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New DDI Report Shows Companies Are Failing To Deliver on DEI Promises

Latest Analysis Shows Number of Companies with DEI Programs Dropping; More Than 40% of Senior Leaders Who Are Women and Minorities Plan to Quit to Advance.

PITTSBURGH, PA, April 19, 2023 – DDI, a global leadership consulting firm, today released its Diversity, Equity, and Inclusion Report 2023 that shows many companies are regressing in their DEI progress, which is having a direct negative impact on talent retention, the ability to meet customer needs and their overall business success.

The report, based on DEI-specific analysis of 2023 Global Leadership Forecast results, found an 18% decrease in leaders’ endorsement of their company’s overall DEI efforts in the last two years. In addition, the data showed that the number of companies that didn’t offer DEI programs increased from 15% in 2020 to 20%. As leaders lose trust in their companies’ inclusion efforts, leaders who are women or from minority ethnic and racial backgrounds are significantly more likely to plan to switch companies to advance, especially among senior leaders.

“With the stress of economic uncertainty and labor challenges, companies have turned their attention away from DEI toward these urgent issues, but that has left many leaders, especially those who are women and from minority racial and ethnic backgrounds, questioning their company and role,” said Stephanie Neal, Director of DDI’s Center for Analytics and Behavioral Research. “If companies don’t act now to rekindle and reinvest in their DEI programs, the loss of talent will have a profound impact on future business success.”

The report highlights additional findings on DEI efforts and business results:

  • Letting DEI slip impacts business performance. Organizations with greater leadership diversity are 2.4X more likely to outperform their competitors. Companies that rank in the top 10% among their peers in financial performance have at least 5% more leaders who are women and from minority racial/ethnic backgrounds than below-average performers, showing that even a modest increase can have significant results.
  • Generational divides influence DEI perception. While leaders under age 35 are the most optimistic about their organization’s commitment to DEI, their Gen X counterparts (age 46-55) are the most disappointed. This could be an indicator of experienced leaders’ frustration with slow progress, or a feeling of being overlooked as many programs target younger workers.
  • Inclusion doesn’t require an office. DDI’s data shows that 34% of workers who work remotely report a strong sense of inclusion in their organizations, compared to only 29% of their peers who work in person. Among women leaders, only 21% who work in-person report a strong sense of inclusion.
  • Preparing the next generation of diverse leaders remains a top concern. Burnout is soaring across all ages and demographics with over 75% of minority leaders and 72% of women leaders under age 35 feeling “used up” at the end of each day. The combination of childcare responsibilities coupled with pressure for younger leaders to portray perfection is likely driving this trend. To overcome this heightened risk of burnout, leaders should prioritize showing empathy, acknowledging their own vulnerability and shortcomings, and inquiring about employees’ wellbeing.

“A key question posed by these findings is how companies can create an inclusive remote work culture and embrace diversity in all aspects,” said DDI CEO Tacy Byham. “Gender, racial, and ethnic diversity in leadership is a clear business advantage, and you could be pushing away these highly talented leaders by taking away flexible work options. Options like remote work empower them to do their best work for the organization while meeting personal goals and family obligations.”

In addition to revealing these urgent trends, DDI’s DEI Report provides insight into what companies can do to reduce the risk of diverse talent loss and how quality DEI programs drive bottom-line performance. The full report also details the five crucial components of DEI success to help companies implement best practices that drive engagement, inclusion, retention and performance.

For more information, download the full 2023 Diversity, Equity, and Inclusion Report at https://www.ddiworld.com/glf/diversity-equity-inclusion-report-2023.

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