Published on: June 10, 2025 at 5:23 pm
By Nick Keppler
The 2020 police murder of George Floyd was a tipping point leading to a far-ranging acknowledgement of institutional inequities in the U.S. Many large, public-facing companies—including Walmart, Meta, and Amazon—responded by instituting diversity, equity, and inclusion (DEI) programs with the stated goal of identifying and eliminating their own internal barriers for historically marginalized groups. By 2022, DEI consultation was a $9.4 billion industry, and the number of jobs implementing and running DEI programs quadrupled from 2010 to 2022.
Almost as quickly as they embraced DEI, many of the same companies curtailed or downplayed those programs following the reelection of U.S. President Donald Trump, who has called DEI initiatives “illegal.”
For some, DEI is a process for powerful institutions to redress their own place in an unequal society. For others, it’s a form of discrimination and an opening for misplaced shame.
Public debate over DEI often misses an important point, according to Academy of Management Scholar Herman Aguinis of the George Washington University School of Business: Diversity is good for business.
“Research shows that when you have more diverse opinions and you’re more inclusive with people, everyone feels they belong, you have lower turnover, improved performance, and improved satisfaction—when you do it right,” he said.
World Economic Forum research showed that companies with higher marks in diversity achieve better revenue from innovation. A McKinsey & Company study found that companies in the top 25 percent for both racial and gender diversity in their industries were more likely to have superior financial returns than the average company.
“I am in favor of including more diverse perspectives in the workforce because research shows that that’s good for decision making,” said Aguinis. “It’s good for firm performance.”
But Aguinis also understands the backlash. He said that quota systems, where people with specific characteristics are put into positions of visibility to improve the company’s image, do not advance the diversity of perspectives that would spark a financial advantage. They also create a perception that others are advancing without the requisite knowledge, skills, and abilities.
“The phrase ‘DEI hire,’ I think, gives us an indication of the things that upset these people,” he said.
Aguinis was one of 23 scholars who contributed to an editorial in an international scholarly journal objecting to Trump’s targeting of DEI programs. He wrote, “Rather than eliminating DEI efforts, organizations should focus on improving them by expanding inclusive hiring practices, establishing clear accountability measures, integrating DEI into workplace strategy and culture, and implementing a comprehensive evaluation system.… In short: Mend it, don’t end it.”
