We’ve been covering the administration’s assault on DEI in the private sector. So far, the administration’s efforts are mostly limited to federal contractors (FCs). An executive order issued in March banned DEI practices among FCs. Additionally, IBM faced a $17 million settlement with the DOJ over a DEI-based False Claims Act enforcement. A recent survey from Catalyst looks at how these policies are impacting DEI at U.S. companies. The authors found a major divide in impacts on FCs vs Non-Federal Contractors (NFCs):
“The unique threat level felt by FCs was striking in our results. While a large majority of organizations (77%) overall have changed their level of investment in inclusion efforts, FCs and NFCs are taking divergent paths, reflecting the distinct ecosystems in which they operate:
- Among FCs, 51% reported decreasing inclusion efforts while only 32% reported increasing inclusion efforts.
- By contrast, among NFCs, 52% reported increasing inclusion efforts while only 20% reported decreasing inclusion efforts. This finding suggests that most NFCs feel less directly threatened by the current legal and regulatory environment than FCs.”
While FCs appear to be on the back foot, the survey reveals some encouraging trends among NFCs. NFCs that reported increasing DEI efforts in the last three years reported significantly higher benefits from their programs. Respondents overwhelmingly indicated that their DEI programs improved financial results, innovation, and organizational efficiency. However, with the EEOC’s new enforcement priorities, the administration is looking to expand its war on DEI beyond FCs. The question is whether the legal strategies will be as effective in chilling NFC DEI programs.
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