Is DEI Dead? An HR Pro Weighs In

Over the past few years, Diversity, Equity, and Inclusion (DEI) has seen both a dramatic rise and a noticeable backlash. In the wake of 2020, racial justice movements ignited a call to action from businesses, institutions, and policymakers to make bold commitments to fostering inclusive workplaces and communities. Yet in 2025, we find ourselves in a dramatically different climate—where being called “woke” is an insult and DEI initiatives are being criticized, scaled back, or even dismantled. Is DEI on its deathbed?

The Pendulum Swing

The rapid embrace of DEI in the early 2020s stemmed from heightened awareness of social justice issues. Black squares filled social media feeds, and an onset of awareness, shock, and guilt fuelled a widespread call to action. Allyship surged, but so did judgment and heightened expectations for cultural awareness. “Educate yourself” became a common response, and public figures faced backlash for past actions—giving rise to cancel culture.

While many quickly embraced DEI, others felt they were walking on eggshells, raising concerns about merit, forced compliance, and even reverse discrimination. Over the past 18 months, political and social shifts have led to a contraction of DEI efforts in organizations, with some labelling them as performative or even divisive. Companies that hired Chief Diversity Officers in 2021 and built DEI teams quietly eliminated these positions just a year or two later. This backlash has been fuelled by economic downturns, political polarization, and rising anti-woke sentiment.

In Canada, corporate DEI programs have experienced both expansion and retrenchment. While over 70% of Canadian businesses implemented formal DEI strategies post-2020, a 2024 survey by the Canadian Centre for Diversity and Inclusion found that 40% of these initiatives have been downsized or deprioritized due to budget constraints and shifting executive priorities. The U.S. has seen similar patterns, with high-profile companies like Meta and Disney scaling back DEI teams in response to shareholder pressures and economic shifts.

So, was it all just hype—a passing trend?

A poll of my LinkedIn network revealed that 60% of respondents believe DEI is still alive and well in their workplaces. But why? Why do some organizations continue to invest in DEI?

A study by McKinsey found that organizations with comprehensive DEI programs reported a 32% increase in revenue growth compared to their counterparts without such initiatives. A 2025 survey by Glassdoor found that companies with high DEI ratings attracted 30% more top-tier candidates and filled positions 42% faster than those with weaker DEI reputations. Deloitte also reported that firms with strong DEI strategies had an 18% higher retention rate and a 25% higher employee engagement rate than those with weaker efforts.

Now for the plot twist: what if I told you organizations were never investing in DEI programs? They were investing in engagement and workplace performance programs. At Awaken HR, we have worked with organizations across various sectors over the past five years. While demand for DEI-specific training and strategies has declined, the root of our work remains the same: helping employers cultivate high-performing teams. We do that by fostering value-based cultures and diverse environments where everyone feels represented, included, and valued.

People power organizations. Their performance—or lack thereof—impacts revenue and overall success. Research shows that when employees feel valued, included, and a sense of belonging, organizations see increases in commitment, productivity, innovation, and collaboration.

The Next Chapter of DEI

History shows that social progress is not linear. Movements advance, face resistance, recalibrate, and ultimately find new ways to thrive. The current moment may feel like regression, but it presents an opportunity to rebrand DEI in a way that is meaningful and conducive to workplace performance.

With a workforce more diverse than ever, we cannot revert to past approaches. The key to the future of workplace performance is people-centric practices that meet evolving workforce expectations. DEI should not be an isolated initiative—it must be integrated into broader talent engagement strategies.

Rebrand DEI as Emotional Intelligence in Action
Inclusion has become a buzzword, often misunderstood or politicized. However, at its core, DEI is about understanding ourselves, empathizing with others, and optimizing our conduct to strengthen relationships. Emotional intelligence (EQ) encompasses empathy, self-awareness, self-regulation, and social competence—skills that research consistently links to effective leadership and high-performing teams. By framing DEI as an extension of EQ, organizations can depoliticize and destigmatize the conversation, focusing on underlying values that drive success.

Shift from Mandates to Meaning
DEI cannot be a checklist or compliance measure; it must be tied to organizational values and business outcomes. Companies with diverse teams consistently outperform those without. A McKinsey study found that companies in the top quartile for gender diversity on executive teams were 25% more likely to experience above-average profitability. However, hiring someone based solely on a quota undermines both the individual and the organization.  Instead, companies should look beyond traditional qualifications and focus on competencies: the knowledge, behaviours and attitudes that enable someone to perform a job well. A business degree doesn’t necessarily prove someone will possess a strategic thinking mindset. It simply proves they were able to successfully answer test questions and complete assignments. Hiring based on competencies instead of qualifications allows us to expand our scope of thinking to include non-traditional ways of developing skill and considering those as predictive characteristics that enable success.  

The value of diversity doesn’t lie solely in our differences. It lies in how our differences enrich the perspectives of the workforce. Perspectives shaped by gender identity, cultural background, and age contribute fresh ideas and optimize collaboration. It is a disservice to hire for diversity without enabling full participation. Employers must ensure that all employees feel safe to express their perspectives and have them meaningfully considered.

A Shift to Emotionally Intelligent Leadership
Rebranding DEI as a leadership competency rather than a compliance function is key to making it a sustainable practice. Emotionally intelligent leaders create inclusive cultures naturally by fostering psychological safety, open communication, and trust. Instead of one-off DEI compliance workshops, organizations should focus on long-term skill-building and promoting people-centric leadership practices.

Companies can incorporate emotional intelligence assessments, 360-degree feedback, and coaching into existing leadership programs. Middle managers and front-line supervisors should not be overlooked, as they shape the daily employee experience. Many failed DEI efforts focus solely on executive buy-in, but middle managers need practical frameworks, training, and coaching to lead diverse teams effectively.

Prioritize Psychological Safety
In 2024, Google’s People Analytics team launched Project Aristotle, which found that psychological safety—the ability to take risks and express ideas without fear of punishment—is the strongest predictor of high-performing teams. Companies should track and improve this metric to ensure employees feel valued and heard.

Align DEI with Business Outcomes
Rather than treating DEI as a standalone initiative, tie it to meaningful business drivers. Measure how people-centric practices translate into key success indicators such as financial performance, customer satisfaction, and innovation. Organizations can track employee engagement surveys and evaluate managers on their ability to foster inclusive teams.

A Call to Action

So, is DEI dead? Hardly. It is at a crossroads. By integrating emotional intelligence principles, DEI will evolve into a framework that strengthens leadership, fosters better workplace relationships, and drives sustainable business success.

The pendulum may have swung, but progress is never static. It’s up to all of us to ensure that the next phase of DEI is smarter, stronger, and built to last.

Serena Morphy, CPHR, is the Principal and Founder of Awaken HR. Awaken HR works with employers to foster highly engaged teams, value-based cultures, and diverse environments where everyone feels represented, included, and valued. Serena helps organizations build communication, training, and leadership strategies that support people and performance.

Citations:

• McKinsey & Company (2024) – The Business Case for DEI in 2024
• Google People Analytics – Project Aristotle (2024)