As an HR Strategy consultant, I’ve been closely following the recent changes in Diversity, Equity, and Inclusion (DEI) regulations.
Our team is actively observing how federal entities have been rolling out updates and initiatives at larger corporations, from dismantling DEI initiatives altogether to rewriting their policies.
Corporations such as Walmart, Amazon, Target, Ford, Lowe’s, Boeing, Caterpillar, Harley-Davidson, Polaris, John Deere, Tractor Supply Company, Jack Daniel’s, Molson Coors, Disney, Google, GM, GE, Pepsi, Intel, PayPal, Chipotle, Comcast, 3M, Regeneron, and Philip Morris have all recently rolled back DEI in its current form.
They are either re-evaluating what Diversity, Equity, and Inclusion will mean for their business moving forward or discontinuing the initiative altogether at this time.
As a result, many other privately owned small businesses and leaders have been wondering what the new DEI regulations and recommendations might mean for them.
It’s a complex situation, and the rules are still evolving. I’m working closely with my clients to help them navigate these changes while still promoting inclusive workplaces in a manner that makes the most sense for their business mission and their plans for business growth.
Continue reading to learn more about key updates and insights our team has compiled that could have an effect on how small businesses approach DEI initiatives now and in the near future.
Federal Level Changes
President Trump recently signed two executive orders that aim to eliminate DEI programs in the federal government. These orders also encourage private companies to end what they call “illegal DEI discrimination and preferences.” This is a big shift from previous policies.
The new rules require federal agencies to:
- Stop all DEI and DEIA (Diversity, Equity, Inclusion, and Accessibility) programs
- Remove DEI offices and positions
- End performance requirements related to DEI for employees and contractors
State Level Actions
Many states are also making changes to DEI policies, especially in higher education. Here are some examples:
- Alabama: A new law bans DEI offices and programs in public colleges.
- Arizona: There’s a bill that would stop public colleges from requiring DEI training or having DEI offices.
- West Virginia: The governor banned DEI initiatives at public institutions.
- Minnesota’s stance on DEI presents a unique case in the current national debate over DEI policies:
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- University of Minnesota’s Reassessment: In light of federal rollbacks, the University of Minnesota is reassessing its DEI programs. While some initiatives are paused, such as hiring for leadership positions in DEI, the university remains committed to evaluating how these programs align with federal laws.
- Support for DEI Amid Rollbacks: Despite federal pressure, the University of Minnesota’s president reaffirmed support for existing DEI policies, signaling that no immediate changes are expected in their broader strategy. This reflects a cautious but determined stance to uphold inclusive practices.
- Impact on Nonprofits: Federal funding cuts could significantly affect Minnesota nonprofits that rely on government grants for DEI-related projects. For example, the Minnesota Black Farmers Association expressed concerns about losing resources essential for environmental and community-focused initiatives.
- City-Level Programs: Cities in Minnesota are not mandated to discontinue their DEI programs under the executive order. However, municipalities receiving federal grants are advised to review their policies to ensure compliance with potential funding restrictions.
What New DEI Regulations Mean for Private Companies
Executive orders also extend their influence on the private sector by promoting merit-based practices and discouraging DEI programs that violate federal anti-discrimination laws.
These changes are causing a lot of uncertainty for businesses. As an HR consultant, I’m advising my clients on a few key points to address and navigate these possible changes for their individual policies and goals:
- Audit Current DEI Policies: Review all current DEI programs and initiatives to ensure they are in compliance with new federal and state regulations.
- Monitor Legal Developments: Keep detailed records of hiring practices and training programs in the organization and stay updated on court rulings and state-level responses that may influence funding or program requirements.
- Lean on Professionals and Leverage Local Resources: Stay informed about ongoing legal challenges to these new policies and if or how they may affect current business practices. Working with your HR consultant team at Elevate Results Consulting and its HR attorney partners or consulting state-level guidance from entities like the Minnesota Council of Nonprofits can be invaluable resources during these transitions.
How will transparency and clarity in communication play a role in shifting company policies like DEI initiatives?
Anytime a company’s policy or benefits shift internally, transparency and clarity in communication are essential for keeping employees feeling confident and positive about their roles and responsibilities.
When company policies shift, especially in areas like Diversity, Equity, and Inclusion (DEI), creating and implementing a strategy for clear and open communication regarding these changes is essential.
Building Trust and Engagement
Transparent communication fosters trust among employees, stakeholders, and customers. When companies openly share the purpose, progress, and challenges of their DEI initiatives, it signals a genuine commitment to change.
Employees are more likely to engage with and adopt these policies when they feel included in the conversation and have a clear understanding of the organization’s intentions and expectations.
Organizations that communicate openly about DEI efforts are 11 times more likely to have employees perceive their policies as being genuine to the health of the workforce.
Reducing Resistance to Change
Clear communication helps reduce confusion and resistance when implementing new procedures or policies. Employees who understand the “why” behind changes are more likely to adopt them.
Providing context—such as explaining how DEI aligns with company values or addresses equity gaps—ensures that employees will see these initiatives as meaningful and having a positive impact on their working conditions rather than superficial.
Accountability and Progress Tracking
Transparency also enables accountability by setting measurable goals and openly reporting progress. This allows companies to identify areas for improvement while demonstrating their dedication to achieving results.
Sharing data publicly through annual DEI reports can reinforce accountability and build credibility with both internal and external stakeholders.
Encouraging Feedback and Inclusion
Effective communication creates opportunities for two-way dialogue, cooperation, and collaboration. By encouraging employee feedback through surveys or focus groups, companies can better understand the impact of DEI initiatives and make necessary adjustments.
Creating an environment with open discussions about company successes and challenges can also promote a culture of inclusion where employees feel valued not only for their tasked work but also for their input and ideas.
Navigating Controversial Topics
Transparent communication is particularly important when addressing potentially sensitive or controversial topics. Companies must proactively provide forums for discussion while maintaining clear boundaries to ensure constructive dialogue.
This approach helps address concerns early and prevents misunderstandings that could derail progress. In conclusion, transparency and clarity are not just tools for effective communication, they are foundational to the success of DEI initiatives.
By building trust, reducing resistance, ensuring accountability, encouraging feedback, and addressing challenges head-on, organizations can create meaningful change that aligns with both their values and business objectives.
Looking Ahead
While the future of Diversity, Equity, and Inclusion (DEI) initiatives is uncertain, it’s still important for companies to reevaluate policies and create a fair and welcoming environment for all employees to grow a successful and healthy business.
With that said, businesses might need to find new ways to achieve these goals to align with changing regulations. So, as your HR strategy partner, I’m here to help you understand these changes and adapt your policies as needed.