EQUITY, Diversity, and Inclusion (EDI) initiatives in 2023 have waned compared to previous years in the US, in a shift reflecting tightening economic conditions, as reported by consulting firm Paradigm.
The study indicates a notable decrease in American organisations allocating resources to EDI efforts, with the percentage of companies maintaining an EDI budget dropping from 58 per cent in 2022 to 54 per cent in 2023.
Simultaneously, organisations with a dedicated EDI strategy witnessed a nine-point decline during the same period.
“After two years of unprecedented investment sparked by 2020’s racial justice movement, this year, global momentum around EDI slowed,” according to the report from Paradigm.
“There are a number of headwinds contributing to this shift: the first is economic uncertainty that not only led to reduced spending across the board, it also firmly shifted the power balance back to employers.”
While EDI initiatives surged post-George Floyd’s death, prompting increased corporate investment, external factors such as economic constraints and heightened public and judicial scrutiny have contributed to the recent setback.
Companies are reallocating resources due to concerns surrounding potential Supreme Court actions against EDI practises, following decisions earlier in the year that deemed race-based admissions in colleges unconstitutional.
Despite reduced funding, Paradigm’s report highlights positive trends in EDI leadership and goals.
The number of companies with senior EDI leaders increased by six points, while those with goals related to women’s representation in leadership roles rose by eight points from 2022 to 2023.
Moreover, 20 per cent of companies in 2023 set goals for increased racial or ethnic diversity in their workforce, marking a four-point increase year-over-year.
This development coincides with a recent hiring slowdown in October, where businesses added only 150,000 jobs compared to 297,000 in September.
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