Is Your Company Fulfilling Its Pledges or Is It Guilty of DEI Washing?

George Floyd’s tragic murder in the spring of 2020 catalyzed a social justice movement that touched every corner of society, from our legislatures to our classrooms to the places we work. 

In the weeks and months following his death, business leaders rushed to issue public statements decrying racism and companies swiftly adopted new procedures to combat inequality. Almost overnight, the language of DEI (diversity, equity, and inclusion) went mainstream. 

That was three years ago.

Today, things look a little different. With the economy stuck in low gear, companies are cutting diversity roles, while some of the same multi-billion-dollar corporations that breathlessly touted their DEI efforts now face lawsuits for allegedly fraudulent policies. Away from the headlines, a quieter but no less dubious phenomenon persists: DEI washing. 

The term, also referred to as “woke washing,” describes what happens when organizations exaggerate their commitment to diversity, equity, and inclusion for purely cosmetic reasons. Like greenwashing before it, DEI washing is a form of virtue signaling that prioritizes messaging over meaningful policies and practices that affect change. 

“By my definition, it’s when businesses hire members of minority groups in roles that have no real function beyond building fake trust in communities to make more money,” writes Vern Howard, CEO of the digital events platform Hallo, in Forbes, “It’s the veneer without the improvement.”

Vern says that it’s easy to run feel-good initiatives or beef up BIPOC imagery in marketing materials, but it’s a lot more challenging for leaders to “embrace transparency, recognize faults within themselves and the larger organization, and deliberately lead the charge in correcting the imbalances of opportunity and fair treatment.” 

And no matter how you hang it, Vern says, DEI washing comes at a price. 

Companies have been called to the carpet by their own employees when their public statements of solidarity don’t jibe with their internal policies. This can result in a loss of talent, an erosion of trust by both employees and consumers, and ultimately affect the bottom line. 

“Organizations must be cognizant of the fact that the current outcry for justice is not ephemeral or confined to social media,” diversity leaders Erin Dowell and Marlette Jackson argue in the Harvard Business Review. “It is the culmination of decades of advocacy and centuries of discrimination.” 

And DEI washing does more than simply impact companies and their employer brand. It can leave employees from historically marginalized groups struggling with the injustice of tokenism and the glass cliff.

With that in mind, here are four factors to examine to make sure your company is truly committed to walking the walk on DEI.

1. Organizations should make continual investment

One of the most troubling recent business trends has been the dismantling of diversity teams. Blaming a downturn in the economy, some companies have quietly backtracked on their DEI efforts, while others have made deep systemic cuts to their programs. 

According to Revelio Labs, attrition rates for DEI roles have outpaced those of non-DEI roles at more than 600 companies in the United States that have laid off workers since late 2020. That number has only accelerated in the past six months.

Global DEI expert Wema Hoover says that’s because many of the companies trimming roles never took diversity seriously to begin with. Their approach, she says, was little more than a compliance exercise. “They want to have it in their annual reports that training was administered,” Wema told Fast Company. “But they don’t outline the outcomes they’re expecting to achieve, and how it’s connected to the organization’s values.” 

2. Organizations should set measurable goals

“What gets measured gets done,” the old saying goes. That’s especially true for DEI. Companies need to assess the specific problems within their organization, create a customized plan for addressing them, then measure the progress of that plan.

“A policy can’t be written as a check-the-box exercise whose only purpose is to market the company as inclusive,” says Elena Philipova, director of sustainable finance at Refinitiv, a data and research arm of the London Stock Exchange Group. “It needs to be built into the DNA of the organization.” 

DEI experts say that real, appreciable change comes when organizations tie goals to performance. If your company establishes KPIs for employees around diversity, it’s a pretty good indication that it views DEI as a must-have rather than a nice-to-have.

It’s also important to set both long-term and short-term goals, says Wema Hoover. When companies set ambitious goals that take years to achieve, it should be balanced with more incremental goals that benchmark progress along the way. “Those systemic changes live on beyond the target moments in time,” she says.

3. Organizations should hold stakeholders accountable

Without accountability, goals are useless. For an effective diversity strategy, it’s important to frame DEI goals the way you do all other goals in the business, with key stakeholders holding the reins. 

As DEI researcher Evelyn Carter argues in the Harvard Business Review, diversity efforts “are only as good as the people responsible for carrying them out.” If stakeholders aren’t on board with new processes and policies, they’re going to have a hard time bringing those plans to life — and a much easier time exaggerating or misrepresenting them.

Of course, accountability relies on transparency. Your company should be practicing an open-book policy with regard to DEI practice, says Paul Rubenstein, chief people officer at Visier. He says organizations have a tendency to lock up sensitive data, like workforce representation gaps, making transparency all but impossible. 

He thinks HR should borrow a page from finance departments, in which numbers are released monthly or quarterly so that employees can “reflect and correct.” 

“Treating human resources data the same way would make it easier to spot inequities in the promotion cycle, biases in recruiting and to set targets that improve organizational DEI,” he says. Only then, Paul believes, “can organizations determine whether they need to address structural or behavioral issues — or both.”  

4. Organizations should talk (and listen) to employees

Too much talk can be a sign that your company’s DEI efforts are stuck in the spin cycle. But that’s not to say all talk is bad. Organizations that continually communicate and engage with their employees about diversity are usually more serious about achieving it.

Having an inclusive organization that truly nurtures diversity is everyone’s responsibility. Look at your team and your company and assess whether they are living up to their public commitments.

Listen to and learn from your workers constantly, especially those who are in marginalized groups, says diversity advocate and entrepreneur Sepideh Nasiri. “The best people to tell you how your policies and strategies are failing,” she says, “are the people who you’re failing — your employees.”

She says companies should always be conducting surveys and getting feedback from workers. “You'll be surprised,” Sepideh says, “by the different inclusive approaches you discover when you give a voice to everyone.” 

Vern Howard also believes in the power of learning as you go. “Diversity is not a problem with a silver-bullet solution,” he says. “It is one that will only disappear with conscious, ongoing efforts combined with a healthy dose of continual learning. Real diversity means real change.”