Sector News

Companies slashing DEI policies face long-term impacts

September 7, 2024
Diversity & Inclusion

In a company statement released in late June, Tractor Supply — a staple across rural America known for supplying agricultural equipment — told customers that they were recommitting to their mission of “being good neighbors in our hometowns” and “representing the values of our communities and customers.”

To that end, the company provided a long list of activities they would no longer take part in, ranging from withdrawing from carbon emissions goals to declining to sponsor Pride events. The statement also noted, “[We will] eliminate DEI roles and retire our current DEI goals.”

The eclectic nature of the list, a loose round-up of generally non-political activities that are nonetheless associated with progressive politics, made it clear that the company was directly responding to a specific input: criticism from a group of vocal agitators online, led by the conservative influencer Robby Starbuck. The statement came less than three weeks after Starbuck began waging a campaign against Tractor Supply on X, choosing the retailer to “prove a model” of online targeting, according to reporting by the Wall Street Journal.

Backlash has been immediate and outspoken. Joe Montello, formerly the General Manager of the Tractor Supply store in Saranac Lake, N.Y. — a rural area in the Adirondacks — described coming into work after the statement was released and receiving a call from a customer, a woman who identified herself as a lesbian and told Montello she would no longer be shopping at the store. He gave his notice two days later.

For Montello, a gay man in his fifties, the content of the letter immediately transported him back in time. When interviewed for this piece, he said, “It made me think of when I was in high school, when AIDS was running rampant. I wasn’t out, but I was listening to all the hate. I think of all the progress that has been made since then and feel like we’re sliding backwards in time.”

He added, “I’m not an activist, but this time, I had to take a stand for what I thought was right.” Another employee of the store quit in solidarity, while other employees weighed the possibility of doing the same.

Meanwhile, the National Black Farmers Association has called on Tractor Supply CEO Hal Lawton to resign, with NBFA president John Boyd calling the statement “appalling,” adding, “it directly impacts our 130,000 members, many of whom are loyal Tractor Supply customers.” The Human Rights Campaign and GLAAD have also condemned the decision.

A Widespread Withdrawal from DEI
Tractor Supply made a blunt appeal to the perceived values of its customer base, but it’s far from alone in its retreat from DEI, also known as Diversity, Equity, and Inclusion. John Deere, a maker of agricultural equipment, ended its support of “social and cultural awareness events” this week. Meta and Google have quietly dialed back DEI efforts, and Microsoft made headlines when the company eliminated a set of DEI roles within its events team. In a statement to Business Insider, a spokesperson said, “Our D&I commitments remain unchanged.”

But even the use of the term D&I signals a shift in intent. The Society for Human Resource Management, arguably an institutional center of DEI knowledge, raised eyebrows recently with the announcement that they would rebrand their DEI approach as I&D, eliminating “equity” from the name.

Many HR and DEI leaders have spoken out, emphasizing that “equity” is what is actionable about DEI — dismantling the structural inequities that reduce opportunities in the workplace.

Erin Grau, the co-founder and COO of the workplace media and insights organization Charter, notes, “Equity is the foundation for meaningful diversity and inclusion as it acknowledges systemic barriers that exist, and it ensures fair access to opportunities, without which diversity efforts remain superficial and inclusion becomes impossible.”

Writing on LinkedIn, the DEI strategist and author Lily Zheng emphasizes that it should not be controversial to make equity an organizational priority. They write, “People should be conceptualizing equity work alongside organizational design, participatory decision-making, and change management.”

Hebba Yousseff, the millennial Chief People Officer of Workweek, was blunt, describing the incident and its aftermath as “the SHRM dumpster fire” in a recent issue of her irreverent HR newsletter, “I Hate it Here.”

Backlash Today, Long-Term Impact Tomorrow
DEI would not now be a hotly contested part of the national discourse if it had not seen an exponential surge in interest during the Black Lives Matter movement of 2020, following the deaths of George Floyd and other Black people in police custody. Inequity taken to its most extreme conclusion prompted many organizations to get serious about their own internal inequities — DEI roles increased 55%. But many others organizations just put up a good front.

Now they’re retreating, with DEI roles disproportionately impacted by recent layoffs. Even as DEI investment has dwindled, debate about it online keeps growing, so incendiary in certain circles that it has been blamed in everything from railway accidents to the Baltimore bridge collapse to the assassination attempt on former President Trump. Congressman Tim Burchett, Republican of Tennessee, lambasted Kimberly Cheatle, the Director of the Secret Service and a woman, as a “DEI hire” in the immediate aftermath of the July 13 attack. Even Vice President Kamala Harris, the presumptive Democratic nominee for the 2024 presidential election and one of the top political leaders in the country, has been dismissed as a “DEI candidate.”

HR professionals find the idea of a “DEI hire,” in any context, to be a clear misrepresentation of their work. “Every HR professional is trained to hire the best candidate for the job,” notes Brian Elliott, a leadership advisor and co-founder of Future Forum. “You work to build a diverse slate of candidates and an unbiased process aimed at hiring the best person. But you don’t work off a quota or hire based on one aspect of identity.”

A lack of focus on DEI also — perhaps self-evidently — has a clear impact on organizational equity, as fewer companies prioritize work that dismantles structural biases. However, Elliott points out that many companies that distance themselves from DEI now may never have been truly invested in their goals. “This provides air cover to people who want to walk away from the conversation. David Larker at Stanford has this term ‘diversity washing,’ where he looked at public statements versus actual diversity in leadership ranks. You can tell the difference between who is actually walking the walk versus who is talking the talk.” One silver lining in this situation might be that fewer companies perform the work of DEI without actually advancing equity outcomes.

In the short term, those same companies and organizations might win back certain segments of their customer base or save quick money by divesting resources from DEI initiatives. In the long run, they risk massive organizational and ethical costs.

Not only are they creating a host of future retention and talent development challenges for themselves — Gen Z and Millennial workers are both enthusiastic about the goals of DEI and disinclined to work for employers that don’t share their values — they’ll also miss out on the gains of supporting an equitable workforce. McKinsey has found that companies with greater gender and ethnic diversity on their leadership teams are far more likely to financially outperform less-diverse companies. The economic impact of closing the workforce gender gap is estimated at $12 trillion.

DEI, some have claimed, is over. But for most HR professionals, who will always guide hiring and development in organizations, the principles of DEI aren’t going anywhere. Instead, what may happen is a kind of natural attrition, as companies that kill off their DEI initiatives for short-term publicity gain take their own interests down in the process.

Just look at Tractor Supply. While real sales impacts may not be known for some time to come, social media tells part of the story. Before the recent company statement, almost every post on the company’s official Facebook page had upwards of 800 reactions. After, most received barely 200, many of them the “angry” reaction.

Meanwhile, a search for the phrase “no longer shopping at Tractor Supply ” yielded page after page of results, most from loyal shoppers put off by the company’s stance and offering alternatives. One simply advised, “Chicken-raising friends, keep in mind your local Agway.”

by Lisa Conn

Source: forbes.com

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