple factors that can contribute to creating a diverse and inclusive workplace.

What Governor Abbott’s position fails to understand is the value that individuals with diverse perspectives, or even work styles can add to a workplace, whether those perspectives are racial, gender, LGBTQ, or neurodiverse. When a company is comprised of more unique perspectives, it is able to create work that is more profitable and products that better represent the communities that they serve. Ultimately, this leads to a real financial upside for a business. DEI is not entirely an attempt to correct inequalities so much as it is an attempt to value diversity in all forms and incorporate the contributions that individuals with unique backgrounds can offer a company.  

DEI criteria can result in better hiring decisions. When companies prioritize diversity and inclusion in their hiring processes, they can attract a broader pool of candidates, including those from underrepresented groups. This can lead to a wider range of skills and experiences and, ultimately, better outcomes for the organization.

In addition to the business case for DEI, there is also a moral obligation to consider. Discrimination has long been a problem in the United States, a country with a deep and long history of slavery and other systemic discriminatory practices and DEI criteria in hiring is one way to help level the playing field for historically marginalized groups equal to those of over represented groups. In a country that values equality and opportunity, it is essential to work towards creating a more inclusive society.

Governor Abbott's proposal to ban DEI criteria in hiring is counterproductive and misguided. DEI is not only beneficial for society, but it is also beneficial for business. Companies prioritizing diversity and inclusion are more likely to be successful, innovative, and better positioned for the future. By working together to create more diverse and inclusive workplaces, we can create a better future for everyone.

Want to dig deeper? I recommend the following research articles, which cover various topics related to diversity, equity, and inclusion in the workplace, including the relationship between diversity and innovation, the impact of racial diversity on work group performance, and the state of research on diversity and inclusion interventions.

  1. "Racial diversity and work group performance: A review and research agenda." Journal of Organizational Behavior. Volume 42, Issue 6, August 2021. https://onlinelibrary.wiley.com/doi/10.1002/job.2523

  2. "Diversity, Equity and Inclusion Lighthouses 2023" McKinsey & Company, 2023 DEI Initiatives Report. January 13, 2023. https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-equity-and-inclusion-lighthouses-2023

  3. "Resources on Diversity, Equity, and Inclusion" National Academies of Science, Engineering, & Medicine https://www.nationalacademies.org/topics/resources-on-diversity-equity-and-inclusion 


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