DEI downturn: Has the divisive discourse reached Aussie shores?

Disengagement from numerous organisations in the US from DEI strategies has been alarming for Aussies who are currently leading DEI efforts in APAC with the highest rate of progress. But is that why DEI faces stagnant future investment?

Australian organisations are leading the charge when it comes to implementing diversity, equity, and inclusion (DEI) practices in the Asia-Pacific region despite the challenges of slow funding, box-ticking and societal headwinds proving to be challenging obstacles.

TDC Global’s deep dive into DEI indicated that 47 per cent of Australian workplaces have made significant advancements in DEI, leading the region ahead of Singapore (27 per cent), Japan (26 per cent), and Hong Kong (19 per cent).

At the same time, the findings have also displayed a disconnect when it comes to internal sentiment and awareness within these companies. Despite 37 per cent of Australian workplaces frequently discussing DEI, a quarter of Australian employees are unaware of their company’s DEI status, highlighting a disconnect.

This discrepancy is exacerbated by the portrayal of DEI, in the sense that it is merely a box-ticking exercise, and not something that is being put into practice. With 45 per cent of strategies, policies, and conversations being driven by compliance requirements, it sets a negative connotation. This issue is particularly pronounced in Australia, where 40 per cent of firms opt for ad hoc DEI support, compared to 28 per cent committing to ongoing strategies.

The resulting impact is that DEI efforts are often surface-level with a short-term focus, leading to reduced effectiveness and return on investment. If this is the process a lot of organisations have in place, then future investment is clearly not a priority.

Sarah Liu, managing director of TDC Global, said organisations must see DEI not merely as a regulatory mandate to pay lip service to, but as vital for positive change within the workplace:

“Our findings reveal a perception gap where managers often view their DEI progress more favourably than their teams do. This discrepancy underscores the need for a reality check – over 60 per cent of employees are actively engaged in DEI discussions, demonstrating that these concerns are more than just buzzwords; they are integral to the fabric of our workforce.

“However, there remains a gap in understanding the impact that DEI strategies have on an organisation’s bottom line. By embedding DEI as a core strategic imperative and viewing it as a long-term investment, Australian companies have the opportunity to not only enhance workplace inclusivity and innovation but also to drive significant business growth,” Liu said.

DEI itself has been a major talking point, with contentious debates around the principle of DEI having been robust throughout the United States, alarming some experts of perhaps an imminent change in the Australian mindset towards DEI.

“I remain cautiously optimistic,” DEI expert Michelle Redfern said, “despite other Western countries like the USA experiencing a backlash against diversity, equity and inclusion initiatives more broadly”.

“I always say “follow the money” so the economic incentives associated with [DEI] will continue to play a crucial role, as research consistently shows that diverse and inclusive workplaces perform better financially.”

As the melting pot discourse around DEI reaches Aussie shores from the US, it will be interesting to see if it has any effect on the way organisations perceive its implementation in the workplace. At the same time, if organisations are going to stick to DEI practices, viewing it as a long-term investment instead of a box-ticking façade should be the priority.